July 2020 West Edition by Autobody News

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Hundreds of Individuals in the Industry Get Much-Appreciated Help from Foundation by John Yoswick

Bryan Kim’s collision and mechanical repair business, like many others, was struggling this spring as the COVID-19 virus and economic shutdown hit the Catonsville, MD, area. Sales at ASE Auto Center were down as much as 50% some months, not enough to cover rent and payroll. “We started bleeding money a little than some shops, that actually shut down for a week or two, but once we started, we bled a lot of money,” said Kim, who has owned the nine-employee business for seven years.

Adding to the challenge: Kim’s fiancé and his shop manager’s wife both contracted COVID-19, forcing Kim and his manager to each stay away from the shop for several weeks. “I didn’t want to bring it to the facility, and luckily no one who works here got sick,” he said. The situation was made a little bit easier, he said, because of some assistance from the Collision Industry Foundation, the nonprofit dedicated to providing emergency financial help or other assistance to members See Help from Foundation, Page 14

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AUTOBODYNEWS.COM Vol. 38 / Issue 7 / July 2020

How CIF Assistance Has Benefited Collision Repair Professionals in Time of Need by Stacey Phillips

When the coronavirus restrictions were first put into place, the Collision Industry Foundation (CIF) recognized the challenges being faced by the industry. As a result, the nonprofit organization set up a special COVID-19 fund to support collision repair professionals impacted by the pandemic. “Since 2001, CIF has been dedicated to raising, managing and donating funds to provide emergency relief to collision repairers who have

been impacted by natural disasters or other catastrophic events,” said Michael Quinn, CIF board president and SVP of business development at AirPro Diagnostics. “The donations we received for the COVID-19 fund were vital to help repairers across the country.” CIF established the fund with $100,000 raised previously, and CCC Information Services matched that amount. Other industry organizations and individuals then donated to the fund, including AirPro Diagnostics, Guy Bargnes, Colette See CIF Assistance, Page 16

Bay Area Hospitality and Automotive Executive Charged with Fraud

MSO Embraces Intense Training and Cleaning During Pandemic

Geoffrey M. Palermo was charged in a criminal complaint with wire fraud and making false statements in a loan application in connection with multiple schemes to defraud, spanning from 2013 to 2020, announced U.S. Attorney David L. Anderson, FBI Special Agent in Charge John F. Bennett and U.S. Small Business Administration (SBA) Office of the Inspector General (OIG) Western Region Special Agent in Charge Weston King. “What is particularly galling about the conduct alleged in the complaint is that while Geoffrey Palermo

continue without missing a beat. By aggressively pursuing training for At Mike’s Auto Body, their motto during many of it its managers, estimators, this pandemic is “It’s not a slow time… technicians and painters, the busiit’s go time!” ness has everyone working full-time While many “essential” business- at getting better, according to Mike’s es are currently closing their doors and Director of Marketing Dane Dearfurloughing or laying off employees, love. Mike’s Auto Body is using this time to Dearlove is playing an import“re-build, re-energize and refresh” in ant role in the training piece of the several areas to become a better com- plan, alongside Region Manager Jason Toner. pany overall. “We’ll be a better and stronger company across the board after this entire thing is in our rearview mirror,” Dearlove said. “Many of our employees are going to be able to focus totally on their OE training and other forms of education to truly enrich themselves during the Training at Mike’s Auto Body is being performed with face pandemic. So, we’ve decidmasks and proper spacing during the pandemic ed as a team to pursue things When the pandemic finally pass- with a focus on improving techniques, es—and if you know the precise date, and training is definitely one of the please let us know—this MSO with best ways to achieve that. If we want 17 locations in northern California’s the team to be a cohesive group, we See Training and Cleaning, Page 25 East Bay will be in a good position to

was wrongfully receiving PPP funds, he was not paying required payroll taxes for his employees, making it difficult or impossible for his employees to obtain the benefits to which they were rightfully entitled,” said Anderson. “PPP funds are intended to protect the many, not to enrich the few. The fraud alleged in the indictment reversed congressional intent by depriving employees and enriching Palermo.” “The FBI, along with our federal partners, will actively pursue this type of criminal behavior—especialSee Executive Charged, Page 22

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CONTENTS Bay Area Hospitality and Automotive Executive Charged with Fraud ��1 CA Body Shop Donates 500 Face Shields ��6 CA Body Shop Opening New Location ��20 Coronavirus Economy: Bay Area Vehicle Trips Plunge in April, Jump in May ��6 Hyundai Owners Allege Windshields Spontaneously Break in Class Action Complaint ��11 In November, Californians Will Decide If App-Based Drivers Should Be Classified as Independent Contractors ��20 Looters Raid FCA Dealership Driving Off With Hellcats, Burn AMG GT In Mercedes Showroom ��24 MSO Embraces Intense Training and Cleaning During Pandemic ��1 Northern Nevada Auto Dealers Look to Turn a Corner ��12 Tesla Supercharger Station Becomes ICE Parking Lot ��10 Tesla Withdraws Alameda County Lawsuit as Fremont, CA, Factory Returns to Normal Operations ��19

ATI Shares Five-Step Rapid Recovery Plan for Automotive and Collision Repair Shops for Beyond COVID ��44 Bipartisan PPP Flexibility Act Sails Through Senate ��54 Carma Project Rewarding Replacing Airbags ��40 CIC Goes Virtual for July Conference ��54 Dealers See ‘Booming’ Business as

GM Designates $10M for Inclusion, Racial Justice ��49 GM Has a New Plan to Overtake Tesla, and It Starts With an Electric Van ��40 Honda Suffering Production Issues Due to Possible Cyber Attack ��52 How CIF Assistance Has Benefited Collision Repair Professionals in Time of Need ��1 Hundreds of Individuals in the Industry Get Much-Appreciated Help from Foundation ��1 NY Body Shop Owner and Landlord Forgives Rent for 200 Tenants ��48 Postponed NORTHEAST 2020 Now Canceled ��10 Riots in Wake of Floyd’s Death Could Become Most Costly Civil Disorder for Insurers ��43 Self-Driving Vehicles Could Struggle to

COLUMNISTS

SEMA Show Attendee Registration Open ��3

Anderson - Determining Whether—and

Silicon Valley Tech School Pushes

Day Job/Night Job: Collision Writer Launches Fun Art Project in Quarantine, Now Hundreds of People Want His Pet Drawings ��32 Yoswick - Shops Share More Ideas on How to Get Work In the Door ��37

Through Pandemic ��38 Tesla Is Now Worth More Than GM, Ford, FCA Combined ��4 Tesla Shares Cross $1,000 as Semi Truck, New Battery Tech Take Focus ��55 The Auto Industry’s Response to Black Lives Matter Protests ��26

NATIONAL All Girls’ Bogi Lateiner Discusses Post Corona Customer Care and Communications ��34

to recovery, positioning the SEMA Show to be vital in helping businesses move toward a successful 2021. Show organizers are actively working with leading experts to develop standards and protocols that will create an optimal environment to conduct business while emphasizing the health and well-being of those at the event. Education, new products and trend spotting are the typical draws at the event, and this year will continue based on the support the industry has shown thus far. Source: SEMA

Automakers Crank Up Production ��50

Eliminate Most Crashes ��4

How—to Charge for OEM Research ��30

ing featuring automotive innovation is set to take place in the fall, at a time when analysts anticipate the marketplace will begin its path

Volkswagen Activates ‘Sign Anywhere’ Across Network ��55 Women in Auto Care Accepting Entries ��40

INDEX OF ADVERTISERS

REGIONAL

SEMA Show Attendee Registration Open

Registration for the 2020 SEMA Show, Nov. 3–6 at the Las Vegas Convention Center in Las Vegas, is available at www.SEMAShow. com/register. The annual gather-

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 (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.

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Autobody News P.O. Box 1516 Carlsbad, CA 92018 (800) 699-8251 (760) 603-3229 Fax www.autobodynews.com editor@autobodynews.com

Certified Collision Group (CCG) �� 17

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Classifieds �� 54

Michael Hohl Motor Company �� 6

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Haldon Company �� 39

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Kearny Mesa Subaru-Hyundai �� 24 autobodynews.com / JULY 2020 AUTOBODY NEWS 3

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Self-Driving Vehicles Could Struggle to Eliminate Most Crashes Driver mistakes play a role in virtually all crashes. That’s why automation has been held up as a potential game changer for safety. But autonomous vehicles might prevent only around a third of all crashes if automated systems drive too much like people, according to a new study from the Insurance Institute for Highway Safety. “It’s likely that fully self-driving cars will eventually identify hazards better than people, but we found that this alone would not prevent the bulk of crashes,” said Jessica Cicchino, IIHS vice president for research and a coauthor of the study. Conventional thinking has it that self-driving vehicles could one day make crashes a thing of the past. The reality is not that simple. According to a national survey of police-reported crashes, driver error is the final failure in the chain of events leading to more than nine out of 10 crashes. But the Institute’s analysis suggests only about a third of those crashes were the result of mistakes that automated vehicles would be expected to avoid simply because they have more accurate perception than human drivers and aren’t vulnerable to incapacitation. To avoid the other two-thirds, they would need to be specifically programmed to prioritize safety over speed and convenience. “Building self-driving cars that drive as well as people do is a big challenge in itself,” said IIHS Research Scientist Alexandra Mueller, lead author of the study. “But they’d actually need to be better than that to deliver on the promises we’ve all heard.”

for the road conditions, driving aggressively or leaving too little following distance from the vehicle ahead. • “Execution and performance” errors included inadequate or incorrect evasive maneuvers, overcompensation and other mistakes in controlling the vehicle. • “Incapacitation” involved impairment due to alcohol or drug use, medical problems or falling asleep at the wheel. The researchers also determined some crashes were unavoidable, such as those caused by a vehicle failure like a blowout or broken axle. For the study, the researchers imagined a future in which all the vehicles on the road are self-driving. They assumed these future vehicles would prevent those crashes Will autonomous vehicles be better than humans at caused exclusively by perpredicting, planning and execution? ception errors or involved an towed away, and emergency medical incapacitated driver. That’s because cameras and sensors of fully autonservices were called to the scene. The IIHS team reviewed the omous vehicles could be expected case files and separated the driver-re- to monitor the roadway and identify lated factors that contributed to the potential hazards better than a human driver and be incapable of distraction crashes into five categories: • “Sensing and perceiving” er- or incapacitation. rors included things like driver dis- Crashes due to only sensing traction, impeded visibility and fail- and perceiving errors accounted for ing to recognize hazards before it was 24% of the total, and incapacitation too late. accounted for 10%. Those crashes • “Predicting” errors occurred might be avoided if all vehicles on when drivers misjudged a gap in traf- the road were self-driving―though fic, incorrectly estimated how fast it would require sensors that worked another vehicle was going or made perfectly and systems that never an incorrect assumption about what malfunctioned. The remaining twoanother road user was going to do. thirds might still occur unless auton • “Planning and deciding” errors omous vehicles are also specifically included driving too fast or too slow programmed to avoid other types of To estimate how many crashes might continue to occur if self-driving cars are designed to make the same decisions about risk humans do, IIHS researchers examined more than 5,000 police-reported crashes from the National Motor Vehicle Crash Causation Survey. Collected by the National Highway Traffic Safety Administration, this sample is representative of crashes across the U.S. in which at least one vehicle was

predicting, decision-making and performance errors. Consider the crash of an Uber test vehicle that killed a pedestrian in Tempe, AZ, in March 2018. Its automated driving system initially struggled to correctly identify 49-year-old Elaine Herzberg on the side of the road. But once it did, it still was not able to predict she would cross in front of the vehicle, and it failed to execute the correct evasive maneuver to avoid striking her when she did so. Planning and deciding errors, such as speeding and illegal maneuvers, were contributing factors in about 40% of crashes in the study sample. The fact deliberate decisions made by drivers can lead to crashes indicates that rider preferences might sometimes conflict with the safety priorities of autonomous vehicles. For self-driving vehicles to live up to their promise of eliminating most crashes, they will have to be designed to focus on safety rather than rider preference when those two are at odds. Self-driving vehicles will need not only to obey traffic laws, but also adapt to road conditions and implement driving strategies that account for uncertainty about what other road users will do, such as driving more slowly than a human driver would in areas with high pedestrian traffic or in low-visibility conditions. “Our analysis shows that it will be crucial for designers to prioritize safety over rider preferences if autonomous vehicles are to live up to their promise to be safer than human drivers,” Mueller says. We thank IIHS for reprint permission.

Tesla Is Now Worth More Than GM, Ford, FCA Combined by Brad Bergan, Interesting Engineering

Toyota is no longer the most valuable automaker in the world. Tesla has ascended to the top position, worth more than Ford, GM, and FCA combined, according to a handy fan-made spreadsheet. With a market capitalization valued at roughly $185 billion, Tesla is now worth more than Volkswagen Group, Daimler, Toyota, Honda and Daimler. The fan-made spreadsheet was made using Yahoo and Google data

to track automaker valuation, and it showed Tesla surging to first place on June 10. As of writing, Tesla’s stock is sitting at roughly $1,014 per share, after a rise of roughly $72 from June 9. This places more valuation distance between Tesla and other U.S. rivals Ford, GM, and FCA. As of June 10, GM’s worth was roughly $41 billion, with Ford at $27 billion and FCA sitting at roughly $20 billion. For a long time, Tesla’s market valuation was more than all three, but then the stock continued its upward motion until the all-electric au-

tomaker cemented a major milestone, according to CNET. The all-electric automaker has seen consistent market value growth, which gave CEO Elon Musk a payday of roughly $700 million earlier in 2020. Musk doesn’t take a salary as CEO of the company, but he still earns stock options at a low price to sell at market rate whenever he chooses. However, there’s little data available to explain the recent jump in valuation, but Wedbush Securities lifted its target share price to $1,000 on June 10. The investment

firm pointed to “game-changing” developments as a reason behind the lift in target price. Skeptics of Tesla’s valuation have surrounded the all-electric automaker for years. In January, Bank of America analysts forecasted a 12-month average stock price of only $350 for Tesla. While the company’s stock value did fall near to that level in March, it has since made an impressive comeback. We thank Interesting Engineering for reprint permission.

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Coronavirus Economy: Bay Area Vehicle Trips Plunge in April, Jump in May by George Avalos, The Mercury News

Government-imposed business shutdowns to stem the spread of coronavirus helped erase nearly 597,000 jobs in the Bay Area during March and April―yet they also helped wipe out vehicle trips and traffic jams in a

A vacant Interstate 280 in Cupertino, CA, in March� Government-imposed business shutdowns helped to erase nearly 597,000 jobs in the Bay Area during March and April—yet they also helped to wipe out vehicle trips and traffic jams in a big way, according to a new economic report released June 2

big way, according to a new economic report released June 2. The economic fallout ushered in by state and local government mandates that shuttered untold num-

bers of businesses has been catastrophic: An estimated 555,100 jobs were lost in the Bay Area in April, on the heels of a loss of 41,800 jobs in March, the state’s Employment Development Department has reported. Yet with a fast-rising number of people working from home―or out of work―people have been driving much less during a spring dominated by the personal and economic impact of the coronavirus, according to a report released June 2 by the Institute for Regional Studies and Joint Venture Silicon Valley. The report touts what it describes as a “silver lining” arising from the business shutdowns in Silicon Valley, the Bay Area and California. “We certainly don’t intend to minimize the tragedy of the pandemic,” said Rachel Massaro, director of research for the Institute of Regional Studies. During May, freeway vehicle miles traveled per capita, a way of measuring how far each person is driving, on average, were down dramatically in Silicon Valley, the Bay

CA Body Shop Donates 500 Face Shields A well known auto body shop in Eureka, CA, is shifting from car repairs to making face shields. Quality Body Works made more than 500 handcrafted face shields for the community, all of which have gone to Mad River Community Hospital, Alder Bay Assisted Living, local law enforcement and Cal-Ore-Life Flight. General Manager Ross Creech said the decision to help was easy. With staff having prior

Area and California, compared with the trends from a year ago as well as the early part of 2020 before the Bay Area issued the nation’s first shelterin-place orders.

freeway vehicle miles traveled averaged 179.7 per person, up 22.2% from April but down 44.4% from the same month a year ago. Bay Area freeway travel av-

“Will the health crisis catalyze new approaches to transportation and a renewed emphasis on telecommuting?” — Russell Hancock However, the May travel totals on freeways in Silicon Valley, the Bay Area and California were up significantly from April, a potential indicator of a rebounding job market, according to the institute. The report also found that travelers in Silicon Valley reduced their average freeway travel to a dramatically greater extent than their counterparts in the Bay Area and California compared to a year before. However, Silicon Valley drivers also returned to their vehicles at a much faster pace in May compared with April than was the case in California and the Bay Area, according to the new study. During May, Silicon Valley

eraged 239.1 miles per capita in May, up 16.5% from April but down 32.4% from May 2019. And California freeway travel averaged 229.6 miles per person in May, up 16.5% from April and down 28.1% from May of a year ago, the report determined. “Will the health crisis catalyze new approaches to transportation and a renewed emphasis on telecommuting? We hope this study will inform the thinking on important questions such as these,” said Russell Hancock, president of Joint Venture Silicon Valley. We thank The Mercury News for reprint permission.

Michael

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775-884-8645 Fax M-F 7am-6pm Sat 8am-5pm experience with machinery, the labor does not take long at at all. It can be done within minutes. The body shop wants to continue making face shields as long as they can until the time comes when they may need donations to make the face shields. We thank KIEM News for reprint permission.

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Tesla Supercharger Station Becomes ICE Parking Lot by Joey Klender, Teslarati

A Tesla Supercharger station in Las Vegas, NV, just off of the Strip, became a parking lot for petrol-powered cars. The 35-stall Supercharger station located at the High Roller, a 550-foot-tall Ferris wheel popular

Credit: Tesla�com

among Vegas tourists, is the site of Tesla’s high-powered V3 Superchargers. Amid continued lockdowns in much of the nation and a significant drop in the number of drivers on the roads and drop in worldwide Supercharger usage, local drivers of gas-powered vehicles have found Tesla’s Supercharger station to be their ideal private parking space. Reddit user u/Sam1Ron shared

the photograph of the numerous vehicles occupying Supercharging spaces. U/Sam1Ron stated the Vegas Supercharger area had turned into a “blizzard,” referring to ICEing, the acronym used to describe the act of gas-powered parking cars at electric vehicle chargers. Some within the Reddit thread speculated the owners parked their vehicles in the location due to the excessive shade the solar awning provides. This shade keeps the interior of each car cool. Currently, temperatures in Las Vegas will reach a high of at least 101 degrees Fahrenheit for the remainder of the week, according to Weather.com. While the positioning is understandable due to the shade, each non-electric vehicle parked in a charging spot violates Nevada state law, which states, “A person shall not park a vehicle in a space designated for charging electric or hybrid electric vehicles by a sign or markings that meet the requirements of subsection 2, whether on

public or privately owned property if the vehicle is not connected to the charging station for the purpose of charging.” The first violation carries a fine of $100, the second offense carries a $200 penalty and any subsequent actions will result in a ticket between $400 and $750. Unfortunately, ICEing is a common tactic used against EV owners by their gas-powered counterparts. In the past, large groups have used a “park-in” to block Tesla Superchargers from being used in protest of electric vehicles. With the growing presence of battery-electric cars on the road, parking in these spaces in demonstration of the EV movement becomes bothersome for many owners. We thank Teslarati for reprint permission.

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Postponed NORTHEAST 2020 Now Canceled The Alliance of Automotive Service Providers of New Jersey (AASP/NJ) made the difficult decision to cancel its 2020 NORTHEAST Automotive Services Show at the Meadowlands Exposition Center in Secaucus, NJ. NORTHEAST 2020, originally scheduled for March 20-22, then postponed to Aug. 21-23, will resume its normal schedule next year, with show dates of March 19-21, 2021. An online NORTHEAST event for the weekend of Aug. 21-23 will allow attendees to enter a virtual floor plan and access exhibitors’ products, videos and information, and even schedule a private meeting. Educational opportunities will also be available. For more information on NORTHEAST, visit www.aasp njnortheast.com. Source: AASP/NJ

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Hyundai Owners Allege Windshields Spontaneously Break in Class Action Complaint by Emmariah Holcomb, glassBYTEs.com

Lorenzo Ford and Tina Forehand, collectively the plaintiffs, recently filed a class action complaint against Hyundai Motor America (HMA) and Hyundai Motor Company (HMC), collectively Hyundai or defendants, in Central California. The plaintiffs allege Hyundai manufactured, marketed, distributed and sold its 2020 Palisade without disclosing to purchasers and lessees of its issue with windshields cracking, chipping and otherwise spontaneously breaking. The plaintiffs are seeking a trial by jury along with financial compensation. According to the class action complaint, the windshield issues cause dangers to safety and Hyundai refuses to admit the glass is defective. The automaker also allegedly refuses to offer a proper fix for the cracked windshields other than forcing Palisade owners to pay for replacement windshields that are also defective, according to the class action complaint. The complaint claims Hyundai is

responsible for the following: Breach of express warranty; Breach of implied warranty of merchantability;

“A typical account of the defect starts with a small chip in the windshield glass, sometimes in response to contact with a small object such as a pebble or bug but often with no impact. The chip quickly expands

Violations of the Magnuson-Moss Warranty Act; Common law fraud; Unjust enrichment; Violations of the Illinois Consumer Fraud and Deceptive Business Practice Act; and Violations of the Washington Consumer Protection Act. According to the plaintiffs, Hyundai marketed the 2020 Palisade as its “flagship premium” sports utility vehicle offering consumers “exceptional comfort, technology and safety.” The company also began marketing in the summer of 2019, and within months owners and lessees began reporting problems with the windshields in their vehicles.

into a major crack or ‘spiderweb’ of cracks. Alternatively, cracks can appear suddenly and without warning in the windshield glass. Owners and lessees often experienced the defect shortly after purchase―even on the first drive home from the dealership,” a portion of the complaint reads. According to the complaint, Ford purchased a 2020 Hyundai Palisade and within 4,225 miles the windshield cracked from being hit by a pebble on the right upper corner of the glass. Ford claims the crack

extended to the center of the windshield, and he paid more than $880 to have the windshield replaced. Meanwhile, Forehand purchased a 2020 Hyundai Palisade, but at 2,000 miles the windshield cracked when a pebble, according to the complaint, hit it. Forehand said she had to wait about three weeks for a replacement windshield that cost her $250. The plaintiffs allege Hyundai was aware of the alleged defect but continued to market and sell the SUV without notifying its customers. “Dozens of owners and lessees have voiced their complaints about the defect on the official complaint database of the National Highway Transportation Safety Authority (NHTSA), as well as various online forums,” a portion of the class action complaint reads. As of press time Hyundai has not respond with a comment on the class action complaint. Look to a future edition of glassBYTEs for more information on this suit. We thank glassBYTEs.com for reprint permission.

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After COVID Crisis Drives Car Sales Off a Cliff in April, Northern Nevada Auto Dealers Look to Turn a Corner by Kaleb Roedel, Northern Nevada Business Weekly

Ryan Dolan, CEO of Dolan Auto Group, says the month like it’s cursed. “April,” laments Dolan, sighing heavily, “is the worst month we’ve had on my watch. It literally cut our business―it cut everything—in half.” Pausing, he gives a more accurate snapshot: “Actually, I would say it cut our business by 60 to 75% across the board.” Dolan Auto Group, a family-owned company with five car dealerships in Reno and one in neighboring Fernley, is not alone. Nationwide, the coronavirus pandemic drove car sales off a cliff starting in March, and they continued to free-fall in April. The auto industry ran into major roadblocks as the COVID crisis unfolded. State-issued stay-at-home orders kept possible buyers out of showrooms and closed numerous sales departments across the U.S. What’s more, widespread unemployment spikes stopped countless would-be buyers in their tracks due to the looming uncertainty. Consequently, U.S. auto sales hit a 30-year low in April, according to auto research firm Edmunds. In all, the industry sold an estimated 633,000 new vehicles, a 53% drop compared to 2019, Edmunds says. “We’re definitely hit by it,” said Jeff Campagni, general manager of Carson City Toyota, which saw a 15% sales drop in Q1 and a 20% dip in April. “Although we were hit by it, we were grateful it wasn’t horrible. “Now, we’re just trying to get back on track.” With Gov. Steve Sisolak’s phased business plan slowly allowing car dealers to reopen showrooms and reignite test drives, Northern Nevada companies that spoke with the NNBW are hoping to put their Q1 and April figures in their rearview. Helping matters, dealers are promoting big incentives for customers, including 0% loans for as long as seven years and deferred payments for as long as 120 days. And customers are paying attention. In April, no-interest loans account-

ed for a whopping 26% of new car sales, according to Edmunds. Not to mention, after being shut down for nearly two months, automakers have gradually restarted production to bolster the supply chain. In April, carmakers produced just 4,840 vehicles in North America, down from 1.4 million a year prior, according to Automotive News. “Things are picking up,” Campagni said. “I see people coming out and taking advantage of the 0% loans and deferred payments and jumping on those new cars right now. People still want to buy vehicles; people are still buying vehicles.” Dolan agreed. However, he’s keeping in mind the state’s safety guideline that showroom areas must not exceed 50% capacity. “I’m not trying to rush everybody down here, but it’s a really good time to buy a car on the economic side of things,” Dolan said. “I think there’s a little bit of a bounce and some pent-up urgency to come out and buy and get back to some normalcy in life. I hope that maintains and sustains throughout the summer.” Though dealers are seeing less activity on their lots, many are seeing an uptick in online sales and digital financing, as well as touchless curbside pickups and deliveries, according to Campagni. And he sees the sharp turn to online sales as an opportunity not only for car dealers, but also the customers. “People want that,” said Campagni, pointing out about 85% of Carson City Toyota’s sales since the pandemic took hold have been through online sales. “Before, we only sold a few online each month, and now you’re seeing it pick up because people are trusting it. I think it’s going to be a whole new way of doing business, and I actually think it’s going to be here to stay.” Tom Rackley, president of Rackley Auto Group in Reno and Rackley Chrysler Dodge Jeep Ram in Winnemucca, feels the industry’s push toward doing business digitally was long overdue. “Why people hate going into the showroom,” Rackley explained,

“is because you have a salesman, then you have a manager, then you have another manager and then you need the guy that does the paperwork at the end. “It’s like going to the dentist; you just don’t want to do it.” This, Rackley said, is why establishing a more streamlined sales process will be embraced by car-buyers in Northern Nevada and beyond. So much so, Rackley, like Campagni, feels the customer-friendly pivot to online sales will be permanent. “Even when we have a vaccine—post-pandemic―customers are going to expect dealers to operate a certain way,” he added. “And the industry needs to adapt to that.” Rackley, however, noted that since his Reno dealership reopened in early May after shutting down completely in mid-March, they’ve seen an uptick in customers struggle to get financing. During their first week and a half back open, Rackley said roughly 30% of would-be buy-

ers could not obtain a loan because they were unemployed. “We can’t just make a bank buy an auto deal,” he said. “The banks are tightening up because you’ve got so many people unemployed. Banks are asking for fresh paystubs because they want to make sure they’re employed. “An auto dealer can offer every incentive on the planet to help buy a vehicle but it doesn’t do any good if they can’t afford it.” Nevertheless, the auto industry is slowly trending upward. In fact, the week ending May 10 was the sixth consecutive week of improving vehicle sales at dealerships, according to J.D. Power, a marketing data and analytics company. Sales expectations for the year, though, have been drastically lowered due to COVID-19. J.D. Power projects U.S. auto sales this year of about 12.6 million to 14.5 million vehicles, down from an estimated 16.8 million prior to the pandemSee Turn a Corner, Page 24

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just a couple months later I’d be putting some of my employees in contact with the foundation to help them out,” Garcia said. of the industry in need. The timing of the pandemic and “I really appreciated that help,” economic shutdown was particularKim said. “It wasn’t a crazy amount ly tough for Garcia’s business. In of money, but it was more the idea January, he purchased three new of this being an industry that helps CMC spray booths to install, along each other. It’s great being a part of with an area dedicated to ADAS an industry that does that.” calibrations, in a 6,000-square foot addition under construction at the shop. Then, like many shops, he saw about a 70% drop in his $1-million-a-month business in late March and early April. Some employee layoffs were a painful reality, Garcia said. An evening reception and silent auction in January in Palm One employee he had to Springs, CA, helped the Collision Industry Foundation raise lay off had just been hired some of the funds now in its COVID-19 Fund less than a month previous Carl Garcia, the owner of Carl’s ly. Another had some recent health Collision Center in Fall River, MA, issues. Some faced challenges in said he was among the shop owners getting unemployment claims going and industry vendors at an evening because the state system was overreception and silent auction in Palm whelmed. So Garcia is thankful he Springs, CA, that serves as an annual could point them to the foundation, fundraiser for the foundation. which provided some financial as “I never would have thought that sistance to about a half-dozen of his Continued from Cover

Help from Foundation

laid-off employees. cians laid off because of the pan “It was great to be able to offer demic. this option to employees who truly “This money helped put food on needed it,” Garcia said. “It was actu- their table, helped pay rent or mortally amazing how quickly [the Foun- gages or utility bills, the basic necesdation was] able to process it and get sities that are needed when you are them some money. It went to people who really needed it.” Garcia said he remembers the foundation over the years raising funds to help individuals in the industry facing challenges because of Hurricane Katrina, the 2018 wildfires in California and major flooding in 2016 in Missouri and West Virginia. “To have my own staff Petra Schroeder, who serves on the board of trustees of be the recipient of that same the Collision Industry Foundation, speaks with California shop owner David Mello at the foundation’s fundraising type of support, I don’t think event in January I’ll ever forget,” Garcia said. “Once we are back on our feet, I look impacted financially after suddenly forward to making contributions so being laid off,” Horvat said. “To have others get the help that they were able an organization that steps up and to give my people.” helps our collision repair profes Tammy Horvat, manager of sionals during times of hardship and Fred Martin Collision Center in Bar- crisis is another reason I admire our berton, OH, had similar praise for the collision community.” foundation, which provided assis- Maryland shop owner Kim See Help from Foundation, Page 22 tance to four of the shop’s techni-

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CIF Assistance

country to find out how CIF support has helped their employees.

Dalton Collision Nearly 30 years ago, Jerry Dalton opened Dalton Collision, a 13,000-square foot body shop in Blaine, TN. Since then, he and his team of 39 employees have focused on providing excellent service, and safety and peace of mind for customers. As the business expanded over the years, Dalton opened a second location in Knoxville last year. The facility is approximately 24,000 square feet and serves the north, central and eastern parts of Knoxville, as well as the surrounding counties. They first learned about CIF last year during the SEMA Show in Las Vegas, when Dalton watched CIF Board President Michael Quinn give a presentation about the organization. Dalton was impressed with the way CIF helped body shop employees at the time in California when they were dealThe team at Dalton Collision prior to the pandemic ing with wildfires. industry for allowing CIF volunteers to When his business began to deliver aid to collision repair profes- slow down, Dalton reached out to sionals and their families in need.” CIF for assistance. The human re CIF has received more than 630 sources director at Dalton Collision individual applications since March, applied for support on behalf of the the majority of which met the orga- employees at both locations. nization’s established criteria and When they received the checks were funded. from CIF, Dalton said it reminded him Although the application period of winning the Publisher’s Clearing ended May 31 and the COVID-19 House sweepstakes. fund is now exhausted, CIF is still “It was awesome,” said Dalton. trying to assist collision repairers “It sure helped out our employees. and encouraging general donations They were really appreciative.” from the industry. He is very grateful for the sup “I was inspired to join the CIF port from CIF and encourages other Board of Trustees in early 2019 collision repair facilities to reach out when I realized just how unique the when disaster strikes. organization is,” said Ann Gonza- Recently, Dalton said many of lez, CIF board vice president and VP the restrictions have been lifted in of strategic development for I-CAR. Tennessee and business is beginning “The support that CIF receives from to ramp up. across the collision repair industry “There are more cars on road, that allows us to then provide assis- which means more car wrecks,” said tance back to collision repair indi- Dalton. “We’re starting to see busividuals in need is exceptional, and ness getting back to where it was. It’s something I have never seen in other still not where it was but it is getting industries. I am proud to be part of a little better each week.” this generous community that, time As business returns to normal, and time again, steps up in times of Dalton’s goal is to increase sales to need to help our own.” $1 million a month. He attributes his Autobody News talked to three success to repairing vehicles correctbody shop owners from across the ly the way the manufacturer intended Bruce, Chris Caris, Benjamin Cupelli, Dave’s Collision Center/Halethorpe, Kelli Dewberry, Jeff Hendler, Kurt Lammon, Timothy Morgan, Partstrader, Clark Plucinski, Petra Schroeder, Sean Carey Consultants, Spanesi Americas, Tanya Sweetland, Tractable and John Yoswick. Funds were also contributed from monthly donors Meredith Bradshaw and Bill Enross. “We are once again grateful to belong to an industry that believes in supporting their own,” said Quinn. “We thank our generous donors and the

them to be and providing good quality customer service for the local community. Fix Auto Portland East & Fix Auto Gladstone Since the stay-at-home orders were first put into effect, Camille Eber said many heart-wrenching decisions have

and Doris, purchased the business in 1963, and Eber took over operations in 1989. Three years after joining Fix Auto Network in 2009, Eber’s nephew, William Bray, became a partner. They acquired their Gladstone location in 2013 and currently focus on repairing late-model vehicles.

“Since 2001, CIF has been dedicated to raising, managing and donating funds to provide emergency relief to collision repairers who have been impacted by natural disasters or other catastrophic events,” — Michael Quinn been made to save her two collision repair locations in Oregon, Fix Auto Portland East and Fix Auto Gladstone. This includes laying off some of the 23 employees to reduce overhead. “I’ve never been an extreme penny-pincher, and now we are analyzing nearly every dollar going out the door,” said Eber, co-owner of both locations. The southeast Portland shop, originally called Roth & Miller, was founded by Chet Roth and C.E. Miller in 1946. Eber’s parents, Jim

Eber learned about CIF’s COVID assistance from CRASH Network, a weekly online news digest, and forwarded the information to the employees who had been laid off. Although she and Bray provided them benefits for a period of time, they were looking for additional assistance. “We wanted to show our employees that there was more support that they may be able to receive if they acted on behalf of themselves and did so quickly,” said Eber. “We also wanted to show that our industry is a giving one.”

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‘Collisionista’ Petra Schroeder contacted Eber on a Saturday to verify the employees who had been laid off. “I am very thankful to her for doing the work for these people in need, and appreciate the tremendous support she continues to give to our industry,” said Eber. Seven of Eber’s staff received financial assistance from the organization. “What CIF did was above anything I would have imagined,” said Eber. “All business owners know the challenges of managing our businesses, so managing a non-profit like CIF by volunteers generous with their time, and supported by donors generous with their money, is nothing short of remarkable.” Eber is greatly appreciative of CIF’s assistance and encourages the industry to support its ongoing efforts. “Organizations such as CIF can be a safety net to a few or many— any filled need is better than none,” she said. “I want to send an enormous thank you to each person who has touched CIF over the years, including those responsible for the original idea, those giving of themselves to operate it, and the many

folks who have sent funds in the past and during these tremendously gut-tighteningly hard times.” Fuller Auto Body In Auburn, MA, Joshua Fuller grew up helping at his family business, Fuller Automotive. Established in 1914, the brand consists of five related companies and has a total of 60 employees, 42 of whom are in collision repair. Since becoming co-owner in 2003, the fourth-generation body shop owner has been passionate about growing the company and increasing industry awareness. As an active volunteer, Fuller has been part of the AASP-MA board directors and chaired the I-CAR volunteer committee for Massachusetts since 2014, and also participates in Collision Repair Education Foundation (CREF) fundraising events. Since the beginning of the COVID-19 situation, Fuller has looked for ways to maintain the safety of employees and customers. “I got into protective mode,” said Fuller. “As an owner, every day you walk in the front door and that is No. 1 on your mind: how do I make sure our

people are safe and protected and can perform the necessary services that our customers are in demand of?” The goal was to maintain some sense of normalcy while providing the ideal situation for employees. Ultimately, they had to scale down operations and furlough 11 people. As

At Fuller Automotive, a large tent in the parking lot provides customers a makeshift waiting room

a result, they instituted a work shift program where employees were provided 20 hours of work and could file for unemployment for an additional 20 hours. Fuller encouraged employees to apply for CIF assistance, and all 17 of those who filled out the application received funds. “They were ecstatic,” said Fuller. “CIF made it very easy to apply.

When they started to receive funds, they thought it was phenomenal.” He said everybody is feeling some type of pain right now and he is grateful CIF could provide support. “I was impressed by how they were able to come in and help so many of our stakeholders beyond what we could do. Every little bit helps,” said Fuller. “We were very fortunate to take advantage of it and so are our people. It’s definitely a welcome contribution.” Since the coronavirus restrictions, Fuller has recognized his employees’ dedication. They have kept busy, cleaning and painting the facility as well as making additional improvements. They also established a reopening committee to plan how to best operate when the business begins to ramp up. Currently, they set up large tents in the parking lot to provide customers a makeshift waiting room. “At the end of the day, we really want to make it welcoming for people,” said Fuller. Fuller said initiatives like these help them focus on moving forward and staying positive. “We want to keep our identity as a brand and provide superior service

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as we’ve always done,” said Fuller. “We’re just trying to weather the storm and know that brighter things are on the other side.” For more information about CIF, visit: http://www.collisionindustryfoundation.org, Facebook https://www.facebook.com/CollisionIndustryFoundation/ or LinkedIn. https://www. linkedin.com/organization-guest/ company/collision-industry-foundation-inc?challengeId=AQFdirMkIKv2vwAAAXKWK8w8XsC9LJ38V4xkntk27UXZlWI8 w c y 8 i 5 T T 0 x N g y Yp G o K W q IsIthEplNdmgWbiYn0dGh2aLtaQBKQ&submissionId=380cc0c5 -edb3-1616-e3da-12703bd1872b To apply for assistance: https:// www.collisionindustryfoundation.org/ disaster-assistance-request-form. html To donate: https://www.collision industryfoundation.org/donate.html

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Tesla Withdraws Alameda County Lawsuit as Fremont, CA, Factory Returns to Normal Operations by Simon Alvarez, Teslarati

With its Fremont, CA, factory operating once more, American electric car maker Tesla has decided to formally withdraw its lawsuit against Alameda County, which it filed earlier this month over officials’ refusal to allow the electric car production facility to reopen. The lawsuit’s withdrawal appears to mark the end of Tesla and Alameda’s feud, which ended up involving numerous states and national officials. As noted in a Reuters report, the dismissal of Tesla’s lawsuits was granted May 20. Filed May 9, the suit sought injunctive and declaratory relief against Alameda County, due to officials’ decision to keep the Fremont factory closed, despite nearby counties allowing Tesla’s facilities to resume operations. The suit followed a set of tweets by CEO Elon Musk, claiming Tesla would be moving its headquarters and future projects to other states, such as Nevada and Texas. The same weekend as Musk’s tweetstorm, Tesla published a blog post sharing its extensive “Return

to Work Playbook,” which discusses a series of strategies based on the company’s anti-coronavirus initiatives in Gigafactory Shanghai. Tesla’s Shanghai plant was part of a government-mandated shutdown due to the virus, but it was able to gradually reopen and return to normal operations by following a series of stringent safety guidelines. These guidelines were adapted for the Fremont factory, but according to the electric car maker in its blog post, the proposed safety features have not been acknowledged by Alameda County. Officials, on the other hand, noted they were against the reopening of the Fremont factory because Tesla failed to meet certain safety guidelines, though they did not specify which. Musk eventually opted to resume operations at the electric vehicle production facility despite the lack of approval from the county. Amidst these, Tesla and Musk received support from numerous entities, from the Bay Area Council, the mayors of Fremont and Palo Alto, U.S. Treasury Secretary Steven Mnuchin, U.S. President Donald

Trump and House Speaker Nancy Pelosi. Officials from other states such as Florida, Oklahoma and Texas also expressed their support for Tesla.It did not take long before Alameda County acknowledged Tesla’s “Return to Work Playbook.” After the electric car maker adjusted some of its safety guidelines per the county’s request, the Fremont factory was allowed to reopen and gradually return to operations. Today, vehicle production is ongoing, and vehicles fresh from the factory are being transported on car carrier trucks. Ultimately, the drama that surrounded Tesla’s primary vehicle production facility in the U.S. may have seemed like noise for the electric vehicle community, but the fact it was able to expedite the reopening of the Fremont plant goes a long way towards helping Tesla’s Q2 2020 results. The second quarter of 2020, after all, will be very challenging, considering it holds the brunt of the coronavirus shutdown, which has affected the global market. We thank Teslarati for reprint permission.

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In November, Californians Will Decide If App-Based Drivers Should Be Classified as Independent Contractors by Ryan Byrne, The Center Square

At the election Nov. 3, Californians will decide a ballot initiative that addresses whether app-based drivers should be classified as independent contractors. In September 2019, Gov. Gavin Newsom (D) signed AB 5, which established criteria to determine whether a worker is an employee or independent contractor. Uber, Lyft and Doordash proposed a ballot initiative that would exempt app-based workers from AB 5. The ballot initiative would also adopt labor and wage policies specific to app-based companies, including a net earnings floor, health care subsidies and occupational accident insurance for workers. Examples of companies that hire app-based drivers include Uber Technologies, Lyft, DoorDash, Instacart and Postmates. The ballot measure would not affect how AB 5 is applied to other types of workers. AB 5 established a three-factor test to decide a worker’s status as an independent contractor. The

three-factor test requires the worker is free from the hiring company’s control and direction in the performance of work; the worker is doing work outside the company’s usual course of business; and the worker is engaged in an established trade, occupation or business of the same nature as the work performed. Tony West, chief legal officer for Uber, and John Zimmer, president of Lyft, have both said their companies continue to operate without reclassifying their workers as employees. California Attorney General Xavier Becerra (D), along with Los Angeles City Attorney Mike Feuer, San Diego City Attorney Mara Elliott and San Francisco City Attorney Dennis Herrera, sued the rideshare companies on May 5, arguing their workers needed to be reclassified as employees. Uber and Postmates launched their own legal complaint, contending AB 5 violated their constitutional rights and their workers’ constitutional rights. Courts have not yet decided either case.

Through May 17, the campaign Protect App-Based Drivers And Services, supporting the ballot initia-

Credit: vaalaa/Shutterstock.com

tive, raised $110.7 million, including $30.5 million from Lyft, $30.2 million from Uber and $30 million from DoorDash. Instacart and Postmates also contributed $10 million each. The California Labor Federation, AFL-CIO, organized the Coalition to Protect Riders and Drivers to campaign against the ballot initiative. The campaign raised $690,000, with the Transport Workers Union of

America providing $500,000. Protect App-Based Drivers And Services filed 987,813 signatures. At least 623,212 (63.1%) of the signatures needed to be valid. On May 22, the office of Secretary of State Alex Padilla announced a random sample of signatures projected 77.5% were valid, which amounts to a projected 765,555 valid signatures. The ballot initiative is the sixth citizen-initiated measure to qualify for the November ballot in California. Four citizen-initiated measures are pending signature verification. At least two additional campaigns have decided against filing signatures due to the coronavirus pandemic and will instead file signatures this summer to appear on the 2022 ballot. The California State Legislature can also place measures on the ballot through June 25. We thank The Center Square for reprint permission.

CA Body Shop Opening New Location Bodys By Boyd is pleased to announce it is officially open at its new location at 49643 Hartwell Rd. in Oakhurst, CA. The new facility is 16,100 square feet, more than triple the size of the previous building. All new state-of-the-art equipment has been installed, including a GFS Ultra spray booth, Kaeser air center compressor system, GFS prep stations, dedicated aluminum repair and the latest welding and air conditioning equipment. Parking and access has vastly improved, as have the beautiful new offices and spacious lobby. Unique for a body shop is a dedicated gallery where one can browse Sheila Boyd's latest art. The staff is highly trained and I-CAR Gold certified, as well as trained and certified by auto manufacturers in the latest and proper repair techniques.

The body shop works with all insurance companies to return vehicles to pre-accident condition in a timely and professional manner. As an essential business, Bodys by Boyd is dedicated to keeping customers and staff safe during the COVID-19 pandemic. The office is cleaned and disinfected multiple times daily. Vehicles are disinfected prior to delivery. The body shop is here to serve all collision repair and repainting needs. Cuastomers should remember they have the right to have their vehicle repaired at the shop of their choice, and they do not need to take their vehicle out of town for high quality repairs. As we always say: “We meet the nicest people by accident.” We thank Sierra News Online for reprint permission.

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Executive Charged ly of those seeking to fraudulently profit from the current health crisis,” said Bennett. “This case exemplifies how collaboration with our federal partners is vital to these investigations.” “Our office will aggressively investigate any false statements made to gain access to SBA’s programs,” said King. “OIG and its law enforcement partners are poised to root out fraud in SBA’s programs and bring wrongdoers to justice.” According to the complaint, Palermo, 56, of Novato, CA, is alleged to have orchestrated multiple schemes to defraud his victims. While working as the manager of the San Francisco Hilton hotel between 2013 and 2016, Palermo allegedly embezzled large sums of money, including through capital improvement kickback schemes. One contractor frequently hired by Palermo for projects at the hotel is suspected of paying Palermo approximately $1.5 million in kickbacks between March 2013 and June 2016. Palermo allegedly ensured the contractor’s inflated or fraudulent invoices were paid by Justice Investors, LP, the owner of the hotel. After depositing Justice Investor checks to his business banking account, the contractor transferred

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Help from Foundation voiced similar appreciation for the foundation. “I’m going to keep this in the back of my mind, and whenever they ask for what they need, I’m going to try to respond.” The foundation’s COVID-19 Fund received more than $260,000 in donations. To donate, visit: https:// www.flipcause.com/secure/cause_ pdetails/Nzg3MTk= To apply for assistance, visit: https://www.flipcause.com/secure/ your_details_more_info/Nzg3NTQ =/49150 Petra Schroeder, an industry consultant who serves on the board of trustees for the foundation, said

funds into an illegitimate living trust bank account and then wrote checks back to Palermo or entities associated with Palermo. After leaving the Hilton in 2016, Palermo worked for GMP Cars, a set of collision and auto repair centers in the Bay Area he owned and operated. The complaint alleges Palermo used GMP Cars funds to pay for lavish expenditures, including a Ferrari racing car and personal travel. The complaint explains that Palermo’s reliance on the company’s funds to finance his personal expenditures left the company in financial distress. Then, in 2019, Palermo applied to an SBA Preferred Lender for two loans to GMP Cars for a total of approximately $5 million. The SBA guaranteed 75% of the loans. According to the complaint, Palermo made several material omissions and false statements during the 2019 loan application process. For example, Palermo failed to disclose that in September 2019—during the loan application process—he had overdrawn his business bank accounts by more than $700,000. Palermo also misrepresented amounts he owed German Motors Corporation in connection with GMP Cars’ acquisition of a collision center in San Francisco, going so far as to submit an altered promissory note to the preferred lender. Most recently, in April, Palermo made false and misleading statements its COVID-19 Fund has received more than 560 applications for assistance, though that includes some from people outside the industry, who were denied since they did not meet the foundation’s criteria). By late May, more than 350 valid applicants—70%—have already received funds, with the rest in some stage of the verification process.

when he applied for and received approximately $1.7 million through the SBA’s Paycheck Protection Program (PPP), a relief program offered through participating lenders to aid small businesses during the COVID-19 pandemic. In the PPP application, Palermo falsely certified that GMP Cars had employees for whom it paid salaries and payroll taxes. The criminal complaint includes an internal GMP Cars spreadsheet showing Palermo had decided not to pay required payroll taxes since at least mid-2019. According to the complaint, laidoff GMP Cars employees have had difficulty in recent months collecting their full unemployment benefits due to GMP Cars’ failure to pay payroll taxes and accurately report employee wages to California’s Employment Development Department (EDD.) In sum, the complaint alleges the investigation is ongoing and that, to date, the evidence has established that since 2013 Palermo fraudulently obtained at least $8 million through his illegal conduct. Palermo is charged with honest

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services wire fraud, wire fraud and making a false statement in a loan application to an FDIC-insured lender. The wire fraud charges each carry maximum statutory penalties of up to 20 years in prison and a $250,000 fine, while the false statement charge carries a maximum of 30 years in prison and a $1,000,000 fine. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing imposition of a sentence. The charges contained in the criminal complaint are allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law. Palermo is scheduled to make his initial appearance in federal court on June 10 before U.S. Magistrate Judge Laurel Beeler. The case is being prosecuted by the Corporate Fraud Strike Force of the U.S. Attorney’s Office. The case is being investigated by the FBI and SBA OIG. Source: The U.S. Attorney’s Office Northern District of California.

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22 JULY 2020 AUTOBODY NEWS / autobodynews.com

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and n apder. each lties nd a tatem of ,000 owd by n of and mpo-

the s. As nt is until

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autobodynews.com / JULY 2020 AUTOBODY NEWS 23

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Continued from Page 12

Turn a Corner

Looters Raid FCA Dealership Driving Off With Hellcats, Burn AMG GT In Mercedes Showroom

ic. Notably, car sales could be an important barometer for the rest of the U.S. economic recovery, as the auto industry represents about 3% of GDP, according to the Center for Automotive Research. Though cautiously optimistic, Dolan, for one, said the company’s forecast for the year has been drastically altered amid the uncertainty surrounding the virus and the unknown of how the state’s reopening plan progresses. “I don’t think we’re going to be anywhere near our profits of last year,” Dolan said. “But, I think we can all stay viable and keep people working and make a profit if you run your business right. “If I can keep my people working and we can keep our customers happy and I break even, I’d be ecstatic right now. That would be a definite win.”

by John Halas, Car Scoops

Chaos erupted across the Bay Area in California over the weekend as civil unrest over the death of George Floyd, a black man who was killed in police custody in Minneapolis on May 25, turned into widespread looting. In San Leandro, one of the largest suburban towns in Alameda County, rioters ransacked an FCA dealership, with videos posted on social media showing individuals doing burnouts and driving off with a number of vehicles, including at least two Dodge Challenger Hellcats, a Dodge Charger Widebody and a Jeep Grand Cherokee. The dealership in question is the San Leandro Chrysler Dodge Jeep RAM SRT located on Marina Boulevard. While some videos shared on Instagram show looters driving off the dealer parking lot and onto an adjacent road, it’s not known at this point if the Dodge and Jeep vehicles were stolen purely for a quick joyride only to be abandoned later

We thank Northern Nevada Business Weekly for reprint permission.

KEARNY MESA

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on the road, or if they will be broken down for parts. Aerial footage from an NBC Bay Area chopper that looks to have been shot after the rioters dispersed shows the destruction left behind, with several broken windows in the showroom and damaged vehicles on the parking lot. In another instance in the Bay Area, someone allegedly even went as far as to steal a police horse―or at least that’s what the Instagram user claimed. Following the unrest across the area, the Alameda County Sheriff’s Office issued an advisory the night of May 31 warning all residents to stay at home. “All Alameda County residents are advised to stay home due to the civil unrest reported throughout Alameda County and the greater East Bay Area,” read the advisory. “Unless personal travel is necessary, we are recommending residents stay home due to the high number of police actions. Currently there are multiple reports of large, mobile groups of rioters and looters travel-

ing throughout the East Bay Area.” Other dealerships have also appeared to have been hit in the Bay Area including Mercedes-Benz of Oakland at 29th and Broadway on May 30. Social media videos show looters setting an AMG GT Coupe on fire while other vehicles were broken into and vandalized, causing thousands of dollars in damages. On June 1, the Mercedes Oakland dealership posted a video on Facebook showing their employees cleaning up the showroom and stating “Our family is rebuilding. We are a part of the community.” We thank Car Scoops for reprint permission.

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Continued from Cover

Training and Cleaning need to keep all of the players together.” Mike’s Auto Body’s Director of Training Lupe Algood is trying to strip the panic out of the pandemic for his apprentices and mentors, by keeping them busy, engaged and productive while helping them to enhance their skills. “We’re upgrading, fine tuning and painting a lot of our equipment,” he said. “This way, we will be ready when we get back to our normal production schedules. Our students and techs are focusing on improving themselves and are going to use this unique opportunity to achieve big things that will help us all down the road.” Mike’s Auto Body is offering a wide range of different training programs to its employees and trainees, led by Dearlove, Toner and Algood. “We’re doing all of our I-CAR Gold training right now, so that all of our people will maintain their certifications,” Dearlove said. “At Mike’s,

we pride ourselves on maintaining an I-CAR Gold status at all of our locations. In today’s world of collision repair where cars and processes evolve rapidly, we need to stay on top of it so that we can continue to serve our customers and maintain our status with I-CAR.” Toner also sees significant value in pushing training during these uncertain times. “We are meeting with all of our estimators [wearing face masks and sitting 6 feet away] and focusing on what all of our insurance partners require,” Toner said. “We are always working on enhancing our estimating processes so that we can continually get high KPI scores. We want all of our estimators to be the most knowledgeable in the industry and that requires intense ongoing training to achieve that.” Other training Mike’s Auto Body is facilitating for its employees includes EPA Section 609 certification, which, under the Federal Clean Air Act, requires technicians who service motor vehicle air conditioning MVAC systems or handle Freon to be certified.

This includes repairing, leak testing and topping off of air conditioning systems low on refrigerant, as well as any other repair that requires the dismantling of any part of the air conditioner. In addition, the MSO is providing PPG training for technicians who want to master the proper use of all PPG color tools and color theory and its practical application in matching and tinting if necessary. Hands-on exercises provide the technician with practical tinting experience. Certified technicians are recertified to the next level for which they are eligible upon successfully completing this program. “We provide this training for both our painters and our preppers and it covers a lot,” Dearlove said. “They learn about things like color perception, color theory, color plotting, understanding the formula, types and methods of color adjustment, as well as hands-on tinting and blending exercises. “There are so many new products out there now like colored clearcoats, pearls and more three-stage systems. We need to continually learn about all

of them and how we can use them to provide a superior finished product.” Another series of training classes Mike’s technicians and estimators will take during this slow period will be Advanced Driver-Assistance Systems (ADAS) seminars provided by TechZone, a diagnostics company located in Concord, CA, that has been providing technical services for Mike’s Auto Body for the past 14 years. TechZone President Matt Patterson and his team of experts will conduct the training. “As automotive technology changes all the time, we need to move quickly to stay ahead of the curve, and ongoing ADAS is the most important technology out there right now,” Patterson said. “By staying on the cutting edge and learning as much as they can when it comes to airbags and ADAS, the techs and Mike’s are positioned for ongoing success.” “As the pandemic clears and people’s lives slowly return back to normalcy, Mike’s Auto Body will be in a very good place, as a stronger and better company from top to bottom,” Dearlove said.

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The Auto Industry’s Response to Black Lives Matter Protests by Morgan Pritchett, The News Wheel

zations that money would go to.

Over the last two weeks, the nation has come together in protest of police brutality against black individuals following the death of George Floyd. While some automakers are adamantly speaking up in support of the Black Lives Matter movement, many are staying silent. Let’s take a look at which brands are standing up for justice.

Mercedes: Before posting a black square on Blackout Tuesday, Mercedes-Benz published a statement on Twitter about standing up for racial inequality: “When injustice occurs, people have a responsibility to speak out. Companies have a responsibility to take action. We’re making a donation

Donations and statements BMW: After participating in Blackout Tuesday, BMW tweeted the following: “BMW Group stands with those who demand a more inclusive, equal and just society, that’s why we will be making a donation to the @ naacp_ldf in support of the Black community, #wesupportblacklives” with a link to the organization’s website. The amount of the donation was not disclosed and, after reaching out for comment, the automaker did not go into details on the amount. General Motors: CEO Mary Barra, in a message to employees, wrote: “I am both impatient and disgusted by the fact that as a nation, we seem to be placated by the passive discussion of ‘why.’ There comes a time when we are compelled to stop diagnosing what is wrong and start advocating for what is right.” Barra also said she would commission an inclusion advisory board of internal and external leaders, including herself. The company announced June 5 it would be donating $10 million to organizations promoting inclusion and racial justice. Infiniti: On the automaker’s Facebook and Instagram profiles, Infiniti took a stand against racism in the form of a post stating, “Life should be a right, not a luxury. Black lives matter.” Another post stated, “Having a social platform is a luxury. We will use ours for change,” along with a caption that included, “Our first step to doing our part is to halt our advertising, to make more space for Black voices on social media. We’ll be dedicating our social media to organizations we are supporting and donating to, in hopes that you will join us.” There was no follow-up about the donation amount(s) or which organi-

Protestors have been making their voices heard worldwide. Credit: Taymaz Valley via CC

to the NAACP Legal Defense Fund and invite you to join us.” There was no mention of the donation amount. Statements Ford: CEO Jim Hackett and Executive Chairman Bill Ford told employees the company would “lead from the front” and “we know that systemic racism still exists despite progress that has been made. We cannot turn a blind eye to it or accept some sense of ‘order’ that’s based on oppression.” There was no mention of any sort of donation in the full statement and I have yet to hear back after reaching out for comment. FCA: According to the Detroit Free Press, CEO Mike Manley wrote the following in a letter to employees: “On behalf of everyone at the company, I emphatically reject the hatred and prejudice that still tears at the fabric of our society and which led to the death of George Floyd and so many before him. Although we are seeing the rawness of this issue exposed in the United States, the scourge of racism and discrimination has no respect for international boundaries. As employees of one of the largest companies in the world, we absolutely have the individual and collective power to make a difference. Starting from how we treat each other at work through to creating opportunities for everyone to fulfill their potential, FCA can be a powerful and meaningful force for change.” A rep for the brand told

me that the company does not have any plans for a donation announcement at this time. Honda: The Honda Twitter account retweeted the Honda Inclusion account and said, “After listening and reflecting during this painful time, Honda is putting its beliefs and values into action,” with a link to the Honda media site. In the lengthy press release, which was sent directly to all Honda employees, the automaker discussed the importance of inclusion and diversity. It then went on to list ways the company is taking steps to help the black community, as well as ways others can chip in. While there was no confirmed solitary donation mentioned, Honda has a history of supporting HBCUs and minority-owned businesses through its many charity organizations. Lexus: Along with postponing the world premiere of the new IS out of respect, Lexus took to its social profiles to announce it was against racism and asked for ways it could help.

On Twitter, it said, “Use our comments section to tell us how we can do more to raise awareness in an effort to end unacceptable bigotry and societal issues of violence, killings and racism.” It’s not the most proactive method of helping and certainly speaks to the lack of diversity in the company, but at least it’s looking for ways to help. We’ll see if it follows through with some sort of diversity training or donation. The Lexus media rep has not yet replied to my inquiry regarding a donation. Mitsubishi: Before reaching out to Mitsubishi, the brand had yet to post anything about the nationwide protests. After reaching out, I received an email the next morning, June 9, stating the company would be releasing statements on all social platforms. The post included the acronym RESPECT, which stands for Respect, Embrace uniqueness, Share best practices, Personal commitment through self-awareness, Educate every employee, Commit to corSee Auto Industry Response, Page 42

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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.

Determining Whether—and How—to Charge for OEM Research I get a lot of questions from shops regarding billing for the process of researching OEM repair procedures. Obviously, I can’t tell anyone whether to charge for this, nor how much to charge, but I can point to some things you may want to consider as you make that decision for your business. First, I can tell you what our “Who Pays for What?” surveys (www .crashnetwork.com/collisionadvice) indicate about what’s happening in the industry related to billing for OEM procedure research. The surveys definitely show a growing number of shops are charging an administrative fee for this work. Back in 2015, three in four shops said they’d never sought to be paid such a fee. Last year, just shy of half (49 %) said they had. Among those seeking to be paid, about half said the largest eight insurance companies weren’t paying the fee, but

16% said otherwise, saying they were being paid “always” or “most of the time” for OEM research. That was up from just 6% five years ago. Next, I can tell you the two aspects to keep in mind as you deter-

but most charge a subscription fee. If you’re working on a type of vehicle you rarely repair, you might just pay for a day or two of access to that automaker’s procedures, and your receipt for that can serve as part of

A “Who Pays for What?” survey last fall found more than two in five shops at least sometimes include a line item charge to cover their subscription fees to OEM repair information

mine whether and what to charge for OEM research. First, consider what you’re spending to access the OEM procedures. A few automakers make access to the information available at no charge,

the justification for your charge. But maybe you buy annual subscriptions to some automakers’ procedures because you use them regularly. A “Who Pays for What?” survey last year, for example, found more than

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25% of shops have an annual subscription to the Honda/Acura repair information website, and even more have one to the Nissan/Infiniti website. In that situation, you might consider calculating a per-vehicle cost for that access. Say you pay $400 a year to access one automaker’s information, and you repaired 100 of that automaker’s vehicles last year. Then that access averaged $4 a vehicle. Whether you bill for it—marked-up or not—is another business decision for you to make. Our surveys last year asked whether shops charge a separate line item specifically to cover the access fees they pay for OEM information. Almost one in four (23 %) say they always or almost always do, and another 20% said they do when using an OEM site for which they don’t have an annual subscription.

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The second thing to consider as you determine whether and what to charge for OEM research is the labor time involved. That consists of the time to find all the needed information within the OEM system, read it, print it and distribute or review it as needed with technicians. As many of you are likely well aware, that can be a time-consum-

el. You need to know, for example, what’s involved in removing and reinstalling the bumper cover. You need to know, if removing and reinstalling a door is involved, whether you need to reinitialize the pinch protection on the window. You need to know what steps are required after reconnecting the battery if disconnected for welding. You need to

el and may change over time. It also can involve digging for needed information other than the first place on the OEM website where you might assume you’d find it. I was contacted by a shop that had researched the OEM procedures for replacing a rocker panel on a specific vehicle. Because no sectioning procedure was shown, the shop re-

Among nearly 500 shops responding to a “Who Pays for What?” survey last summer, about half of shops acknowledged never seeking to be paid for the research of OEM repair procedures they do, yet among those who do charge, 16% say they are paid for it regularly

ing task. One of my teammates, Josh Kuehn, recently wrote an estimate to replace a quarter panel on an Acura MDX. He had to pull more than 90 pages of OEM repair procedures. It’s not a matter of just pulling the procedures for the quarter pan-

look up all the corrosion protection steps involved. Some might argue that Josh should know some of what’s included in those procedures. But you can’t take anything for granted, because procedures vary from model to mod-

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outside the box and look in other areas as you do the research. All of the OEM websites are organized differently. I had a similar experience to Josh’s when I recently wrote an estimate to replace a quarter panel on a Toyota Camry; more than 90 pages of documents were involved. I by no means claim to the best at researching OEM procedures, but I believe I’m above average. Yet I easily had five hours into researching the OEM procedures and writing the estimate. Now obviously, the more OEM research you do, the better and faster you will get at it. Repetition breeds efficiency. That’s why a few shops— our surveys indicate about one in 20—designate a particular person to do all the OEM research. There are third-party solutions that standardize the organization of the OEM information, which is great, though I still am a proponent of accessing the OEM information directly. But in any case, this is definitely not a five-minute task. I know there are efforts under way by automakers, estimating sysSee OEM Research, Page 40

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Day Job/Night Job: Collision Writer Launches Fun Art Project in Quarantine, Now Hundreds of People Want His Pet Drawings Then, in October 2011, Attanasio was presented with a binder filled with Ed Attanasio started our Day Job/ all the drawings he created during his Night Job column here at Autobody rehab: an eclectic collection of baseNews in 2017, writing stories about ball and football players, gangsters, people in the collision repair indus- dinosaurs, dogs, birds, monsters and try who have amazing sidelines and aliens. second careers as musicians, artists, “All of the peculiar-looking ilauthors, performers—even a techni- lustrations that emerged from my stroke-scrambled brain were all tocian with a world-class Frisbee dog. Attanasio has interviewed a wide gether and ready for something…but range of creative people in different what?” he said. “Could this be more capacities within the collision repair than just a hobby or a distraction?” industry, and now Autobody News is The answer turned out to be yes. covering him and his dynamic art ca- Attanasio sold his first piece, “Bushers,” consisting of 48 fictional reer. baseball players, for $3,000 at a gallery in San Francisco. It also led to a graphic novel based on the image and gallery shows throughout the Bay Area. In April, Ed began looking around for something he could do to bring joy to people during the COVID-19 ABN Writer Ed Attanasio started a thing called the pandemic. Pandemic Pet Project to use his art to create goodwill One day, a few friends during these uncertain times. Credit: Ed Attanasio asked him to draw their pets, Attanasio started sketching as and when they saw what he created, a form of rehab after he had a mini he said they either smiled or cried stroke in 2009. Little did he know that tears. So, he reached out to all of his eventually, his illustrations would lead friends on Facebook and Instagram to a career as an artist, surprising art and started the Pandemic Pet Project critics, gallery owners, his friends and (PPP) to draw abstract images of peoples’ pets for free. In return, Attanasio even himself. Attanasio’s stroke didn’t hamper his motor skills, but it did affect his brain to the point where he was forced to take a break from his job at Autobody News. To occupy his time, he began drawing a series of illustrations on Post-It notes for hours and hours during his 14-month recovery. Attanasio said he drew these characters only as part of his therapy and nothing more at first. “I never thought anyone would see them, and I surely never imagined I could sell them. My friends He is creating four images daily, with more than 200 completed and 150 still left to draw always seemed to enjoy the characters, but eventually [the Post-It notes] asked them to pay it forward by dowould migrate down to our refriger- nating as much as they could afford ator door and after a while, they’d to their local pet rescue organization. disappear,” Attanasio said. “I figured What started out as a favor to they were getting tossed, but I wasn’t friends soon gained momentum and concerned, because I could see that I turned into something much bigger. was steadily improving and knew the “I thought maybe half a dozen people would respond, but on the first art was playing a role.” by Autobody News Staff

day, I had 30 requests and more than 50 by day two, and it’s still growing!” he said. Attanasio added the total to date is 350 illustrations requested and more than 200 completed.

Many people take photos of their pets with the art and post them on the Pandemic Pet Project page on Facebook

Attanasio’s art project has attracted media attention from outlets such as the San Jose Mercury News, KNTV, KGO, East Bay Times and the Associated Press of Taiwan, among others. As far as methods go, Attanasio said, “I get the colors and image in

my head right before I draw. I never sketch first; I just dive in.” A writer for Autobody News since 2008, Attanasio said, “I love writing about all of the philanthropy in this industry and interviewing interesting people like the late Gene Crozat, Michael Anderson and Todd Tracy, the attorney in the John Eagle Honda case. I’m known for writing feel-good features highlighting all of the positive things in this industry.” To learn more about The Pandemic Pet Project, check out the Facebook page: www.facebook.com/ pandemicpetproject/?modal=admin _todo_tour Would you trust your pets with Attanasio? If so, submit photos of your cat, dog, bird, lizard, goat or horse along with your mailing address to him via Facebook Messenger and get ready for a small piece of original art to arrive on your doorstep. Limit two per person. “If I cut off an ear, maybe these will be worth something one day,” he joked.

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All Girls’ Bogi Lateiner Discusses Post Corona Customer Care and Communications by Chasidy Rae Sisk

Now that the world has been dealing with the COVID-19 pandemic for a couple months, things are slowly starting to reopen, leading people to talk about the new normal and what life will be like post-corona. Bogi Lateiner, of All Girls Garage, dove into the topic of “Post Corona Customer Care and Communication” during a recent installment of a collaborative series of technical and management classes focused on necessary topics for navigating business operations during the COVID-19 pandemic. The series is hosted by the Carquest Technical Institute and Worldpac Training Institute (CTI+WTI.) Charlie Sanville, most commonly known as the Humble Mechanic from YouTube, introduced Lateiner, who began by posing several questions: “How much has changed, will these changes be permanent and, if not, how long will they last? “We’ve all been forced to find ways to carry on with many aspects of our lives, including auto repair,” Lateiner said. “Here’s my suggestion: What if corona isn’t really a game changer at all? What if it’s a game elevator? Maybe, the pandemic is giving us a clearer view of what has to change within our world and within our industry and challenging us to change our perception of things.” “Very little has changed on a deep and fundamental level,” Lateiner insisted. “But this affords us a unique opportunity to examine what we, as an industry, are doing to care for our teams and our customers. Do we have the things in place that it’ll take to move into the future? “The automotive and collision industries have been in the process of revamping how we serve customers and compete for some time. We don’t know the outcome of COVID-19 since it’s still happening, but this is the time to ask ourselves the hard questions and hopefully come up with new innovations.” Although the outbreak has devastated countless businesses, that is the case with any other major disruption as well, so shop owners should

focus on what it means to run a successful shop in a turbulent world, regardless of the current disruption. “How you handle it will determine whether you succeed or not; disruptions are weathered by businesses that are willing to question, adapt and grow,” Lateiner said. “We’ve seen shops go out of business, but other shops are thriving because they are embracing change. If you’re not in a

Bogi Lateiner

state of growth, you’re in a state of decay. This is a natural process, but right now, it’s moving as an unprecedented rate.” The COVID-19 pandemic is a huge disrupter, but Lateiner believes the bigger issue is not being customer-centric. “Not focusing on your customers will be more detrimental than the pandemic itself. We’re in the business of customer service, and we need to re-evaluate what being ‘of service’ looks like,” she said. “The most dangerous phrase you can utter is ‘We’ve always done it this way,’ because the same thinking leads to the same results. If we dig in our heels, we’re not going to survive—being self-righteous isn’t going to serve us, but being customer-focused will.” Lateiner pointed out that customers’ increased concern for cleanliness, desire for digital appointments and tendency to drive fewer miles are all things that have been trending in that direction. “Coronavirus isn’t changing anything—it’s just exacerbating and accelerating things,” she stressed. “How we do things might change, but the why shouldn’t change. If you’re just in business to make money, that’s not going to cut it, but that was never enough. “We’re in this business because we want to be people’s heroes,”

Lateiner continued. “We keep them safe and treat them respectfully. That’s how we compete with dealerships; we care so much about our customers, and that shouldn’t have changed even though COVID has raised the stakes and the stress level.” Because most people are under increased stress, Lateiner emphasized the importance of ensuring service skills are well-honed. She reminded attendees customers have never been excited to come to the shop. “People are scared of being taken advantage of. They come to you with baggage from past experiences and stereotypes about the industry, but with less financial security in the current crisis, people are even more stressed, so you need to approach them with empathy and realize they are experiencing a whole range of emotions that you can’t predict,” she said. “We never knew what was going on for our customers, but now, everything is exaggerated.” Lateiner said the only opinion that matters is that of the custom-

SOUTHE

ers. People are divided on believing the pandemic is real or a hoax, but a shop owner’s job is to recognize this divide and adapt their business practices to accommodate those customers who are terrified for their lives. “Your opinion doesn’t matter,” she said. “It’s not about you, it’s about your customer. Your customer’s perception is your reality.” Despite the changes caused by the pandemic, the essentials of communication haven’t changed. It’s important to carefully choose words and monitor tone to build trust. “During high stress, listening skills are non-existent,” Lateiner explained. “A stressed customer isn’t thinking clearly, which increases the chance for missed communication, which is the cause of 99% of customer problems. “All customers have one thing in common: their humanity. They need help solving a problem, but they come to you with thoughts and feelings of their own. People want respect and appreciation, to be valued and heard, so it’s more important than ever that

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you are present, listening actively and suspending judgment.” Communication begins being 100% present to completely hear what the customer is saying and pick up on any non-verbal cues. Next, practice active listening, encouraging customers to fully express their needs. Finally, suspect judgement. “Judging a person doesn’t define who they are; it defines who you are. People don’t feel heard when they feel judged,” Lateiner said. “You don’t know what’s motivating their decisions, but you need to respect them.” Shops should get creative in their communication, employing ways to make customers feel comfortable. Adopt new policies as needed, then communicate how the shop is taking care of its customers. Communicate alternatives to avoid person-to-person contact, but with fewer customer interactions, it’s important to make each one count. Social media is a great way to demonstrate all of these items. Dealerships have the advantage because they’ve had processes in place to meet customers’ current needs for a long time, but independent

shops can compete by playing on their own strengths, which is building relationships. “If you don’t get creative in how we do that, the advantages of going to a small shop gets eroded. We’ve got to step up our game to keep from becoming a commodity,” Lateiner urged. Addressing how to deal with challenging customers, Lateiner reminded everyone of customers’ stress levels in the current situation and pointed out that an upset customer wants to feel heard, be acknowledged and know the perceived wrong will not happen again. “Remember it’s not about you. It’s not a personal attack, even though it often feels that way—unless you’re being intentionally obnoxious and awful, this just isn’t about you. You have to be kind and empathetic, even when they’re not being kind to you. “You cannot argue with feelings,” Lateiner added. “The accuracy of the complaint is 100% irrelevant because you can’t control their perception. The reality is they’re upset, and we’re not dealing with the complaint, we’re dealing with their feelings. You can’t tell them what they’re

allowed to feel, and feelings of lost power, fear, sadness and more often comes out as anger because anger is more socially acceptable. You can’t meet anger with anger, though. You have to meet them where they’re at and work together to resolve the problem.” Lateiner also advised it’s best to let an angry customer get their feelings off their chest since they are physically unable to listen to you until they’ve released their anger. “When they’re done, you can start the rest of the process, but if you start talking before they’re done, you aren’t going to get anywhere. You just have to shut up.” Mistakes made should be owned, using the five-part apology. Thank the customer for bringing the issue to your attention, use empathy, acknowledge them, offer a genuine apology and then work with them to come up with a solution. Lateiner also recommended practicing self-care. “It’s a priority and a necessity, not a luxury. If you have a really rough customer, take a walk or watch a video to make your heart happy and

fill you back up. Otherwise, you’ll take that bad experience to your next customer and wind up with a whole days’ worth of unhappy customers. “Don’t get stuck, get excited about this and make it an opportunity,” Lateiner encouraged attendees. “Get excited about growth and challenge. Use it as inspiration to innovate and ensure that, in the thinning of the herd, your shop is one that not only survives but thrives because many shops are truly thriving right now, despite the challenges and obstacles.” “We don’t know what the world looks like after COVID-19, but we know that what comes next, the future of our industry, is up to us. Let’s choose collectively to make this be the thing that launches our industry into positive growth. Let’s leverage this to show the world how great this opportunity is, and let’s see it as an opportunity to better ourselves and our industry, and to take better care of our customers in the future.” A complete webinar schedule for this series is available here http:// worldpac.com/training/classes/online/ or here https://ctionline.com/

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with Erica Schroeder

Industry Insight

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

with John Yoswick

Shops Share More Ideas on How to Get Work In the Door

Shop Showcase

Shops’ backlog of work dried up this on marketing and radio ads, includspring, with one national survey of ing advertising for restoration work, 500 shops finding that even in April, which we have not done in more with Ed Attanasio more than three in four could sched- than 20 years,” he said. ule any new work within one week Another New Hampshire shop or less. owner said he’s halted ads “slamming So what steps are shops taking insurance companies,” and is instead to try to get more work in the door? “projecting a positive attitude that we Massachusetts shop owner Carl are all in this together and we all will Garcia said being a LINE-X fran- pull through, and that my business with Ed Attanasio chise has helped, as Carl’s Collision will be here to help out the community Center has seen an influx of custom- in any way.” ers putting some money—including Gigi Walker of Walker’s Auto federal stimulus funds—into fixing Body in Concord, CA, is calling her up their pick-ups. shop’s regular fleet accounts to ask if “We’ve gotten very big into RVs, they have “any clean-up work we can fixing a lot more of them than ever do on any of their fleet vehicles.” She with Ed Attanasio before,” Garcia said. “I think we’re said the shop is offering free detailing going to have to have an open mind for each vehicle that comes in, and is about doing different types of work to “doing work for the food bank fleet at no cost to keep them on the road.” survive in the future.” Michael Berounsky of Ben’s Auto Jeanne Silver of CARSTAR MunBody in Portsmouth, withNH, Edagreed. Attanasio delein in Illinois said they are pursuing “We’re spending more money more fleet work as well, and is having

Social Media for Shops

SEMA Show Goes On

the shop’s marketing manager “contact local agents on a regular basis to let them know we are open.” The shop has been getting a lot of customer engagement with “Guess the Estimate” contests, in which the shop posts photos of a damaged vehicle on its Facebook page and offers gift cards to local restaurants to those whose guesses come closest to the actual repair costs. A shop in North Carolina installed a large sign in front of the shop to honor students graduating this spring; anyone who posts a photo of themselves in front of the sign on Facebook is being entered into a drawing for three cash prizes, totaling $800. John Quinonez of Kidd Collision in Garden City, NY, said he has started a business referral program through Alignable.com. A Pennsylvania shop is marketing that it is prioritizing “fast track”

Media and Publicity for Shops

repairs for any first responders. Old Dominion Collision in Eugene, OR, is sprucing up the “curb appeal” of the facility. “We are keeping everyone busy— using our PPP loan money—making lots of needed updates to the shop: painting, concrete resurfacing, front of building facelift, etc.,” shop owner Dustin Caldwell said. He said the company is also adjusting some of its social media and online marketing strategies, such as halting its location-specific geo-fencing, which shows ads to those within a specific geographic boundary, such as another body shop. “We are finding that not many people are shopping around, and are just picking a shop and going there,” Caldwell said. “It just didn’t make sense targeting our competitors when they are seeing such a reduction in traffic as well.”

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Silicon Valley Tech School Pushes Through Pandemic by Ed Attanasio

The pandemic has impacted tech schools throughout the country as they adapt to a whole new world. Online classrooms, drive-by graduations and online testing have become the norm, and many administrators are saying that some of these changes will stick long after the virus has passed. Nathan Chukes is the auto body refinishing instructor at Silicon Valley Career Technical Education (SVCTE) in San Jose, CA, with

Nathan Chukes has been teaching at SCVTE for 18 years and is known for being tough but fair

three decades of industry experience and 18 years as a teacher there. He runs the program with another instructor, Robert McTaggart. Chukes is well-known in the world of collision repair instruction for being a tough instructor who commands excellence, but many of his former students say only wonderful things about him. It’s been a new road to travel for Chukes and his students, but by adapting and changing his approach, things are working. “This year with the pandemic it has been very challenging and difficult for high school students throughout our country,” he said. “For me, as an instructor, I faced similar challenges, but I had to find a way to deliver instruction to my students. With only a quarter of a semester left of our school year, all hands-on and shop instruction was halted, due to the virus. At that point all instruction became viral with Zoom lessons and audio lectures.” Every year, Chukes gives awards to his star pupils, he said. “In the two classes I teach daily, there were four students in my program that stood out above all,” he said. “They never gave up, never

complained and never doubted that they had enough skills and knowledge to continue forward to graduate and prepare for the next chapter in their lives.” Chukes gives excellence awards every semester and seems to be a pretty good judge of talent, because several past recipients have gone on to be body shop owners, gifted painters and top technicians over the years, he said. This year’s award winners are: Junior Ever Martir from San Jose High School in San Jose, CA, received the award for Outstanding Student in Chukes’s AM Refinishing Class Senior Manuel Soto from Prospect High School in Saratoga, CA, received the award for Outstanding Student in Chukes’s PM Refinishing class Senior Jose Gonzalez from San Jose High School in San Jose, CA, received the Achievement award in Chukes’s AM Refinishing class Senior Manuel Madera from Andrew Hill High School in San Jose, CA, received the Achievement award in Chukes’s PM Refinishing class Every year, the school has an awards ceremony, but because of the pandemic, Chukes delivered the plaques to the winners at their homes, accompanied by signs to signify the moment. “It was of great pleasure to hand-deliver these custom signs to the homes of my award winners for the 2019-20 school year,” he said. “These four students deserved these awards, so I was going to do anything I could to get them in their hands.” By teaching high school-level students the latest technological changes in the industry and working with local body shops and vendors, Chukes is making all the right moves, and receiving unprecedented industry support as a result. Chukes was a journeyman painter for many years before he was hired at SVCTE. He has ASE certifications in both structural and non-structural repair and continually refines his classes to accommodate the industry as repair processes, tools and equipment change at a frenetic rate. Formerly known as the Central County Occupational Center (CCOC) before changing its name eight years

ago, SVCTE currently offers a two-semester program for high school students from six school districts in the South Bay Area interested in careers in the collision repair industry. After teaching for so many years, Chukes said this is no longer a job and more like a calling.

Junior Ever Martir from San Jose High School in San Jose, CA, received the award for Outstanding Student in Chukes’s AM Refinishing class

“I have been doing this so long that it’s in my DNA,” he said. “We have seen so many first semester students who have come here with very little knowledge and just two years later, they’re totally employable and have developed some confidence. “At here, they get to work on actual vehicles and they’re using the

identical tools that they will be using at a shop. Our goal here is to duplicate the real world out there as much as we possibly can, so teach them only OE procedures and always focus on safety and working in an organized way. “We also make sure to teach them life skills that they are going to need out in the working world, such as being punctual and communicating clearly. We want them to have the skills, but we also want them to be successful as people too.” Once the students have completed the program after one or two years, depending on what they choose to learn, Chukes and McTaggert will assist them in finding internships and jobs at local body shops. “We are constantly reaching out to the body shops, and many of them are willing to help us with old parts that the students can practice on, for example,” Chukes said. “When we see a graduate that is working at a local shop and we get good feedback about their performance and attitude, that is very satisfying.”

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GM Has a New Plan to Overtake Tesla, and It Starts With an Electric Van by Joey Klender, Teslarati

General Motors has a plan to take Tesla’s label as the leader of the EV industry away, and it involves taking on a market that the electric car maker has yet to tackle. GM is planning to develop an electric delivery van that would be used by entities like UPS, Amazon or even the U.S. Postal Service, Reuters was told by people familiar with the matter. The plan could put GM into the commercial electric vehicle conversation. However, the project, when combined with Ford, Rivian and other EV makers, is a potentially multi-billion-dollar idea that could help the companies build and deliver a substantial amount of electric cars. It could also help the companies tackle Tesla by targeting a segment the Elon Musk-led company is yet to address. That being said, it should be noted consumer vehicles are much more popular than delivery vans, so there’s not much of a threat for Tesla to be derailed by EVs designed to carry packages.

Carma Project Rewarding Replacing Airbags Carma Project on June 4 announced the launch of a program that pays vehicle owners to get their defective Takata airbag replaced. This program comes at a time when millions of owners continue to drive their vehicles to access essential businesses amid the COVID-19 crisis. This all-new program―which includes the reward of a $50 Amazon gift card―will further help address the recall of deadly Takata airbags. Despite extensive efforts by manufacturers, such as recall letters, public service announcements and dealer interventions, more than 12.5 million defective Takata airbags are still on the road today. Carma Project’s COVID-19 airbag recall program will stay in effect while supplies last. To participate, visit www.carmaproject. com/covid19 to download the Carma Project app and check your car. Source: Carma

GM’s plan for a van has not been reported previously. The company, along with Ford, was reportedly advised to keep any plans under wraps. Trucks and commercial vehicles are among the two Detroit-based companies’ most profitable vehicles, and suggestions from suppliers recommended things remain quiet regarding the development of electric vans. They “don’t want to leave the door open for Tesla,” something the

UPS Senior Director of Fleet Maintenance and Engineering Scott Phillippi said the company believes battery-powered vans have the potential to disrupt the commercial market. “It’s going to be similar to what the Model 3 has done for the consumer market,” he said. Even though GM is planning a strong push to develop battery-electric cars within the next few years,

companies both did with consumer passenger vehicles. The GM van is currently recognized under a pseudonym, the BV1. It is set to start production in late 2021 at the automaker’s Detroit-Hamtramck plant, according to sources, and it will share several components with GM’s electric pickups and SUVs. One of these is the Ultium battery system.

there is little evidence its technology will outperform Tesla’s. GM claims it is close to a million-mile battery, a major focal point of Tesla’s battery tech developers for years. But for now, the veteran automaker is yet to prove its EV capabilities in the market. We thank Teslarati for reprint permission

Women in Auto Care Accepting Entries Women in Auto Care, a community of the Auto Care Association, is now accepting entries for the 2020 Automotive Communications Awards. The Automotive Communications Awards are designed to recognize companies and agencies that provide automotive information to consumers and trade professionals through outstanding advertising, marketing, merchandising and effective public relations. A portion of the proceeds from award submissions goes toward providing scholarships to women entering the automotive aftermarket industry. Award winners will be notified in October and will be recognized at this year’s Aftermarket Products Expo (AAPEX) in Las Vegas, NV. For more infomation see the Women in Auto Care web page’s “Awards” tab. No entries will be accepted after Sept. 11. Source: Auto Care Association

Continued from Page 31

OEM Research tem providers and others to create solutions to these challenges, to help reduce the amount of time it requires to find the correct dozens of pages of documents needed for most repairs. But until that happens, you need to keep doing it, and consider whether it is something for which you should charge. And above all, save all the researched documents with the job file, so in case you ever need to do so, you can prove how the automaker called for the vehicle to be repaired at the time you did it.

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Industry Response porate culture change and Trust. The automaker has not made any statement regarding any donations. Nissan: Before participating in Blackout Tuesday on social media, Nissan tweeted about its history of supporting the black community. The post stated, “Our hearts are with the families of Ahmaud Arbery, Breonna Taylor, George Floyd and other victims of racial injustice, and our mission and resolve to be a part of the solution is as strong as it was in 1992.” The statement ended with a hopeful message about the future and then was followed up with another tweet containing a Martin Luther King, Jr. quote. However, there has been no mention of any donation(s) from Nissan or the Nissan Foundation. Toyota: In a post on Twitter and in a press release, Toyota released a long statement that closed with: “So now more than ever, we will encourage a constructive dialog to guide our ac-

tions as we continue to improve how we contribute to society, and inspire unity in every aspect of our lives, our business and our communities. Toyota will find additional ways of doing this by working together with our community partners across North America.” On top of this, an employee posted an email screenshot where the company encouraged employees to observe a moment of silence for eight minutes during the work day out of respect for George Floyd. Toyota’s corporate communications manager, when asked for additional info, stated the brand has nothing to announce at this moment. Volkswagen: After apologizing for a racist ad just two and a half weeks ago, Volkswagen was sure to make a statement on racial injustice. In a video shared on Facebook and Twitter, the auto brand mentioned the deaths of Ahmaud Arbery, Breonna Taylor and George Floyd. It also noted, “Volkswagen Group of America supports our Black employees and Black communities, who are feeling the pain and devastation of these events.” It went on to state Volkswagen would

first inspect its own practices to include more diversity in its workforce. The video ended with, “It’s a time of societal change―change that we, as a company and as a community, have the power to bring about. #DriveBigger.” However, no additional information was shared as to how Volkswagen would make a difference other than its internal training. I have not heard back from VW regarding my inquiry about a possible donation. Silence After scouring social profiles and press release sites, I reached out to the following automakers to see if they had any plans to make statements or donations. None of them have replied. Hyundai: While Hyundai ambassadors BTS personally donated $1 million to Black Lives Matter, and their fans raised $1 million to match, the automaker has been silent on this topic publicly. Kia: While Kia has recently done quite a bit to help health care workers amid the COVID-19 pandemic, including delivering PPE to hospitals na-

tionwide, the brand has yet to make any statement regarding the Black Lives Matters movement or the protests. Mazda: As of publication, Mazda has posted nothing on any social platforms or on its press site in regard to the nationwide protests. The last posts, published May 28, were related to supporting health care workers. Subaru: As of publication, Subaru has posted nothing on any social platforms or on its press site in regard to the nationwide protests. The automaker has been notoriously charitable in the past, so it seems out of character for there to be no mention of current events. The brand’s Twitter account has, however, been responding to users calling out inexcusable behavior of racist Subaru employees. Volvo: As of publication, Volvo has posted nothing on any social platforms or on its press site in regard to the nationwide protests. Its latest post was promoting the XC90 via an article posted by Bloomberg. We thank the News Wheel for reprint permission.

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Riots in Wake of Floyd’s Death Could Become Most Costly Civil Disorder for Insurers by Jim Sams, Insurance Journal

Rioting that erupted in cities across the country after peaceful protests mourning the death of George Floyd in Minneapolis may rival the 1992 Los Angeles riots to become the most costly civil disorder for insurers in U.S. history. The civil disturbance in Los Angeles after the videotaped police beating of Rodney King in April and May 1992 caused $775 million in damages―or $1.42 billion in today’s dollars, according to the Insurance Information Institute (III.) Those riots, however, were largely confined to one metropolitan area. Destruction and looting that erupted after Floyd’s death was reported in at least 25 cities, and spread into many suburbs as well. “We expect this to be a significant loss event as the impact is being experienced in large and small markets across the U.S.,” said III spokesman Mark Friedlander. “However, because it is an ongoing event, it is premature to determine the volume of property loss that will be incurred.”

Civil disturbances generally cause modest property losses when compared to natural disasters, data from III shows. Rioting in Los Angeles in August 1965―the second costliest civil disorder―caused $357 million in damages, measured in 2020 dollars. Together, riots in Baltimore, Chicago and New York City in April 1968 caused $231 million in damages in today’s dollars. By comparison, Hurricane Harvey in 2017 caused an estimated $20 billion in damages. Verisk’s Property Claims Service (PCS) over the weekend declared the riots a catastrophe event, which means it projects damages of more than $25 million. PCS hasn’t designated a civil disturbance as a catastrophe since the Baltimore riots in 2015. PCS head Tom Johansmeyer said the riots sparked by Floyd’s death may be the first civil disorder tracked by PCS that includes more than one state. Johansmeyer said “to better understand” potential riots from current rioting, it make sense to look at losses caused by civil unrest last year

in Chile―which grew from protests over an increase in subway fares in Santiago. Rioting there caused insured losses of $2 billion. About a third of that came from property claims from a handful of large retailers. “When you look at the United States, riot and civil disorder may generally look like a sub-US $100 million risk, although with the potential for much greater losses,” Johansmeyer said in an email to Claims Journal. “But, when you add a handful of large national or international companies with losses of more than US $100 million each, you could see a much larger industry loss begin to materialize. The large losses within the catastrophe could change the character of the overall event.” Keefe, Bruyette & Woods analyst Meyer Shields said June 8 that his best guess is losses from the current riots will be “relatively modest.” Nevertheless, the losses will combine with losses related to COVID-19 claims and property damage from a predicted above-average hurricane season to amount to a “capital event” for some reinsurers.

“As always, major losses should subsequently intensify the current hard market, but the ‘pain’―especially for individual (re)insurers exposed to disproportionate losses―would come first,” KBW said. III said riots, civil commotion, vandalism, looting and fire in the U.S. are covered perils under virtually all business owners and commercial insurance property policies. Merchandise stolen by looters will also be covered. III said about 40% of small to mid-sized businesses are also protected by business interruption coverage. “Even if the business was still shut down or operating at limited capacity due to the impacts of the COVID-19 pandemic, most insurers will determine income loss based on a 12-month assessment of the operation’s income,” III said in an email. That coverage may also protect businesses that have to shut down early because of curfews imposed by city governments, III said. We thank the Insurance Journal for reprint permission.

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ATI Shares Five-Step Rapid Recovery Plan for Automotive and Collision Repair Shops for Beyond COVID by Chasidy Rae Sisk

The Automotive Training Institute (ATI) on May 19 shared valuable information related to the current situation and how to survive the pandemic in “Beyond COVID: A 5-Step Rapid Recovery Plan for Auto Shops.”

ATI Senior Instructor and Coach Chris Brower discussed how to build customer trust and comfort, adjust marketing plans for today’s business environment, restore car count, build cash flow and “prepare to hit the ground running at the outbreak winds down.” “It’s going to be a while before we return to normalcy, and when we do, there will be new norms,” Brower began. “We need to understand that and stayed focused on our goals and our vision. We can’t allow COVID-19 to be something that prevents us from moving forward; we

is the most basic way to run a successful shop.” When gross profit is equal to a shop’s fixed expenses, that’s the break-even point. Before a shop owner even opens the door to customers, the shop starts in a deficit where a certain amount of money is needed just to get back to zero. Plus, money must be made on top of that to cover operating costs. “It costs money to operate every day,” Brower pointed out, explaining how to calculate the true cost of technicians, including wages, taxes and benefits. “You need to evaluate this cost for every team member to see who’s pulling their weight, but you also want to look at this as a team number to determine how much the team needs to produce,” Brower said. “It takes money to provide your team’s benefits, and the better the benefits you offer, the better you’ll be at attracting, hiring and retaining the right people. “There are too many things in our business that slow us down and are out of our control. That’s why establishing your shops effective labor rate is so important,” Brower said. “Your shop's effective labor rate is

“We need to stand out in times like this. Build your brand, and make it stronger.” — Chris Brower can’t let it distract us from what we ultimately want out of our business. “You need to be profitable because it takes money to do the things you want, so we need to get back to some of the basics.” Most shop owners have goals that include more free time, retiring with financial security, finding quality employees, keeping employees happy and making more money, but all those goals begin with having more money. “Shops sell parts and labor, and that should be a 50/50 mix,” Brower explained. “Anything you make money on has to be a cost of goods sold on your income statement. Producing sales, managing the cost of goods sold and then making changes as possible

what your team needs to produce per hour to hold the desired 60% labor margin to remain profitable. “Margins make you profitable, but dollars pay your bills and allow you to accomplish the things you need and want to do.” Brower reminded attendees they need to make enough money to cover their expenses and have sufficient funds to live on. He recommended shops hold around 50% to 55% on general parts margins and charge around 8% of parts and labor sales for shop supplies, reminding everyone shops lose 3% of their total sales from shop supplies. These are parts or items used in the repair but don’t necessarily go on the car, including protective materials, cleaners, wires,

lubes and adhesives. Brower also explained how to sell value to justify the shop’s pricing on parts, knowing the customer can buy the part cheaper then what the shop is selling it for. When ATI helps a shop build a “Road Map to Success,” it begins by working backwards to examine how much overhead the shop has, what investments are needed for the business and for retirement and how much the shop owner makes, to determine the total gross profit needed. “The shop owner is typically the lowest paid person in the shop, and that’s wrong,” Brower said. “We work from the bottom up to make sure you achieve your goals, starting by determining how much gross profit you need. Then, we work backwards to build you a road map. “Have the right mindset, a positive mindset,” Brower encouraged. “You’re an essential business for a reason. Sanitation and cleanliness are the new norm and aren’t going away;

people are always going to expect this. Remain proactive. Stay on top of things as they change. Make this a daily cadence in your business. “We will get through it. This too shall pass, and when the outbreak is over, you’ll need to hit the ground running.” Rather than cutting marketing, Brower advised shops to adjust marketing, because there is now greater accessibility to a captive audience, essential workers still need reliable transportation to get to work and non-essential workers fear losing transportation for high-priority errands, medical emergencies and the ability to commute to work once they are re-employed. “Adjust your marketing, don’t cut it,” he urged. “We need to stand out in times like this. Build your brand, and make it stronger.” Exploring ways to adjust marketing, Brower suggested offering pickup and drop-off services and goodwill See Beyond COVID, Page 49

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NY Body Shop Owner Forgives Rent for 200 Tenants by Ed Attanasio

A lot of body shop owners end up being landlords, and sometimes it can be a pain in the you-know-what. When you’re trying to fix cars and keep your customers, insurance partners and employees happy, you don’t want to have to worry about late rent or Mrs. Smith’s leaking faucet in apartment 5.

Mario Salerno is a second-generation shop owner whose children, Sal and Mario Jr., will eventually take over the businesses

When this pandemic blindsided many of us, people all over the world started asking about their rent or mortgages.

To placate his tenants and take the high road, Mario Salerno, owner of Salerno Auto Body in the heart of Williamsburg in Brooklyn, NY, waived rent for all 200 tenants living in his 18 properties. When Salerno decided to waive the rents for April, he posted the following message in all of his buildings: “Due to the recent pandemic of coronavirus Covid-19 affecting all of us, please note that I am waiving rent for the month of April, 2020.” The Salerno family has three separate businesses, including a service station, a mechanical repair shop and a body shop. Owned for three generations, Salerno Auto Body opened in 1959, fixing Buicks, Cadillacs and Lincoln Continentals for guys named Nunzio and Carlo. Salerno’s businesses have played an integral role in the neighborhood since Day One, and when Mario retires, his son Sal, 33, will assume the helm. Today, Sal runs the body shop and Mario’s youngest son, Mario

Jr., also works in the business on the mechanical side. A collection of colorful locals often convene at the shop until Mario tells everyone it’s time to get back to work. The neighborhood is calling him “Super Mario” and praising him for a gracious act that changed the lives of more than 200 people. All he asked of his tenants is to pay it forward if possible. “If my tenants can help others because of this, that’s what we are looking for,” he said. “A lot of people have told me about charitable things they’ve done after getting help from us and that always makes me smile.” Salerno is currently tapping into more than his allotted 15 minutes of fame, but he’s not about that. When he sees someone in need, he doesn’t hesitate to help them in any way he can. Salerno’s selfless act led to a big story in The New York Times and an appearance on The Ellen Show. He’s pleasantly surprised by all the hoopla, and a little reluctant to receive the praise and acclaim, according to son Sal.

“My dad does stuff like this all the time and people don’t know about it,” he said. “He went to Texas one time to save 63 puppies from being destroyed. We have a friend who owns a pet shelter and when he told my father about it, he hopped in one

Many of Brooklyn’s most colorful characters stop by Salerno’s to share stories and hang out

of our Sprinter vans and drove 50 hours roundtrip. Some of our tenants now own those dogs, so we get to see them all the time. They call them ‘Mario’s dogs.’ “In addition, we close during the holidays and invite all of the local schools here to celebrate Christmas. We get a Santa and go way over the

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top with decorations and small gifts for the kids.” The body shop portion of the family business repairs 35 to 40 vehicles every month in a hyper-competitive market, where “accident chasers” are a reality. “Here in this area, shops will use their police scanners and then rush over to where the accidents are and try to get the car towed to their shop. We have been around long enough and have a great reputation for being honest,” Salerno said. “So, we don’t have to chase accidents or rely on DRPs for business, because people know who we are and that we’re not just into this for a quick buck.” Although Salerno does not want to disclose how much money he would lose due to not collecting rent in April, the Times estimated he was likely foregoing more than six figures in rental income. “It’s not about the money,” he said. “These are unique times and we need to work together to make it through this. I learned long ago that money isn’t everything. I thank God every day for being in a position where I can do this.”

Continued from Page 44

GM Designates $10M for Inclusion, Racial Justice

Beyond COVID

General Motors announced June 5 it has designated $10 million to support organizations that promote inclusion and racial justice. An initial $1 million will go to the NAACP Legal Defense and Educational Fund. Recipients of additional funding will be determined with input from GM’s Employee Resource Groups (ERGs) and the recently announced GM Inclusion Advisory Board (IAB.) GM’s IAB will consist of leaders from inside and outside the company, with the goal of making GM the most inclusive company in the world. GM Chairman and CEO Mary Barra will chair the IAB. The GM program includes the opportunity for employees to give to organizations, and a corporate matching of those employee contributions. The employee contributions and the GM matching funds are part of the $10 million. Program details will be distributed to employees when finalized. Source: GM

discounts. Notify customers the shop is open, and educate them about the precautions being taken to keep them safe. Shops should determine how many more cars they need to offset the car count deficit, and then reach out to customers through warm calling, email marketing, text messaging and social media. Brower also discussed how using call forwarding during the hours the shop is closed can help obtain a couple extra cars each week. “Your messaging should be sincere and supportive—not pushy or promotional,” Brower noted. “Let people know you’re there but not desperate. Don’t try to force them to come in. People still need their cars. Make sure you’re doing the things you tell them you’ll do to sanitize their vehicles and keep them safe.” When it comes to warm calls, shops should prioritize the most unsafe items first, then the items that will become unsafe over time, ending with repairs that keep the vehicle healthy but aren’t unsafe.

“This helps you refill the pipeline and survive. You miss 100% of the opportunities you don’t take,” Brower said. Text messaging can be used for appointments and other reminders because it’s quick, engaging, affordable and opt-in so customers are agreeing to this form of communication. In fact, most customers prefer text messages, though email can also be an effective marketing tool. According to Brower, effective emails only include useful content, are easy to skim and are concise, though the return rate on texts is higher. Using social media to disseminate pictures and videos of the shop, processes and community outreach creates goodwill. “This is how to build your brand in a time like this,” Brower said. To schedule a phone consultation with ATI, including a free business health check, visit autotraining. net/register

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Dealers See ‘Booming’ Business as Automakers Crank Up Production by Kalea Hall, Breana Noble and Jordyn Grzelewski, The Detroit News

Auto sales are “booming” for dealer Walt Tutak at Matthews-Hargreaves Chevrolet in Royal Oak, MI, after he shut his showroom for eight weeks to help stop the spread of the coronavirus. The dealership reopened May 18, the same week General Motors Co. progressively started to reopen its North American plants. While inventory levels are solid right now, he says, that could change in two or three months since it will take time for auto plants to get back up to their full production levels. “It will take a while for the factories and the suppliers to get momentum going again,” Tutak said. “There could be a shortage in a couple of months. There’s definitely a strong recovery...both in new and used cars.” The auto industry, a major economic driver and jobs machine in the Midwest, is cranking up. It took weeks of developing a restart plan to protect employees while battling potential supply chain interruptions, losing billions in revenue and profit and jumping into action to make medical supplies for the fight against the coronavirus. But Chevrolet Silverados, Rams and Ford F-150s are rolling down assembly lines once again. Their foreign competitors also have restarted lines. Getting threeshift plants back to their normal schedule signifies the demand is returning, and it’s time to start cranking out inventory before competitors seize the chance to steal customers. “They do not want to be in a position to give away sales to their competitors because they don’t have the inventory,” said Jessica Caldwell, executive director of insights for market researcher Edmunds. “That is the worst position to be in especially for the truck market because the margins are so high.” Truck inventory across companies is well below 2019 levels, according to Edmunds. Days supply at the end of May for full-size pickups was at 58.3 days compared to 88.4 in 2019. For mid-size trucks, it was 33.4 days compared to 66.1.

Doug North, president of the North Brothers Ford dealership in Westland, MI, is worried about running out of F-150s and Explorers next month, as demand for trucks and SUVs has remained steady since May: “If we have a good June and July, with regard to Ford stores in southeast Michigan, we’ll be thin on a couple of product lines.”

Sales consultant Jenna Mosser, left, of Brighton, MI, shows used cars to customer Amber Cicalo, of Madison Heights, MI, June 4 at Matthews-Hargreaves Chevrolet in Royal Oak, MI. Credit: Todd McInturf, The Detroit News

GM doesn’t see demand falling this year on the truck side, said Phil Kienle, vice president of GM North America manufacturing and labor relations. In the first quarter, Chevrolet Silverado sales jumped 26% to their highest level in at least the last five quarters, according to Cox Automotive. GMC Sierra sales were up 31%. “We are running where there’s demand for sure,” he told The Detroit News. “The trucks have been

“Obviously, getting all of our plants back as fast soon as possible is what we want to do but not at the detriment of our employees,” Kienle said. “In a perfect world, we would be up day one all three shifts, but that’s just not our reality. I think we brought them back in a controlled fashion and safe fashion as best we could.” Irene Santangelo’s lease expired on her Chevrolet Equinox on May 23. “But because of COVID,” she wasn’t able to look for another car until she came out to Matthews-Hargreaves Chevrolet on June 5. It felt “wonderful,” she said, to be out and about shopping again. “I’ve been frustrated for three months that I couldn’t go out of the house,” said the Madison Heights, MI, resident, who’s weighing another Equinox or a red Blazer. “I love the new Blazer.” Last week when showrooms opened, there was an increased level of comfort among customers, said Adam Thayer, general manager of Ralph Thayer Automotive in Livonia, MI, which owns dealerships for Volkswagen AG, Mazda Motor Corp. and Hyundai Motor Co. “The end of the month turned out really well, so we’re really excited for June,” said Thayer, adding that May sales were about 35% of

“It will take a while for the factories and the suppliers to get momentum going again,” — Walt Tutak strong all year and continue to be strong, so we definitely want to supply that demand.” There have been hiccups as auto plants restarted and implemented extensive―and unprecedented―protocols to guard against COVID-19 infection. Some plants had to be shut down for cleaning when cases were caught. GM had to delay the addition of shifts at truck plants because some of its Mexico-based suppliers weren’t yet up and running. Step one in the restart has been ensuring that workers feel safe in the plants, that they follow strict health and safety guidelines, and then making sure the supply base can accelerate production in tune with the automakers.

the normal level, which was up from 8% in April. He thinks business in June could be up to 90% of what is typical. Customers seem to be coming for various reasons―not just because accidents had totaled their vehicles or their leases had expired. But inventory still remains high with a healthy mix for his dealerships, Thayer said. Ample inventories, however, depend on the automaker, said Jim Walen, owner of dealerships for Hyundai and Chrysler, Dodge, Jeep and Ram in Seattle. He told “a tale of two franchises.” “We were very aggressive to take inventory” with Hyundai, he said. “We’re stocked in order to sell over the next few months.”

That’s not so much the case with Fiat Chrysler vehicles. Walen estimates he only has up to a 90-day supply of vehicles, with the automaker telling dealers last week that production ramp-up is facing challenges from suppliers. “We can’t be super picky on the vehicles and how we want them configured,” he said. “It’s ‘take-whatwe-can-get’ kind of thing. Hot sellers are going to be in short supply.” In Washington, Walen’s dealerships were able to open May 5 with limits. Business was down only about 20% for the month from the typical 275 vehicles he sells. Fully online sales represented about 20% of those sales. Yet he still thinks the virus outbreak, protests continuing in the city and companies laying off and furloughing workers is affecting business even as he sees the results of pent-up demand. “There’s a lot of buyers that just aren’t out there,” he said. “They’re not working, so they’re not changing into a different car. That’s a good chunk of people who don’t qualify for loans because they’re unemployed and are collecting unemployment checks.” The companies had rolled out generous incentives to attract customers. They are starting to roll those back, dealers say. “This is my opinion: Manufacturers had a knee-jerk reaction and tried to move as much as possible,” Walen said. “Hyundai and Chrysler were offering 0% for 84 months. Now it’s 0% for 72. Personally, I think that works. Eighty-four months is too long to pay off a car, but incentives are staying and staying competitive.” Restarting the Blue Oval has not been without some hiccups. Ford Motor Co. has temporarily stopped production at a handful of plants and assembly lines because employees tested positive for the virus. Ford took that approach in part because the employees worked in areas where they had contact with other workers, said Gary Johnson, Ford’s chief manufacturing and labor affairs officer. And, as Bloomberg reported last week, the automaker is facing criticism from local unions in Dearborn,

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MI, and Kansas City that the company isn’t doing enough to protect workers. The automaker also ran into some supply-chain issues due to COVID-19 cases at two component suppliers, Johnson said, “briefly” affecting production at plants in Dearborn and Chicago. All four of Ford’s complexes in Mexico are now online. Within the coming weeks, those plants are expected to ramp up to full capacity. Capacity is being added at U.S. plants, too, including at those building profit-rich products such as pickups. The Louisville Assembly Plant, where the Ford Escape and Lincoln Corsair SUVs are produced, now is running on two shifts. The automaker’s operations in Kansas City are back to two shifts, too. “Over the next few weeks as we stabilize and see the demand and see what comes out of Mexico, we’ll add third shifts or additional overtime if it’s a two-plant operation,” Johnson said. “As we look at our schedule, we want to make sure the Mexico supply base is stable.” Scott Garberding, Fiat Chrys-

ler Automobiles NV’s global chief manufacturing officer, has been in the auto industry for 27 years. He was working for Chrysler during the 2009 bankruptcy as the head of purchasing, and he remembers “a lot of work” was required to put the supply base back together. “But we didn’t have to then think through how to build cars in a totally different environment,” he said. “In this new environment, there’s been

“Obviously, getting all of our plants back as fast soon as possible is what we want to do but not at the detriment of our employees,” — Phil Kienle a tremendous amount of interaction with medical professionals, with the government and a lot of interaction with” the United Auto Workers. All of the communication is centered on one goal: putting measures in place to keep people in the plants safe, to prevent any spread and to continue production without compromising the health and safety of hourly and salaried employees alike. “For all of us, it’s completely un-

Honda Suffering Production Issues Due to Possible Cyber Attack by Sergiu Tudose, CarScoops

Honda is having to deal with a global computer network disruption, which led to the carmaker cutting some production in North America. The issue could actually be part of a deliberate cyber attack, stated the carmaker’s U.S. sales arm, American Honda Motor Co. Unfortunately, no further details were offered regarding which production plants have cut output, or what other operations might be affected, reports Autonews. While the disruption is still under investigation, the Japanese company has yet to rule out the possibility of this being a direct attack on its computer network. “On Sunday, June 7, Honda experienced a disruption in its computer network that has caused a loss of connectivity, thus impacting our business operations. Our information technology team is working quickly to assess the situation,” said the carmaker in an official statement.

precedented,” Garberding said. “I was in one of the plants recently and I said: ‘Look, three months ago, none of us would have ever imagined we would be here wearing surgical masks.’” All three of Detroit’s automakers have implemented stringent health and safety protocols, which they developed with one another and the UAW. There have been numerous reports of the protocols catching employees who may have been exposed to the virus or

According to British outlet Sky News, these computer issues are also affecting Honda’s networks in Japan as well as Europe and as of June 8 it was unclear whether or not the company was the victim of ransomware―meaning hackers would have had to break into the system and hold Honda hostage until a sum of money was paid. There is precedent for this. In 2017, Honda was a target of the global ransomware attack WannaCry, which affected production at a Japanese assembly plant. That same attack also affected Renault and Nissan’s operations in Japan, Europe and India. Other brands impacted included Dacia, Boeing, Petrobras, O2 and loads more, including several universities. We thank CarScoops for reprint permission.

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who are experiencing symptoms, and either preventing them from coming into plants or sending them home. The incidents, in some cases, have led to temporary line shutdowns so the automakers can disinfect work areas. GM, Ford and FCA all have systems in place to refer employees who may be infected for testing but do not have the capacity to test everyone. “Ultimately, the UAW would like to see robust increased testing as

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it becomes available and a medical antidote to this deadly disease,” UAW spokesman Brian Rothenberg said in a statement. “Until then, we continue to push for enhancements and adherence to the best protocols that are available in real time.” John Barbosa, a 49-year-old block machining line team leader at Fiat Chrysler’s Dundee (MI) Engine plant, says plant managers responded to some workers’ safety concerns when they came back during a pandemic. For example, the workers now receive their masks before entering the plant foyer, where there is less ventilation to turn in a screening questionnaire. “They are affording ample time to clean their stations, for handwashing and sanitizing,” Barbosa said. But the masks can make the job more difficult, he said: “They hinder your performance a little on the job. Your [safety] glasses fog up, then you can’t see. The warmer it gets in the plant, the worse it is going to get.” We thank The Detroit News for reprint permission.

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CIC Goes Virtual for July Conference

Bipartisan PPP Flexibility Act Sails Through Senate A bipartisan bill that would give small business more time to use the funds from Paycheck Protection Program, as well as other updates to the program, was passed by the Senate in a unanimous voice vote the evening of June 3. The Paycheck Protection Program Flexibility Act, sponsored by U.S. Rep. Chip Roy (R-TX) and U.S. Rep. Dean Phillips (D-MN), had previously been passed by the House of Representatives in a 417-1 vote. It now heads to the White House, where President Donald Trump is expected to sign it into law. The bill addresses concerns with the Small Business Administration’s forgivable PPP loans, which require businesses to use the money within eight weeks of receiving it to be eligible for full forgiveness. Because many businesses were shut down for months by government orders, they didn’t have the time to do what was necessary to have their loans forgiven in that short span. Roy and Phillips said the PPP Flexibility Act is intended to make it more feasible for businesses to qual-

ify for forgiveness. In addition to extending the time in which the loan funds must be used to qualify for full forgiveness from eight weeks to 24 weeks― through Dec. 31―it would also reduce the percentage of PPP funds required to be used from 75% to 60%.

“NIADA is proud and encouraged to see members of both parties in Congress come together and act quickly to solve this problem,” said Steve Jordan, CEO of the National Independent Automobile Dealers Association.

“This bill provides much-needed flexibility to NIADA members and small businesses across the nation as they reopen and rehire staff,” Jordan said. “Economic recovery from a crisis like COVID-19 takes time, and this gives independent dealers the time they need to get their operations back up to full .” Other provisions include eliminating the restriction limiting loan terms to two years, allowing businesses that receive PPP loans to also defer payroll taxes and extending the deadline to rehire employees from June 30 to Dec. 31 to account for the effect of federally enhanced unemployment benefits. The deadline for to receive a PPP loan remains June 30. The PPP, created by the CARES Act in late March, allotted $349 billion in funding for forgivable loans of up to $10 million per borrower to help small businesses weather the COVID-19 crisis. After those funds were distributed in less than two weeks, Congress approved an additional $310 billion on April 21.

In the face of continued restrictions for gathering, the Collision Industry Conference (CIC) will be held as a virtual meeting for the first time in its history. CIC will be held July 22 and July 23 from 11 a.m. to 3 p.m. Eastern Time via Zoom, pre-registration required. As with the live CIC, several committees will make presentations and attendees will have the opportunity to raise their hand and speak during Q&A and open mic times. Organizer Jeff Hendler believes this platform will also give those who have been curious about CIC―or even too busy― the opportunity to experience the unique meeting without the added cost and hassle of traveling. CIC committees have been hard at work throughout the crisis, and plan to bring that work to the industry stage in July. To learn more, visit the schedule page at www.ciclink.com /schedule/ Source: CIC

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Volkswagen Activates ‘Sign Anywhere’ Across Network Volkswagen of America and VW Credit, Inc. announced the availability of remote digital signatures across the Volkswagen dealer network to offer customers and dealers flexibility during the pandemic. Sign Anywhere is remote, digital signature tool powered by CDK Global that allows customers to remotely and securely digitally sign financial documents with their own computer or mobile device without stepping foot in a showroom― providing an online automotive buying experience. While digital signature technology has been in widespread use for some time, it has taken time to adopt this technology to meet the requirements found in the financial services space. Volkswagen is among the first to offer Sign Anywhere at its dealerships through its financial services arm VCI. Source: Volkswagen

Tesla Shares Cross $1,000 as Semi Truck, New Battery Tech Take Focus by Joey Klender, Teslarati

Shares of Tesla opened June 10 at new highs, crossing $1,000 per share as investors weighed in on rumors of the Tesla Semi’s initial production push. An email from Elon Musk circulated early that morning, indicating Tesla’s focus would be to get the Semi to “volume production.” “It’s time to go all out and bring the Tesla Semi to volume production,” Musk said. “It’s been in limited production so far, which has allowed us to improve many aspects of the design.” Musk indicated in the Q1 2020 Earnings Call Update Letter the Semi would not begin deliveries until 2021. In early January, Tesla’s Truck Team contacted Semi pre-order holders indicating a limited production push would take place in the second half of 2020. The Semi was unveiled in November 2017 and Tesla has been assessing its performance since then. Recently, the commercial vehicle was subjected to cold-weather test-

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“We believe with demand for Model 3’s ramping stronger than expectations in China heading into summer timeframe…that Tesla’s stock likely has room to run further,” Ives said in a note to investors. “While the stock has been roaring higher, we believe the main fundamental catalyst continues to be the massive China market which is showing clear signs of a spike in demand for Musk & Co. heading into the rest of this year,” he added.

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Ives also attributed battery developments that could be potentially “game-changing” for Tesla as another reason for his price target increase. Indicating Tesla’s upcoming “Battery Day” would occur in late June, the company’s Chinese battery supply firm CATL, recently released details on its own million-mile battery assembly. Tesla and CATL signed a two-year contract in early 2020 that pairs the two companies in a partnership from June 2020 to July 2022. In the U.S., speculation continues to indicate Tesla will unveil its own million-mile battery pack that will increase the life span of its electric vehicles by a considerable margin based on current warranty documents. TSLA stock closed at $940.67 on June 9 and is currently trading at $998.25 at the time of writing.

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56 JULY 2020 AUTOBODY NEWS / autobodynews.com

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