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Blackstone to Acquire Majority Stake in Service King Global investment firm Blackstone Group has agreed to buy a majority stake in Service King Collision Repair Centers from Carlyle Group, according to a July 23 news release from Blackstone. Financial terms were not disclosed, but the Wall Street Journal reported that the deal values Service King at about $650 million, citing a source close to the matter. Carlyle, which acquired majority stake in Service King in August 2012, will retain a minority stake in the company, as will the repair chain’s management, according to the release. Under Carlyle, Service King has ex-
panded aggressively, growing from less than 50 shops in Texas to 177 facilities in 20 states. In June, the company acquired 62 Sterling Collision Centers. “In a fragmented industry, Service King has grown tremendously and Carlyle is proud to have supported their achievements,” said Shary Moalemzadeh, Carlyle managing director and co-head of Carlyle Strategic Partners. “We will continue to support Service King’s business and growth strategy and we are pleased with the successes we have achieved together thus far during Carlyle’s in-
The owner of 1st Class Collision in Phoenix was found guilty of forgery and insurance fraud after instructing employees to intentionally damage vehicles in his shop to collect morelucrative insurance payments, the Arizona Department of Insurance told the Arizona Republic. Michael Griesa was sentenced to one year of probation, fined $813 and ordered to pay $1,910 in restitution after pleading guilty to insurance fraud and forgery earlier this month in Maricopa County Superior Court. Former employees complained that Griesa instructed them to damage vehicles already in the shop for re-
pairs so he could file more-lucrative claims with insurers, the Department of Insurance said. Those ex-employees alerted Progressive Insurance about the activity, which they said occurred from October 2010 through April 2012. The insurer complained to the Department of Insurance, which conducted an undercover investigation. One former employee provided before and after photos that showed damage to a vehicle while at the Cave Creek Road body shop. Griesa’s attorney, Kevin Breger, did not immediately return a message
See Service King, Page 9
AZ Shop Owner Pleads Guilty to Forgery and Insurance Fraud, Fined $813
See AZ Shop Owner, Page 25
VOL. 32 ISSUE 8 AUGUST 2014
Windshield Replacement Scam Hits Utah, Insurance Department Warns Consumers When faced with the need to replace a windshield, many car owners look for the least expensive option. But in a scam that’s hitting Utah, crooks present a nearly irresistible option: replace it for free. “You don’t need to do anything, just give us your personal information, give us your insurance information and your date of birth and those types of things,” said Armand Glick, director of the Utah Insurance Department’s fraud division. The division recently investigated six people who were arrested after going door-to-door with offers of windshield replacement. “Initially, those windshields were actually repaired,” he said. “But the sales agent called up the insurance company and impersonated the pol-
icy-holder.” It’s not just a one-time deal, Glick said. Once they have insurance info, a scammer will keep submitting false claim after false claim, getting money from the policy without the policy-holder even knowing it. Troy Mason owns and operates 20 TechnaGlass auto glass shops in Utah. “Any claim against your insurance is going to have some impact,” he warns consumers. He said not only does this scam jack up insurance premiums, it also puts personal safety at risk. A poorly installed windshield could pop out in an accident. Glick said the best way to protect yourself, other than avoiding door-to-door sales pitches, is to contact your insurance agent and
The owner of an auto body shop in Indio has been arrested for insurance fraud after an investigation revealed 16 false insurance claims totaling $314,000 in losses to seven different auto insurance companies. Joel Saldana Paredes, 22, owns Lightning Auto Body and police said he organized the scheme. He was among 13 people arrested as of June, 25. The California Department of Insurance first heard about the possible fraudulent activity in early 2013, launching an investigation. Investigators said Paredes reportedly recruited some friends and family members to pose as insured customers, and for as little as $500, file claims for traffic accidents that were either staged or never happened at all. Authorities said these 16 ‘phantom’ accidents were all reported in the Coachella Valley.
Paredes has been charged with 16 felony counts of insurance fraud. The other defendants who were arrested have also been charged with various crimes by the Riverside County District Attorney’s Office. Authorities said Paredes’ auto body shop stopped doing business earlier this year. Investigators with the DA’s office, the state Department of Insurance, and deputies with the Riverside County Sheriff’s Department were all involved in the June 25 sweep. The investigation found that Saldana recruited some friends and family members to pose as insured customers and, for as little as a $500 bounty, file claims for traffic accidents that were either staged or never happened at all —known as “phantom” accidents, according to Hall. All of the staged or phantom accidents were reported in the Coachella Valley.
See UT Windshield Scam, Page 9
Indio, CA, Shop Owner Among 13 Arrested for Insurance Fraud, Investigators Claim Losses of $314K
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2 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
COLUMNS Attanasio - Is Your Shop Afflicted by Phonitis? Call the Telephone Doctor! . . . . . . . . . . . . . 32 Driscoll-Chippendale - What Does the First-Ever Extradition on an Antitrust Charge Mean for the Auto Parts Investigation? . . . . . . . . . . . 42 Franklin - Using Emotional Intelligence to Close Sales . . . . . . . . . . . . . . . . . . . . . . . . 30 Luehr - The Wrong Bonus Plan Can Be Much Worse than None at All . . . . . . . . . . . 36 Sisk - How to Write an Authorization to Repair and Repair Contract—Documentation Part 1 . 26 Yoswick - How Average Labor Rates Have Kept Up With Inflation Varies by Market. . . . 34 Yoswick - Slippery Labor Rates, Cost Shifting, Benchmarks, Sterling Autobody . . . . . . . . . 44 NATIONAL ABAT Hosts Inaugural Meeting with More than 80 in Attendance. . . . . . . . . . . . . . . . . 60 ABRA Acquires 12 True Quality Collision Centers . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Allstate Argues for Multidistrict Consolidation in Antitrust and RICO Cases Filed in Five States, Supports Illinois or Florida Venues, Opposes Mississippi or Louisiana Venues. . 20 Amendment Proposed Ensures Auto Glass Companies Are Covering by New York Anti-Steering Law. . . . . . . . . . . . . . . . . . . . 16 An Interview with Georgia Attorney Gene Brooks on Short Pays . . . . . . . . . . . . . . . . . . . . . . 54 ARA Announces Keynote Speakers for 71st Annual Convention and Exposition in Nashville, TN . . . . . . . . . . . . . . . . . . . . . . . 22 ASA Leadership Takes MFN Clause to Capitol Hill . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Blackstone to Acquire Majority Stake in Service King. . . . . . . . . . . . . . . . . . . . . . . . . 1 Caliber Collision Centers Opens Two New Texas Locations in Frisco and Wylie . . . . . . 59 Caliber Collision Food Drive Nets Over One Million Meals. . . . . . . . . . . . . . . . . . . . 57 CAPA Joins IIHS on Bumpers . . . . . . . . . . . . 10 CARSTAR Held 2014 Puerto Rico Conference in June . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 CCC Information Services Introduces Carwise™ . . 6 Collision Repair Students Receive Sustainability Challenge Grant from AkzoNobel. . . . . . . . . 57 Consumer Groups Seek CarMax Probe
Over ‘Deceptive’ Ads . . . . . . . . . . . . . . . . . . 6 Court Grants Chrysler’s Motion to Dismiss Sunroof Allegations in Part, Denies in Part . 22 Eight NJ Dealerships Settle $1.8M Deceptive Sales Charge . . . . . . . . . . . . . . . . . . . . . . . 16 Fentonville, PA, Food Truck Explodes, Propane Blamed . . . . . . . . . . . . . . . . . . . . . 52 Florida Repairers Re-File Multi-Lawsuit Against 39 Insurers, Previously Filed Complaint Dismissed . . . . . . . . . . . . . . . . . 14 Four Generations Make Miller Auto Body the Oldest Shop in Utah . . . . . . . . . . . . . . . 24 GA Court Orders State Farm to Pay Over $40K for Breach of Contract in Short Pay Case . . 18 Group 1 Acquires Houston’s Mundy Chevrolet and Mazda . . . . . . . . . . . . . . . . . . . . . . . . 10 HABA to Host Business-Building Events in Spring and Houston on August 5 . . . . . . . . 60 Hertz is Serving CARSTAR Locations in IL and FL . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Honda Releases Video Showing Slower Response on Airbag Deployment with Aftermarket Bumpers . . . . . . . . . . . . . . . . . 48 Hyundai Motor America Launches Go Genuine Collision Conquest Program for Dealers . . . . 4 Independence Day Storm Tears Roof off Body Shop in Methuen, MA . . . . . . . . . . . . 16 LaCIA’s July 8th Meeting Highlights . . . . . . . . 17 LKQ Has Donated $114K in Parts to Foundation Schools . . . . . . . . . . . . . . . . . . 10 Louisiana Legislature Enacts Bill to Curb Air Bag Fraud, Fines and Imprisonment Both Authorized . . . . . . . . . . . . . . . . . . . . . 61 Mitchell’s New Dispatch Tools for Workcenter™ . 10 National Autobody Parts Warehouse’s CSI Ratings . . . . . . . . . . . . . . . . . . . . . . . . 33 PA Jury Orders Honda to Pay $55.3M Rollover Claim . . . . . . . . . . . . . . . . . . . . . . 52 Police Freeze Alleged Body Shop Radiator Thief . 52 Power Coating Institute Sets Up Industry-Related Scholarships . . . . . . . . . . . . . . . . . . . . . . . 49 Pro Spot Announces Aluminum Welders, Wire and Training Upcoming at NACE/CARS . . . 62 Pro-Spray Launches New AmTech® Coatings Lineup, “Performance & Profitability Boost” . 53 RDA Adds Central Paint as New Member . . . . 10 Shop Filing RICO Case Against Insurers Wants to be Excluded from Multidistrict Antitrust Litigation . . . . . . . . . . . . . . . . . . . 21 Sisk - ARA Holds ‘Hill Days’ to Discuss Industry Concerns with Congress . . . . . . . . 40 Sisk - HABA’s Focus: Re-imaging Collision Repair in Texas . . . . . . . . . . . . . . . . . . . . . . 58 Sisk - Plans Underway for 7th Annual Pro Paint Trade Show . . . . . . . . . . . . . . . . . 56 Sisk - TIAA Fishing Tournament Held in Corpus Christi . . . . . . . . . . . . . . . . . . . . . . 50 Snake Disrupts Operations at Rosebank, NY, Shop . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Steve Plier Provides an Update on ALARISE . . 18 SUV Thefts are on the Decline but CUV Thefts are Rising . . . . . . . . . . . . . . . . . . . . . 6 Takata Airbag Recall Widens. . . . . . . . . . . . . . . 3 Top Carriers and Collision Repairers Use Estimating Systems and Alternative Parts Programs to Reduce Cost . . . . . . . . . 48 U.S. Senate Commerce Chair Proposes Auto Safety Bill, Increases Highway Safety Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Valspar Automotive Introduces Advanced Paint Technology for OEM Color Matching . . . . . . 22 WV Supreme Court Rules on Aftermarket v Recycled Parts . . . . . . . . . . . . . . . . . . . . 10
Indexof Advertisers
REGIONAL Attanasio - How UABA President Cory Stanger Sees the Industry . . . . . . . . . . . . . . . . . . . . 46 AZ Shop Owner Pleads Guilty to Forgery and Insurance Fraud, Fined $813 . . . . . . . . . 1 Caliber Acquires South El Monte, CA, Collision Center . . . . . . . . . . . . . . . . . . . . . . 9 California's Ted Gaines fights for Tesla factory on trip to Texas . . . . . . . . . . . . . . . . . 4 Honda Expands Airbag Recall To Include CA . . . 3 Indio, CA, Shop Owner Among 13 Arrested for Insurance Fraud, Investigators Claim Losses of $314K . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Matrix to Host Ryan Evans from Counting Cars . 18 Memorial Service Held for Owner of DJS Fabrications . . . . . . . . . . . . . . . . . . . . . . . . . 8 New California Minimum Wage Took Effect July 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Sacto Shop Owner Sentenced to 180 Days, $16K Restitution. . . . . . . . . . . . . . . . . . . . . . 8 Sentencing Update on CA Glass Harvesting Ring. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Windshield Replacement Scam Hits Utah, Insurance Department Warns Consumers. . . 1
The recall storm embroiling Takata Corp.’s airbags widened with Honda Motor Co., Nissan Motor Corp. and Mazda Motor Corp. calling back nearly 3 million vehicles to fix possibly defective inflator propellant made in North America. Honda recalled 2.03 million vehicles worldwide, including 1.02 million in North America, 153,943 in Europe and 668,582 in Japan. The vehicles were manufactured between April 2000 and October 2002. In North America, they cover the Civic, CR-V, Odyssey and Element. In Europe, affected models are the Civic, Stream, Fit/Jazz and CR-V. Mazda called back 159,807 vehicles worldwide, including 14,794 in North America, 90,259 in Europe and 11,832. That recall covers the RX-8 and first-generation Mazda 6. Nissan’s recall affects 755,000 units worldwide. The total includes 228,000 vehicles in North America, including the Infiniti FX35, Pathfinder and Cube, and 128,000 nameplates in Japan, including the X-Trail and Teanna. Nissan did not provide a European breakout. Separately, Honda, Toyota, Nissan, Mazda, Ford, Chrysler and BMW said they are conducting regional recalls in the United States.
Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: Tom Franklin, David Brown, John Yoswick, Janet Chaney, Toby Chess, Ed Attanasio, Chasidy Sisk, David Luehr Advertising Sales: Joe Momber, Sean Hartman, Bill Doyle, David Petro (800) 699-8251 Sales Assistant: Louise Tedesco Art Director: Rodolfo Garcia Serving California, Nevada, Arizona and Utah. Autobody
AAPEX Trade Show . . . . . . . . . . . . . . . .24 Audi Wholesale Parts Dealers . . . . . . . .58 Automotive ID . . . . . . . . . . . . . . . . . . . .16 AutoNation Chrysler-Dodge-JeepRam-FIAT . . . . . . . . . . . . . . . . . . . . . .14 AutoNation Chrysler-Jeep-DodgeRam of North Phoenix . . . . . . . . . . . .25 Axalta Coating Systems . . . . . . . . . . . . . .5 Bill Luke Dealerships . . . . . . . . . . . . . . .11 BlackWow . . . . . . . . . . . . . . . . . . . . . . .10 BMW MINI of Escondido . . . . . . . . . . . .21 BMW Wholesale Parts Dealers . . . . . . .51 Bob Smith BMW . . . . . . . . . . . . . . . . . .41 Bob Smith MINI . . . . . . . . . . . . . . . . . . .41 Capitol Subaru . . . . . . . . . . . . . . . . . . . .64 Cerritos Dodge-Chrysler-Jeep-Ram . . .17 Certified Automotive Parts Association (CAPA) . . . . . . . . . . . . . .35 Classifieds . . . . . . . . . . . . . . . . . . . . . . .62 Colortone Automotive Paints . . . . . . . . . .9 DCH Chrysler-Jeep-Dodge-Ram . . . . . . .8 DCH Kia of Temecula . . . . . . . . . . . . . . . .8 Del Grande Dealer Group . . . . . . . . .12-13 Downtown Motors of LA (Audi, VW, Porsche) . . . . . . . . . . . . . .39 Drew Hyundai . . . . . . . . . . . . . . . . . . . .37 East Bay BMW-MINI . . . . . . . . . . . . . . . .36 Eco Repair Systems of North America, LLC .6 Elk Grove Toyota . . . . . . . . . . . . . . . . . .48 Enterprise Rent-A-Car . . . . . . . . . . . . . .52 Equalizer Industries, Inc. . . . . . . . . . . . .14 Ford Wholesale Parts Dealers AZ, CA, NV & UT . . . . . . . . . . . . . . . .43 Galpin Motors . . . . . . . . . . . . . . . . . . . .20 Glenn E. Thomas Dodge-ChryslerJeep . . . . . . . . . . . . . . . . . . . . . . . . . .19 GM Wholesale Parts Dealers . . . . . . . . .61
Honda Expands Airbag Recall To Include California
Honda Motor Co. is expanding to the state of California a U.S. regional recall of vehicles over potentially explosive airbags made by Takata Corp., the automaker said, after a complaint that said a driver was injured in an accident in the state. The regional recall involving the potentially faulty airbags has now expanded beyond hot and humid southern states and into the nation’s most populous state and a major market for automakers. Honda decided to expand the recall after it was told on June 25 about an accident involving a 2005 model Accord that had taken place in California in May, a spokeswoman said. According to a complaint filed to U.S. safety regulator the National Highway Traffic Safety Administration, the airbag in the car shot out “hot metal and plastic shrapnel” after a collision that happened at low speed, leaving the driver with “severe burns, bruises and abrasions on her arms and legs.” It was not immediately clear how many vehicles would be recalled in California. In the regional recall, Honda is pulling back certain vehicles including model years 2001-2007 Accord, 2001-2005 Civic and 2002-2006 CR-V. News is a monthly publication for the autobody industry. Permission to reproduce in any form the material published in Autobody News must be obtained in writing from the publisher. ©2014 Adamantine Media LLC. Autobody News P.O. Box 1516, Carlsbad, CA 92018 (800) 699-8251 (760) 603-3229 Fax www.autobodynews.com Email: news@autobodynews.com
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Contents
Takata Airbag Recall Widens
Honda-Acura Wholesale Parts Dealers . . . . . . . . . . . . . . . . . . . . .28-29 Hyundai Motor America . . . . . . . . . . . . . .2 Hyundai Wholesale Parts Dealers . . . . .46 Innovative Tools & Technology, Inc. . . .33 Kearny Mesa Subaru-Hyundai . . . . . . .44 Kia Motors Wholesale Parts Dealers . . .47 LKQ . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 Los Gatos Luxury Cars . . . . . . . . . . . . .32 Maita Subaru . . . . . . . . . . . . . . . . . . . . .38 Malco . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Mark Kia-Mitsubishi . . . . . . . . . . . . . . . .30 Matrix System Automotive Finishes . . . .7 Mazda Wholesale Parts Dealers . . . . . .60 Mercedes-Benz . . . . . . . . . . . . . . . . . . .27 MINI Wholesale Parts Dealers . . . . . . . .50 Minute Man Wheel Lifts . . . . . . . . . . . . .22 Mitsubishi Wholesale Parts Dealers . . .52 MOPAR Wholesale Parts Dealers . . . . .31 Mossy BMW of Vista . . . . . . . . . . . . . . .45 Nissan/Infiniti Wholesale Parts Dealers . .57 Pro-Spray . . . . . . . . . . . . . . . . . . . . . . . .23 Puente Hills Subaru . . . . . . . . . . . . . . . . .4 Rare Parts, Inc. . . . . . . . . . . . . . . . . . . . .18 Replica Plastics . . . . . . . . . . . . . . . . . . .48 Riverside Metro VW-Honda-HyundaiNissan-Mazda . . . . . . . . . . . . . . . . . .49 Shingle Springs Nissan-Subaru . . . . . .40 Sierra Chevrolet-Honda-Mazda-Subaru .53 Sonnen BMW . . . . . . . . . . . . . . . . . . . . .34 South Bay Volkswagen . . . . . . . . . . . . .42 Subaru Wholesale Parts Dealers . . . . . .55 Toyota Wholesale Parts Dealers . . . . . .56 Valspar Automotive . . . . . . . . . . . . . . . .15 Volkswagen Wholesale Parts Dealers . .59 Volvo Wholesale Parts Dealers . . . . . . .54 Weatherford BMW . . . . . . . . . . . . . . . . .26
www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 3
Hyundai Motor America Launches Go Genuine Collision Conquest Program for Dealers ● Hyundai Motor America is launching the Hyundai Go Genuine Collision Conquest program to encourage repair facilities to buy more Hyundai Genuine Parts. ● Hyundai Genuine Parts are manufactured to exacting engineering specifications for a precise fit without modifications, ensuring quick and proper installation. ● Hyundai Genuine Parts are installed on Hyundai vehicles when they are tested to ensure they meet the U.S. government’s collision safety and crash protection standards. ● Aftermarket parts may not meet required specifications increasing installation time. ● Hyundai Motor America encourages the use of OEM (Original Equipment Manufacturer) parts on all Hyundai vehicle repairs. ● Use of imitation, aftermarket, alternative or other non-original equipment Hyundai parts for the repair of any collision damaged vehicle may negatively affect vehicle crashworthiness and occupant safety during a collision and is not recommended by Hyundai Motor America.
Hyundai Motor America launched its Hyundai Go Genuine Collision Conquest program. The Hyundai program provides reimbursement to Hyundai dealers, allowing them to competi-
tively price their Hyundai Genuine Parts against alternative, non-Hyundai parts. Competitive prices help collision repair facilities purchase more Hyundai Genuine Parts as opposed to alternative, non-Hyundai parts. Using Hyundai Genuine replacement parts during the collision repair process provides confidence that the parts will perform as designed and engineered by Hyundai. The program is launching with five commonly required collision parts including hoods, fenders, bumper covers, head lamps and tail lamps. These parts and the reimbursement associated with them are available for all Hyundai vehicles, regardless of age, for all participating dealers. Additional parts may be added to the program at a later date. The program is open to all Hyundai dealers. “A program that encourages dealer-owned and independent repair shops to purchase Hyundai Genuine Parts from their local Hyundai dealer has so many benefits,” said Frank Ferrara, executive vice president, customer satisfaction, Hyundai Motor America. “Hyundai owners benefit through the assurance that approved factory parts can be used in their repairs, shop owners know they are getting quality parts at a great price, while dealers benefit through increased parts sales.”
California's Ted Gaines fights for Tesla factory on trip to Texas The turf war with Texas over one of California’s glitziest businesses continued Monday as Republican state Sen. Ted Gaines tried to fend off the Lone Star State’s efforts to recruit Tesla to build a factory there. His shtick? Appearing in front of the state Capitol in Austin with a cardboard cut-out of the luxury electric car.
“A few weeks ago, Governor (Rick) Perry drove up to our Capitol in a Tesla. I was planning to do the same thing here in the spirit of healthy competition but it was impossible to even get a Tesla in Texas,” Gaines said in a statement. “That’s not the case in California. They are already everywhere. I look forward to their expansion in my
state and seeing them driven all over the country soon.” Gaines, a Republican from Roseville, and Senate leader Darrell Steinberg, D-Sacramento, are carrying legislation to try to lure Tesla to build its factory in California, arguing that the plant would create 6,500 new jobs. Senate Bill 1309 declares the Legislature’s intent to “utilize financial incentives, changes to regulatory and environmental processes, and other possible tools to expedite construction in California,” according to Gaines’ statement. Gaines, who is challenging Democratic Insurance Commissioner Dave Jones in the Nov. 4 election, has been posting updates from his trip to Austin on Twitter. One picture showed him surrounded by Texas news media, and a “selfie” in front of the lush grounds at the Texas Capitol noted, “they even water their lawn!” The grass outside California’s Capitol, by contrast, is looking pretty yellow these days with watering cut back due to the drought. Read more here: http://blogs.sacbee.com/capitolalertlatest/2014/06/california-senatorfights-for-tesla-factory-on-trip-to-texa s.html#storylink=cpy
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Hyundai has teamed up with Overall Parts Solutions (OPS), a Texas based company, to allow dealers and repair facilities to work together using the OPSTRAX and VALUTRAX tools in a unique, streamlined interface. Using the OPSTRAX and VALUTRAX tools, dealers and repair facilities are able to see all the parts on a collision repair estimate including the conquest pricing for program parts. Using the program and tools, dealerships and body shops can act immediately on these opportunities. “OPS is excited about the opportunity to team up with Hyundai Motor America,” said Nick Bossinakis, founder and chief executive officer, OPS. “OPS’ vision has always been to provide collision shops and parts suppliers alike with tools that would positively impact their businesses as well as create innovation and ease of use within our industry.” OPS has been involved with parts procurement and supply chain management in the industry for nearly two decades. Currently, OPS technologies are utilized throughout North America with the top Multi-Shop Operators (MSO), independent repair facilities, and dealer groups. OPS was the first in the industry committed to providing a single platform for all parts types. OPS prides itself in producing robust and
meaningful solutions for the collision repair industry. Hyundai Motor America, headquartered in Fountain Valley, Calif., is a subsidiary of Hyundai Motor Co. of Korea. Hyundai vehicles are distributed throughout the United States by Hyundai Motor America and are sold and serviced through more than 820 dealerships nationwide. All Hyundai vehicles sold in the U.S. are covered by the Hyundai Assurance program, which includes the 5-year/60,000-mile fully transferable new vehicle limited warranty, Hyundai’s 10-year/100,000mile powertrain limited warranty and five years of complimentary Roadside Assistance. Hyundai Blue Link Connected Care provides owners of Hyundai models equipped with the Blue Link telematics system with proactive safety and car care services complimentary for one year with enrollment. These services include Automatic Collision Notification, Enhanced Roadside Assistance, Vehicle Diagnostic Alert, Monthly Vehicle Health Report and in-vehicle service scheduling. For more details on Hyundai Assurance, please visit www.HyundaiAssurance.com. Visit Hyundai’s media website at www.hyundainews.com and blog at www.hyundailikesunday.com.
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www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 5
Consumer Groups Seek CarMax Probe Over ‘Deceptive’ Ads
Car-safety groups and a U.S. senator asked the Federal Trade Commission on June 24 to investigate CarMax Inc., the biggest seller of used cars nationally, for deceptive advertising claims. In a petition filed with the FTC, the groups allege that CarMax engages in deceptive advertising by claiming every vehicle it sells passes a rigorous 125-point inspection. The groups said the inspection fails to examine and disclose whether a car has been recalled and repaired. The petition also seeks to block CarMax sales of unrepaired recalled cars. CarMax, however, said that used-car retailers were not authorized by automakers to carry out repairs to recalled cars. “CarMax provides the necessary information for customers to register their vehicle with the manufacturer to determine if it has an open recall and be notified about future recalls,” CarMax spokesman Casey Werderman
said in a statement to Reuters. The petition is being supported by Sen. Charles Schumer, D-N.Y., The New York Times and Los Angeles Times reported. “Car dealers shouldn’t sell used cars that have a safety recall to consumers, period,” said Schumer. “Far too many times we have seen the tragic and often fatal consequences when deficient cars are allowed on the road, and it’s time for the FTC to do everything it can to put a stop to it.” Werderman also said CarMax supports legislation mandating used-car retailers to fix recalled cars. The company sold 526,929 used cars in the year ended Feb. 28, according to its latest annual filing. Consumers for Auto Safety and Reliability supported a bill in California that would ban dealers from selling used cars that have been recalled but not fixed, but the legislation died in an
CCC Information Services Introduces Carwise™
Customer reviews can have a big impact on purchasing decisions, provided consumers can find the reviews they’re looking for and have confidence that those reviews are from real customers. To help repairers prominently display their real customer reviews directly in
front of potential customers, CCC has introduced Carwise™ Review Plugins. These dynamic mini applications create a dedicated space on the shop’s website where a live, scrolling stream of real customer reviews is readily viewable by visitors to the shop’s website. These plugins
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committee earlier this month. In a June 2 letter to the California Assembly’s Business, Professions and Consumer Protection Committee, which was weighing the bill, attorneys for CarMax argued it was impractical for the usedcar retailer to manage repairs, the L.A. Times reported. The company would have to devote staff resources and time to take a recalled vehicle to the nearest authorized dealer for repairs. The manufacturer, not CarMax, would still pay for all recall repairs. Such a mandatory process could cause long delays in CarMax’s efforts to sell a vehicle, the company claims. GM, for example, has recalled about 2.2 million older small cars in the United States to fix a defective ignition switch linked to more than 50 crashes and at least 13 deaths. GM has said it will take until October to have enough parts to repair all the vehicles.
are free to CCC ONE® users and only take a few minutes for shops to install. Carwise is a CCC Information Services offering that facilitates engagement between auto body repair shops and consumers. “Some of the most successful shops
SUV Thefts are on the Decline but CUV Thefts are Rising
Over 21,700 2011-2013 model-year sport utility vehicles (SUVs) and crossovers (CUVs) were stolen in the U.S. between Jan.1, 2010 and Dec. 31, 2013. In an analysis, the National Insurance Crime Bureau (NICB) and National Crime Information Center (NCIC), in a ForeCAST report, break down the thefts by state; region; class, model and make; and the number and percentage of unrecovered vehicles. The analysis points out that SUVs are typically built on a pickup truck platform, while CUVs are built on a car platform. In the last report of this kind, the groups note, 19,961 SUV/CUV thefts occurred, showing the growing popularity of these vehicles among consumers, and therefore thieves, since the previous report’s January 2008 to June 2012 time period. Interestingly, SUV thefts are on the decline—down 25% compared to the previous report—while CUV thefts are on the rise, up by 31%.
we see have embraced new ways to communicate with consumers at the time and on the device of the customers’ choosing,” said Joseph Allen, GM, CCC Automotive Services Group. To learn more about the Carwise™ Review Plugins, visit www.carwise.com/plugins.
www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 7
New California Minimum Wage Took Effect July 1
Sentencing Update on CA Glass Harvesting Ring
Six suspects arrested as part of a glass harvesting ring plead no contest to felony charges of insurance fraud and personal identification theft on July 9. Felisha Blackmon, Aaron Bonner, Darryl Cartwright, Bonita Clayborn, David Ludd, and Atlakea Scott all plead guilty to charges associated with their involvement in submitting approximately 1,000 false insurance claims for automobile windshield chip repairs. “This case is a reminder for consumers to pay attention to all communication from your insurance company,” said Commissioner Jones. “Most insurance fraud leaves a paper trail that helps our detectives to bring criminals to justice. In this case, the paper trail led to the arrest and conviction of the criminals that ripped off insurers.” The organized ring of six suspects allegedly impersonated insurance policyholders and submitted claims for windshield chip repairs to multiple insurance companies between May 23, 2011 and May 24, 2012. The group initially operated a legitimate auto glass repair business, but later began to retain consumers’ policy information and filed additional fraudulent claims on consumers’ policies, without policyholders’ knowledge or permission.
Effective July 1, 2014, the minimum wage in California will increase from $8.00 to $9.00 per hour. Effective January 1, 2016, the minimum wage in California will increase to $10.00 per hour. This means that the minimum weekly wage rate for a full-time worker will increase from $320 to $360 per week. There are significant penalties for failure to pay minimum wage and it is important to review pay records to verify compliance before Tuesday, July 1, 2014. The implications of this increase extend beyond the hourly minimum wage worker and employers are cautioned to consider the following: Are the salaries of exempt employees sufficient? One requirement to meet the California executive, administrative or professional exemptions from overtime is that the employee receive a monthly salary that is no less than two times minimum wage for full-time employment (40 hours). The current monthly minimum is $2,774. The minimum monthly salary will increase to $3,120 ($37,440 annualized) in July 2014 and $3,467 ($41,600 annualized) in January 2016.
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Sacto Shop Owner Sentenced to 180 Days, $16K Restitution
A Sacramento auto body shop owner has been sentenced to 180 days in county jail and five years probation after pleading no contest to insurance fraud. Sacramento Superior Court Judge Laurel White also ordered 37year-old Ratnesh Kumar to pay $16,433.70 in restitution, according to a Sacramento County District Attorney’s Office news relase. On Oct. 26, 2009, Kumar’s friend, Ugend Prasad, reported to the Sacramento Police Department and his insurance carrier, CSAA, that Prasad’s 1997 Toyota 4 Runner had been stolen. On Dec. 4, 2009, CSAA paid Prasad $9,776.91 on his loss claim, authorities said. On Nov. 3, 2009, Kumar reported to Sacramento police and GEICO Insurance Co. that his 1999 Honda Accord had been stolen. On Feb. 5, 2010, GEICO paid Kumar $6,456.79 on his loss claim. Then on Nov. 17, 2010, Kumar’s wife was driving their 2002 Mercedes when she rear-ended another vehicle. After the accident, Kumar added collision insurance coverage to the Mercedes’ auto insurance policy. They next day, authorities said, he filed a collision coverage loss claim asserting that he had the collision coverage before the accident.
Memorial Service Held for Owner of DJS Fabrications
A memorial was held on Saturday, July 19 for Doug Symiczek, 49, who died Sunday July 6 in a small plane crash in Lake Elsinore, California. Symiczek, owner of DJS Fabrications, a manufacturer of tools and equipment for collision repair shops. Doug was an active participant at NACE and SEMA shows along with his wife Kim. Kyle Parton, 29, and Jacob Griffiths, 32, also died in the crash. The memorial for all three was held on July 19 at 2 p.m. at the Hans Christensen Middle School, 27625 Sherman Road, in Menifee, California. Symiczek leaves behind a wife and two daughters. Griffiths leaves behind a pregnant wife. Parton leaves behind a pregnant wife and 3-year-old son. Those interested in making donations to help in funeral costs and supporting the families can do so online by following links at autobodynews.com.
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Continued from Cover
Service King
vestment period.” David Stonehill, Carlyle managing director and member of the Carlyle U.S. Equity Opportunity investment team, said Service King’s customer commitment and focus on high quality is what initially attracted them to the investment. Those same qualities make the repair chain attractive to Blackstone, according to the firm’s senior managing director, Peter Wallace. “We look forward to partnering with management, the Company’s employee-owners, and Carlyle to support Service King’s continued growth and expansion,” he said. Service King got its start in 1977 when founder Eddie Lennox took out a $10,000 loan to start the business out of his two-car garage. Today it is one of the largest collision repair operations in the U.S.
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Caliber Acquires South El Monte, CA, Collision Center
Caliber Collision Centers continues its rapid expansion across the California market with the acquisition of “L” Monty Body Shop in the Inland Empire region. “Today’s opening of our newest location in South El Monte, California further enhances our ability to restore our California customers to the rhythm of their lives,” said Steve Grimshaw, Caliber Collision Centers’ Chief Executive Officer. “We are committed to acquiring centers across every Caliber market to provide industry-leading customer convenience and CSI metrics.” “We are proud to now operate 88 locations in California and 14 locations across Caliber’s Inland Empire region,” added Grimshaw. Caliber Collision’s new South El Monte location is at 1841 Tyler Avenue in South El Monte. “Our new South El Monte Collision Center location brings our total number of locations to 179 as we continue to grow into the collision repair provider of choice in every community we serve,” added Mark Sanders, Caliber Collision Centers’ President and Chief Operating Officer.
ASA Leadership Takes MFN Clause to Capitol Hill
On June 18, 2014, Automotive Service Association (ASA) collision leaders traveled to Capitol Hill to meet with key members of Congress and their staff to discuss the negative effects of the Most Favored Nation (MFN) clause. ASA noted the problems that MFN clauses can create for shops, consumers and insurers. The benefits of the MFN Clause may include cost savings for buyers that can be passed down to other buyers and customers. Negative implications may include discouraging price cutting or even encouraging monopolies. Dan Risley, ASA president and executive director, said: “We were encouraged by the interest in Washington, D.C., and look forward to continued conversations with our representatives. Most Favored Nation clauses are harmful to consumers, shops and some insurers. Michigan has recognized the damage these clauses can do in a marketplace and acted accordingly with regard to health insurance. This same reasoning should apply to vehicle repair, and property and casualty insurance. This is the single most important issue we have in the collision repair industry today.”
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UT Windshield Scam
have him or her work out payment with the auto glass installer. To find a certified auto glass shop, go to safewindshields.org. “If you get in a rollover accident, 30 percent of the strength of that roof is from that windshield,” he explained. Mason said airbags also exert a lot of force on a windshield when they deploy. A windshield not firmly glued in place might get blown out. “You’re not going to get the full effect and safety of that system,” he said. If someone approaches you about replacing your windshield, don’t do it, Mason advised. Besides opening yourself to a potential scam and physical harm, there’s a good chance your windshield doesn’t need repair. “A lot of times they’re showing you just surface damage to the windshield,” Mason said. “The surface damage does not need to be repaired on a windshield unless there’s a break in the glass.”
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Group 1 Acquires Houston’s Mundy Chevrolet and Mazda
CAPA Joins IIHS on Bumpers
Group 1 Automotive, Inc. has announced the acquisition of Munday Chevrolet and Munday Mazda in Houston, Texas. The dealerships, which will continue to operate as Munday Chevrolet and Munday Mazda, are expected to generate $225 million in estimated annual revenues. “Munday Chevrolet is the second largest Chevy dealership in Texas and sixth largest in the country. We are delighted to add this high volume store to our growing family of dealerships in our hometown of Houston,” said Earl J. Hesterberg, Group 1’s president and chief executive officer. “The addition of Chevrolet and Mazda expands our scale and brand offerings to a total of 17 brands across 19 stores serving over 300,000 customers in the greater Houston metropolitan area.” Additionally, on June 23, 2014, Group 1 completed the disposition of Hassel Volvo. This dealership, located on Long Island, New York, generated approximately $30 million. Group 1 owns and operates 153 automotive dealerships, 195 franchises, and 38 collision centers in the United States, the United Kingdom and Brazil that offer 34 brands of automobiles.
The Certified Automotive Parts Association (CAPA) has partnered with the Insurance Institute for Highway Safety (IIHS) to develop its 501 Bumper Standard. This criterion allows the market to identify parts that are comparable to more expensive OE parts, according to the organization. The development of the CAPA 501 Bumper Standard included extensive examination of various bumper parts, comparative testing, consultation with industry experts and input from CAPA’s technical committee. In addition, IIHS conducted a series of lowand high-speed demonstration tests in order to evaluate both the crashworthiness and damageability of a vehicle equipped with CAPA standard parts. According to IIHS Chief Administrative Officer Joe Nolan, test vehicles that used non-OE, CAPA-certified parts received similar damage protection to those equipped with OE parts. “Competition in the parts area helps keep insurance costs down. But substandard or poor quality structural parts that don’t match original equipment can undermine the cost savings and affect vehicle safety,” he said. “We commend CAPA for pursuing a certification standard for aftermarket bumpers.”
Mitchell’s New Dispatch Tools for Workcenter™
RDA Adds Central Paint as New Member
Mitchell has announced the latest updates to the Dispatch module of the WorkCenter™ claims management solution. The Dispatch assignment automation tool has been shown to schedule 500 or more assignments in 30 seconds or less on average. The new Dispatch features include customer appointment booking for more accurate scheduling and non-appraisal work assignments to improve field appraiser productivity. “Time is one of the most critical components of the claims process, for both the appraiser and the auto owner,” said Marcos Rivera, Senior Director for Mitchell. “The latest features within the Dispatch module aim to increase efficiency and overall productivity by providing improved task management and scheduling tools to users. Insurance clients already leveraging automated scheduling through the WorkCenter solution increased productivity by over 27 percent annually.” Appointment booking through the Dispatch module eliminates the uncertainty of appointment times and dates. By adding the ability to guarantee an appointment slot at first notice of loss, Mitchell significantly reduces wait time.
The Refinish Distributors Alliance (RDA) has added Central Paint as a new member. The company has been in business for 64 years and is a BASF single line distributor with headquarters in Trenton New Jersey. With this addition, RDA grows their membership to cover 29 states. “We are excited to have Central Paint as part of the RDA/IMPACT organization. Central Paint exemplifies what our group is all about, Premier PBE Distributor’s providing exclusive networking, products and services.” said Robert McKenzie Jr., Executive Director of RDA. Tom Smetanka, General Manager and George Hyman, President and Owner of Central Paint are looking forward to being a part of the RDA/IMPACT organization. They are eager to share and learn with the members of the group. General Manager Tom Smetanka said, “they are always looking for ways to differentiate themselves and the IMPACT Performance Products and Marketing Programs will be an immediate benefit. RDA/IMPACT is the largest national group of refinish jobbers dedicated to providing services and products to shops.
10 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
WV Supreme Court Rules on Aftermarket v Recycled Parts
The Automotive Recyclers Association (ARA) has said it applauds the recent West Virginia Supreme Court of Appeals ruling that the state’s Automotive Crash Parts Act does not apply to the use of salvage/recycled OEM parts and as such, affirms the use of salvage/recycled OEM crash parts in vehicle repairs when such repairs are negotiated by insurers within the year of the vehicle’s manufacture, or in the two succeeding years. The Court ruled that the Crash Parts Act clearly intended to require disclosure and written consent for only some, not all, replacement crash parts, and found that aftermarket crash parts and salvage/recycled OEM crash parts are “diametrically different” products and not interchangeable in the context of the statute. Thus, the use of salvaged/recycled OEM parts by Liberty Mutual Insurance Company and the collision repair shop did not violate the Crash Parts Act. The Court’s ruling brings several years of litigation and misrepresentation about recycled, OEM parts to conclusion, according to the ARA.
LKQ Has Donated $114K in Parts to Foundation Schools
LKQ Corporation has donated $114,000 in parts this year to collision training schools through the Collision Repair Education Foundation. The parts donated by LKQ will allow students the opportunity to practice collision repair on current model vehicle parts. As collision schools are facing reduced budgets, these types of donations are vital to the student’s technical education. “LKQ continues to show their corporate stewardship by donating vehicles, parts—both new and reconditioned—to SkillsUSA for competition, parts to help rebuild Recycled Rides vehicles for needy families and to schools,” said Clark Plucinski, executive director of the Foundation. “They continue to find ways to help the schools achieve their goals of producing quality, job-ready entrants. We can’t thank Mr. Fortner and Mr. Wagman enough for their benevolence.” Added Terry Fortner, vice president of industry relations and market development for LKQ Corporation, “LKQ Corporation realizes the importance of training current and future collision repair technicians. We are honored to be an active member of the Collision Repair Education Foundation.”
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www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 13
Florida Repairers Re-File Multi-Lawsuit Against 39 Insurers, Previously Filed Complaint Dismissed Over several months, auto body repair shops in five states (Florida, Mississippi, Indiana, Utah and Tennessee) have filed antitrust actions against a multitude of auto insurers, alleging that the insurers’ direct repair programs violate the antitrust laws. In each case, the plaintiffs alleged that the manner in which the insurers set reimbursement rates for covered repairs artificially depressed the compensation plaintiffs received for their services, and that the insurers also steered insureds away from plaintiffs’ businesses to those shops that are participants in the insurers’ direct repair programs. The attorneys representing dozens of Florida Collision Repairers have now re-filed an amended complaint seeking their day in court. They did so following a judge’s comments when the judge dismissed the previous complaint (A&E Auto Body, Inc., et al. v. 21st Century Centennial Insurance Company, et al.) finding that the plaintiffs’ complaint lacked the necessary factual detail required for the plaintiffs’ claims. The suit, originally filed February 24 in the U.S. District Court for
the Middle District of Florida, Orlando Division, was one of five that plaintiffs in May sought to have consolidated for pretrial proceedings. The insurers also maintained that if the Judicial Panel does consolidate the cases, they should be transferred to the Middle District of Florida, before the judge presiding in the A&E Auto Body case, because it is the “most procedurally advanced case.” Among the problems cited in the judge’s dismissal order was that each of the allegations (across over 120 paragraphs in the complaint) were included in each of the several counts included in the complaint and therefore constituted what the judge deemed a prohibited “shotgun” pleading. As announced previously, the Judge had also denied the defendant insurer’s efforts to dismiss the repairer’s lawsuits and allowed the plaintiff repairer’s to amend their complaint to provide more detailed information relative to the specific actions by each insurer and specifying the related damages which led to the multi-
14 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
litigation lawsuit. (See the accompanying modified/amended complaint at autobodynews.com) “We’re excited to have this interruption behind us” stated Ray Gunder of Gunder’s Auto Center, one of the plaintiff repairers represented in the lawsuit. “In reading the complaint, everyone in this industry knows it to be the truth… I am looking forward to bringing the issues to a jury and exposing the insurer’s egregious practices and ending the suppression that has been so harmful to our industry and to the consumers we serve. All repairers want is to serve our customers in an unencumbered manner and to see our employees earn a fair wage for their efforts” stated Gunder. In late May, plaintiffs filed a motion with the Judicial Panel on Multidistrict Litigation seeking to have the cases consolidated and transferred to the Southern District of Mississippi. In support of the request, the plaintiffs noted that the first filed case (Capitol Body Shop v. State Farm Mutual Automobile Insurance) was filed in Mississippi, that the actions
all involve “common questions of fact,” and that transfer would “serve the convenience of the parties and witnesses.” Plaintiffs also noted in their motion that “all of the actions are at the same early stage of litigation.” On June 16, the Judicial Panel set plaintiffs’ motion for oral argument on July 31. In the interim, however, the defendants have filed motions to dismiss the Mississippi case, arguing that the allegations in that complaint, like the allegations in the Florida case, are similarly insufficient as a matter of law. While that motion is unlikely to be decided prior to the Judicial Panel’s ruling on the motion for consolidation and transfer, it could have an impact on the Panel’s decision whether to consolidate the cases, and where.
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www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 15
Independence Day Storm Tears Roof off Body Shop in Methuen, MA
Eight NJ Dealerships Settle $1.8M Deceptive Sales Charge
Harry Castillas, owner of Harry Auto Body, was standing outside his shop at 1010 Riverside Dr. in Methuen, MA, when a large portion of the building’s roof was torn off by violent winds on July 3. “It was scary. I was out here when the roof hit the cars. I went inside. I didn’t want to get hit,’” he said. Castillas said his shop was spared the worst of the blow, though his staff had to buff scratches out of a car that sustained minor damage when the large section of roof was blown to the ground. Three cars on the lot at Hughes Motor Group, a used car dealer, were also damaged when the section of roof landed, according to Castillas. Harry Auto Body and Hughes Motor Group share the building, and the damage to the building was isolated to the car dealer’s side. “The rain started coming down big time and it was like a tornado or
something. Cars pulled over because it was so bad, and then as quick as it happened, it was gone,” Castillas said. Castillas said Hughes Motor Group had closed early on July 3 for Independence Day, and no employees were present when the roof was destroyed. When the worst of the storm passed, Castillas and his staff turned off the breakers to cut power to the neighboring business, because rain was falling freely onto the office computers. Insulation and ceiling tiles littered the office. David LaPointe, owner of LaPointe construction, said he believed all of the electronics in the office had been destroyed. He and a crew of several employees were on site yesterday cleaning up debris from the dealership’s driveway. The Andover-based construction company has contracted with the building’s owner to oversee the property’s maintenance. LaPointe
estimated the damage to the roof to be at least $70,000, and said the total cost could be as high as $100,000 if none of the equipment that was inside can be salvaged. “The whole roof came off. There’s water in the bay, the workshop, the office. It’s pretty bad,” LaPointe said. LaPointe said he will work with an assessor from Hughes Motor Group’s insurance company to price out repairs. LaPointe’s business was closed for the holiday, but pieces of the building’s roof were sitting in the driveway, and cleanup couldn’t wait. Castillas and his staff also came to work on their day off to help clean up. Castillas, who lives in Methuen, said he could not recall a storm that did so much damage around town in such a short amount of time. All the same, he said he was grateful things hadn’t turned out worse.
Eight dealerships in New Jersey owned by Carmelo and Ignazio Giuffre have reached a $1.8 million settlement with the state’s Division of Consumer Affairs. The settlement follows 45 consumer complaints of deceptive sales tactics, including failing to inform customers of previous damage or defects, adding after-sale costs without prior customer approval and failing to implement advertised or negotiated prices. The stores listed in the settlement are Route 22 Toyota, Route 22 Honda, Route 22 Nissan and Route 22 Kia, all in Hillside; Hackettstown Honda and Hudson Honda in West New York; Freehold Hyundai in Freehold and Freehold Chrysler-Jeep in South Freehold. The Giuffres were involved in a similar settlement in 1999, agreeing to pay $450,000, including $250,000 as a compensatory fund for consumers. State investigators claim that the recent alleged actions of the dealerships violate the prior agreement.
New York State Assemblyman Fred Thiele has introduced an amendment to an anti-steering bill that has been on the books for decades that would eliminate the exception for insurance “claims solely involving window glass.” This language kept automotive glass compa-
nies from being covered by the antisteering law. Collision repair shops have been happy with the bill for years because it includes the language, “the insurer shall not, unless expressly requested by the insured, recommend or suggest repairs
be made to such vehicle in a particular place or shop or by a particular concern,” says Mike Ruscillo, a 50-year veteran of the automotive glass industry who is semi-retired and just recently sold his New York company, Starlite Auto Glass.
“It’s just a matter of changing the wording and automotive glass will be covered as well,” Ruscillo says. “It’s easier to just take this line out than introduce new legislation.” The amendment has been moved to the state insurance committee.
Amendment Proposed Ensures Auto Glass Companies Are Covering by New York Anti-Steering Law
16 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
LaCIA’s July 8th Meeting Highlights On Tuesday, July 8, the Louisiana Collision Industry Association (LaCIA) held a member meeting in Lafayette, LA. Board member Randy McLachlan describes the meeting: “lightning, thunder and inches of rain weren’t what we were hoping for the night of our meeting. The hotel didn’t have the food ready on time, and the event next to ours was louder than the thunder outside, but as we always do in this industry, about 100 of Randy Ishee, we fearless started Dept of Justice eating, talked louder into the microphone, and closed another partition to block the noise. In other words, we didn’t let the trials and distractions stop us from doing our jobs and getting business done.” The meeting began with Kent Duhon from Freedom Biker Church leading the group in prayer, followed by the Pledge of Allegiance. After reading the Anti-Trust statement and addressing other legal matters, Vice Chairman Derek Stubbs introduced the association’s Board of Directors as
well as guest speaker Shane Sloan from Stiel Insurance. As part of their efforts to bring added value to their members, LaCIA will be working with Stiel Insurance over the next few months to compile options for members to receive discounts on Garage Keepers Insurance as well as group discounts for Medical and Workers Comp Insurance, a savings which could easily offset the $365 membership dues. Board member Pat Graham notes, “the insurance presentation went well. It gave the attendees Board member time to check what Randy McLachlan their policy will of Performance cover and what is Collision, Lafayette not covered.” Next, Wayne Krause from Mitchell explained how they came up with their time studies, discussed what is and is not included, and described some software features that could help with conducting complete and accurate estimates. McLachlan explains the importance of accurate estimating
software: “we believe, as an association, that the first step to getting this industry going in the right direction, to stop the implosion and hostile takeovers from other big businesses, is to get educated and to know our
Members being seated
business as well as they know theirs. We need to know what we can actually get paid for, how to prove it, and how to enforce it before we start fighting for other things on our own.” The meeting concluded with Randy Ishee’s update on the Department of Justice’s progress on the state of the collision repair industry and the automotive insurance industry. The department is still gathering facts, and LaCIA encourages attendance at their
future meetings to stay abreast of developments in this project. Both McLachlan and Graham agree that the meeting went well, and they were pleased with the turnout and the amount of participation. Graham
adds, “I would like to thank all our members for their commitment and courage in joining the LaCIA. I know we are few fighting for many, but it has to start somewhere. I would like to see more communication between all involved to help us move forward in a positive direction.” LaCIA will hold their next meeting on Tuesday, September 16 in Baton Rouge. www.la-cia.com
www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 17
Steve Plier Provides an Update on ALARISE by Chasidy Rae Sisk
The Alabama Automotive Repair Industry Society of Excellence (ALARISE) is an active association throughout the industry. Steve Plier, President of ALARISE, has been very busy traveling the country to aid recently formed associations and spread the word about some of the association’s projects, but he took time from his hectic schedule to provide an update on what is going on with ALARISE this summer. “ALARISE is fighting the battle of most repair groups,” Plier explains, “trying to increase membership, working and planning educational training classes for repairers in Alabama and surrounding states if anyone would like to attend, and beginning the planning and organizing process for the Southern Automotive Repair Conference 2015 in Biloxi, MS with the repair associations in Georgia, Florida, Louisiana, Mississippi, Tennessee, and we hope, the new Texas association.” Members of ALARISE were Steve Plier, heavily involved in ALARISE President April’s Skills USA State Competition, and they are actively seeking additional ways to play a role in introducing the opportunities
Hertz is Serving CARSTAR Locations in IL and FL
Hertz, the world’s largest general use car rental brand, announces it has begun servicing two new CARSTAR locations: Stock Auto Body CARSTAR in Illinois and Schlenker Automotive CARSTAR in Florida. The openings are part of a Company-wide strategy to expand in the off airport, neighborhood car rental market servicing replacement, leisure and business customers. The Hertz Corporation. “Hertz is excited to be partnering with these CARSTAR locations and expanding our network in Illinois and Florida,” commented John Holt, Senior Vice President, Off Airport Operations for Hertz. “As CARSTAR facilities, the shops are known for providing consistently, high quality vehicle repairs. Our partnership lets customers get back on the road in the fastest and easiest way possible after dropping their car off for service or repairs.”
available in the collision repair industry to state technical schools, on both the high school and college levels. From 9AM until 3PM on August 16, ALARISE has scheduled an educational class with Ron Perretta at the Jeff State Community College Campus. Perretta will be discussing job costing and detailed damage analysis blueprinting. Additionally, ALARISE hopes to plan another training seminar in October and has tentatively scheduled a class with Mike Anderson on February 7, 2015, though topics have yet to be determined. As with most collision repair industry associations, increasing membership is an ever prevalent concern. Plier says, “ALARISE would like to grow in numbers to be able to provide an opportunity for members to be able to purchase insurance and other benefits as part of our membership package. ALARISE continues to look for opportunities and ideas to gain members who agree that education and awareness is a need for all.”
ALARISE www.alarise.com
ABRA Acquires 12 True Quality Collision Centers
ABRA Auto Body & Glass announced June 27 the purchase of all 12 True Quality Collision Centers in Cincinnati and Dayton, Ohio, and Bloomington, Indiana. Terms of the deal were not disclosed. ABRA is one of the largest and fastest growing multi shop repair operators in the country. Today’s transaction introduces the company to the state of Ohio and is another step in expanding its national footprint. ABRA’s repair center portfolio now stands at 229 in 18 states. Duane Rouse, ABRA’s President and Chief Executive Officer said, “Our growth strategy is on target and progressing as planned. We are delighted to enter the Ohio market while expanding our presence in Indiana. We look forward to serving our customers and business partners in this region of the country.” True Quality co-owner Jerry Fry said, “ABRA has had an excellent reputation for more than 30 years. I have no doubt our employees will be in exceptional hands moving forward.”
18 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
GA Court Orders State Farm to Pay Over $40K for Breach of Contract in Short Pay Case A Georgia State Court has ordered State Farm Insurance Co. to pay over $40,500 after it failed to provide for its client’s collision repairs. Japonica Roberts brought the suit against State Farm after the insurance company failed to pay for about $4,000 in repairs that Hernandez Collision Center in Savannah, GA, had completed. The judge, H. Gregory Fowler, issued the ruling last month after the case was heard by a jury. Hernandez Collision was a witness in the case. “It is refreshing to see the results in this case and know that a jury of our peers awarded Mrs. Roberts for the hardship caused by her insurer,” said April Hernandez,
AAM at Hernandez Collision. “While Hernandez Collision Center gladly works with all insurers, our responsibility is to our customers to ensure all damages to their vehicle is repaired properly and thoroughly. We feel it is also our professional responsibility and moral obligation to help customers like Mrs. Roberts when they are treated unfairly. We congratulate Mrs. Roberts on her courage and conviction and are thankful that we could help her in this endeavor.” The final judgment awarded to Roberts included $5,508 for breach of contract, $5,000 as a bad faith penalty and $30,000 for attorney fees. In all, State Farm will pay $40,508.
Matrix Automotive Finishes announced Tuesday that Ryan Evans, head painter of the History Channel’s “Counting Cars,” will be at the company’s booth at the 2014 NACE/CARS Expo & Conference. Matrix’s booth, No. 26003, will feature Evans all day on July 31. He’ll be signing autographs, taking photos and demonstrating the company’s new
pinstriping paint line. “Twenty years of painting experience has taught me that performance and durability of paint products is crucial for a high quality finish,” Evans said. “Matrix performs best when standing up to the abuse of sanding, taping, and the demands that come with any custom paint job. Visit MatrixSystem.com.
Matrix to Host Ryan Evans from Counting Cars
www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 19
Allstate Argues for Multidistrict Consolidation in Antitrust and RICO Cases Filed in Five States, Supports Illinois or Florida Venues, Opposes Mississippi or Louisiana Venues Over several months, auto body repair shops in five states (Florida, Mississippi, Indiana, Utah and Tennessee) have filed antitrust actions against a multitude of auto insurers, alleging that the insurers’ direct repair programs violate the antitrust laws. In each case, the plaintiffs alleged that the manner in which the insurers set reimbursement rates for covered repairs artificially depressed the compensation plaintiffs received for their services, and that the insurers also steered insureds away from plaintiffs’ businesses to those shops that are participants in the insurers’ direct repair programs. The five Antitrust Actions were all filed in the first four months of 2014 and include the following: 1) Capitol Body Shop, Inc., et al. v. State Farm Mut. Auto. Ins. Co., et al., No. 3:14CV12, United States District Court for the Southern District of Mississippi, Northern Division-Jackson (pending before the Honorable Carlton Reeves; complaint filed in January, 2014 and amended complaint filed on
March 4, 2014) (“Mississippi Action”); 2) A&E Auto Body, Inc., et al. v. 21 Century Centennial Ins. Co., et al., No. 6:14-CV-00310, United States District Court for the Middle District of Florida, Orlando Division (pending before Judge Presnell; complaint filed on February 24, 2014) (“Florida Action”); 3) Indiana Auto Body Ass’n, Inc., et al. v. State Farm Mut. Automobile Ins. Co., et al., No.1:14-CV-507, United States District Court for the Southern District of Indiana, Indianapolis Division (pending before the Honorable Tanya W. Pratt; complaint filed on April 2, 2014) (“Indiana Action”); 4) Alpine Straightening Systems, Inc., d/b/a Alpine Body Shop, et al. v. State Farm Mut. Auto.Ins. Co., et al., No. 2:14-CV-261, United States District Court for the District of Utah, Central Division (pending before the Honorable David Nuffer; complaint filed on April 10, 2014) (“Utah Action”); and 5) Brewer Body Shop, LLC, et al. v. State Farm Mut. Auto. Ins. Co., et al., No. 2:14-CV-02286, United States
20 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
District Court for the District of Tennessee, Western District (pending before the Honorable Sheryl H. Lipman; complaint filed on April 22, 2014) (“Tennessee Action”). The plaintiffs have since filed a motion to consolidate the five Federal lawsuits filed by multi-state repair facilities against insurance companies domiciled in other states. The request to the Judicial Panel on Multidistrict Litigation (JPML) asks to have the five suits moved to the U.S. District Court for the Southern District of Mississippi for consolidated pretrial proceedings. A sixth suit, the RICO class action filed by Crawford’s Auto Center, Inc. has been proposed for consolidation but Crawford’s opposes that (see related story page 8 this issue.) On June 12, attorneys for Allstate (the Allstate Defendants) requested that the Panel centralize for coordinated pretrial proceedings the six Pending Actions to the Northern District of Illinois (Eastern Division) to be managed by the Honorable Robert
M. Dow, Jr., or, in the alternative, to the Middle District of Florida (Orlando Division) to be managed by the Honorable Gregory A. Presnell. Allstate’s arguments include the availability of regular and frequent airline connections, the location of their attorneys, and the comparably lack of connections into Mississippi and Louisiana. They also cite the convenience for plaintiff’s attorney (who represents all the plaintiffs) John Eaves, Jr. who is based in Jackson, MS, as not being a valid reason to transfer the actions there. The Allstate Defendants have each been sued in some or all of six actions alleging that they wrongfully refused to compensate plaintiff auto body shops in full for collision repair work performed on insured automobiles, and engaged in various conspiracies to artificially suppress the cost of collision repair services and attendant labor rates and materials costs. Five of the six cases (collectively, the “Antitrust Actions”) were filed by the
(Movant) Plaintiffs’ counsel and allege violations of federal antitrust laws, as well as a potpourri of state law business tort claims, all on behalf of individual body shop plaintiffs, and are the subject of the Motion. The Allstate defendants also support the inclusion of the RICO case as a “tag-along” complaint, saying “That forum should be before Judge Dow in the Northern District of Illinois, where the RICO Class Action is pending. Unlike the Antitrust Actions, the RICO Class Action asserts claims on behalf of putative nationwide classes, and seeks the broadest relief on behalf of the largest number of potential claimants.” In this respect they agree with the RICO plaintiffs. On June 10, 2014, the Allstate Defendants notified this Panel of a potential tag-along action, Crawford’s Auto Ctr., Inc. v. State Farm Mut. Auto. Ins. Co., et al. (the “RICO Class Action”), filed by other counsel and not mentioned in the Motion. The RICO Class Action alleges essentially the same conduct as the Antitrust Actions, but seeks relief for a number of nationwide classes under RICO. For more on the RICO action see related story this page.
Shop Filing RICO Case Against Insurers Wants to be Excluded from Multidistrict Antitrust Litigation
In an Interested Party Response filed Monday, July 14, Crawford’s Auto Center, Inc. is opposing consolidation of Crawford’s Auto Center, Inc., v. State Farm Mutual Automobile Insurance, Co, et al., a “RICO class action” with several antitrust lawsuits seeking multidistrict litigation (MDL) consolidation. The RICO Class Action plaintiff, Crawford’s Auto Center, is a Pennsylvania-based automobile collision repair facility who alleges that the defendants conspired amongst themselves and/or others to “suppress compensation to repair facilities for automotive collision repairs covered by insurance.” The RICO Class Action Complaint asserts that Defendants set certain “prevailing rates” for collision repair work; that those rates are “comprised of flawed and rigged data,” and that Plaintiff and the classes were “defrauded” into accepting those rates for automobile repair services. Now the plaintiffs have filed a motion to consolidate five Federal lawsuits filed by repair facilities against insurance companies. The request to the Judicial Panel on Multidistrict Litigation (JPML) asks to have the five, essentially identical suits to the U.S.
District Court for the Southern District of Mississippi for consolidated pretrial proceedings. Allstate identified the RICO lawsuit filed by Crawford’s as a potential “tag along” suit. In their response to the motion filed by the Plaintiff’s for consolidation of the five suite, Allstate’s filing stated, “The RICO Class Action alleges essentially the same conduct as the Antitrust Actions, but seeks relief for a number of nationwide classes under RICO.” Explaining their opposition to the motion, Crawford’s response states, “Like the majority of defendants who have filed responses to the proposed MDL, however, Crawford’s opposes consolidation of the RICO Class Action with the Antitrust Actions.” If the panel were to conclude that the litigation should be consolidated with the antitrust suits, Crawford’s would prefer they were located in the Northern District of Illinois, Easter Division, “given that the RICO Class Action is the case that seeks the broadest relief on behalf of the largest number of potential claimants and the Northern District of Illinois is the most convenient forum, on balance, for the parties and
witnesses.” Crawford’s filed the RICO Class Action in the Northern District of Illinois on April 30. The lawsuit names State Farm, Allstate, GEICO, Progressive, Farmers, Liberty Mutual and Nationwide and defendant insurers alleging they illegally conspire to control the collision repair process and the cost of repairs. The suit also names USAA, Travelers and American Family as conspirator insurers, though not as defendants. According to Crawford’s interested party filing, at an initial status conference held on its suit July 10, the Judge assigned to the case ordered that if the suit is “not selected for MDL treatment or if an MDL is created in this district, the Court will set this matter of status promptly after JPML issues its ruling.” The plaintiffs and defendants in the cases will have the opportunity to present their opinions at a hearing of the Judicial Panel on Multidistrict Litigation on Thursday, July 31, 2014, in Kansas City, Kansas.
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Valspar Automotive Introduces Advanced Paint Technology for OEM Color Matching Valspar Automotive is excited to introduce an advanced technology in the world of automotive OEM colour matching: De Beer Mysterious Colours. Automotive OEMs are using more advanced paint technologies, and De Beer Refinish continues to be on the cutting edge of colour matching. De Beer Mysterious Colours offer state-of-the-art technology through colour-shifting pigments, which replicate these modern OEM paint effects. De Beer Mysterious Colours work as a complementing additive to your existing De Beer Refinish products, including WaterBase 900+ and BeroBase 500 series. “Valspar Automotive prides itself on color technology. These additives, which are very limited use, offer top quality color matching for some of the most challenging colors on the market today.” — Pete Willman, General Manager of Valspar Automotive North America. De Beer Mysterious Colours are currently available in five liquid colour additives: · 59-13 Shifts from Warm Green to Warm Red · 59-14 Shifts from Light Green to Bright Blue
· 59-11 Shifts from Violet to Green · 59-12 Shifts from Blue/Green to Pink · 59-15 Shifts from Russet Red to Green/Yellow KC Mathieu of Discovery Channel’s Gas Monkey Garage will be Valspar Automotive’s featured guest for the 2014 NACE/CARS Expo & Conference, the company announced. Attendees can meet Mathieu and view spray demonstrations of the new De Beer Air Dry Clear Coat at Valspar’s booth, number 26006. Mathieu will also be available for autographs between demonstrations. “At Gas Monkey Garage, we need to get the job done fast, and De Beer is a key factor in our speed,” said Mathieu. “I am excited to attend the NACE Expo and see more of the latest in automotive refinishing technology.” Demonstrations will be held: July 31: 9:00–10:00 a.m. and 4:30– 5:30 p.m. and Aug. 1: 10:30–11:30 a.m. and 4:30–5:30 p.m. More information about De Beer Refinish can be found at www.debeer.com. For additional information about Valspar Automotive visit www.valsparauto.com.
ARA Announces Keynote Speakers for 71st Annual Convention and Exposition in Nashville, TN The Automotive Recyclers Association (ARA) announced today that John Van Alstyne, CEO and President of I-CAR, and Christy Wright, a member of the Dave Ramsey Speakers Group, will be keynote speakers for ARA's 71st Annual Convention and Exposition. The announcement came as online registration opened for the premier event of the professional automotive recycling industry. ARA's 71st Annual Convention and Exposition will take place October 22-25, 2014 at the Gaylord Opryland Resort and Convention Center in Nashville, Tennessee. “John Van Alstyne brings two decades of experience and knowledge of the OEM and vehicle technology sector to I-CAR,” said ARA President, Ed MacDonald. “We are excited to provide ARA members with the opportunity to hear from John about the technical-focused education and resources that I-CAR is working on and ways in which professional automotive recyclers can collaborate with the collision repair industry for the ultimate benefit of the consumer.” Van Alstyne will speak to Convention attendees on Thursday, October 23. ARA also announced that
Christy Wright will be a second keynote speaker. Hand-picked by New York Times best-selling author and radio host Dave Ramsey, Wright has served as a business coach, is a certified and experienced life coach, with expertise in issues such as leadership, life balance, setting and reaching goals, time management, and building budgets. “Christy is the ideal speaker to address our members and the challenges associated with running a small business,” said ARA CEO Michael Wilson. Wright will address automotive recyclers on Friday, October 24. Other highlights of ARA's 71st Annual Convention include tours of Nissan North America's manufacturing plant, 12 hours of Exposition with nearly 100 exhibitors, a networking breakfast for the Ladies of the Automotive Recyclers Association, and the Annual Awards Dinner and Presidential Gavel Passing. To register and for more information, visit the 2014 Annual Convention and Exposition website at www.araexpo.org or call (571) 208-0428. To learn more about the Association, visit ARA’s Home Page at www.a-r-a.org or call (571) 208-0428.
22 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
Court Grants Chrysler’s Motion to Dismiss Sunroof Allegations in Part, Denies in Part
A New Jersey U.S. District Court has denied in part and upheld in part Chrysler’s motion to dismiss a case in which vehicle owners allege the “drain tubes” and “other manufacturing flaws” in their sunroofs allowed water and moisture into the vehicle’s cabin, damaging the upholstery, electronics and other components. The judge gave the vehicle owners, who are seeking a nation-wide class action lawsuit, permission to file a third-amended complaint. Eleven owners have made the allegations as part of a putative nation-wide class action, which would comprise individuals and entities who purchased the vehicles manufactured after June 20, 2014. The vehicles involved are the Jeep Patriot, Jeep Liberty, Jeep Compass, Jeep Commander, Jeep Cherokee, Jeep Grand Cherokee, Chrysler Town and Country and Chrysler 300. Lead plaintiff Jay Miller claims he purchased a 2008 Jeep Patriot in April 2008. He alleges he “has observed and continues to observe” water leaking from the Patriot’s sunroof. “As a result, Miller has incurred out-of-pocket expenses to address
electrical problems and a musty or moldy smell inside the Jeep,” according to court documents. After the original complaint was filed in February 2012, the defendant moved to transfer the case to the United States Bankruptcy Court that presided over the 2009 bankruptcy of “Old Chrysler.” “Following the transfer, the parties entered into a stipulation and order that defined the boundaries of defendant’s liability in this action and remanded the matter back to the New Jersey U.S. District Court,” according to court documents. In its motion to dismiss, Chrysler’s attorneys allege the second-amended complaint “violates” the terms of the bankruptcy court’s stipulation and order because “it is beyond dispute that more than half of the plaintiffs own vehicles are older than model-year 2010, i.e. vehicles manufactured prior to June 11, 2009.”
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Four Generations Make Miller Auto Body the Oldest Shop in Utah by Ed Attanasio
There are a handful of fourth-generation body shops in this country, but we haven’t found a fifth-generation one yet. That may change if and when Chase Miller (age 14) decides to enter the collision repair world and take the helm at Miller Auto Body in
A newspaper ad for Miller Auto Body in the 1950s. That’s Jeff Miller’s grandfather Charles W. Jr. in the middle
Logan, UT, the oldest body shop in Utah. Chase’s father Jeff Miller, 48, is the Owner/President of Miller Auto Body and proudly represents generation #4. He learned the business from his father, by sweeping floors initially and driving cars around the shop. “I was 13 or 14 and my junior high was located directly behind the shop, so that’s where I would go after school,” Miller said. “I learned literally from the ground up and if Chase wants to do it the same way, the opportunity is definitely here.” Miller Auto Body opened its doors way back in 1896, when Jeff’s great-great grandfather C.W. Miller started painting buggies and carriages at age 12. Change was in the air, as new technology was looming. Ford Motor Co. released its first vehicle that year and called the Ford Quadricycle; the X-Ray machine hit the market during that same time and the N.Y. Telephone Co. became a reality in 1896. Nine years later, C.W. built his very own shop and expanded his services to include mechanical repairs. That business gradually evolved into
24 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
auto paint and collision repair when cars took the place of the carriage and buggy. In 1948, Charles W. Miller Jr., took over the business and played a pivotal role in continuing his family’s
Jeff’s great-great grandfather C.W. Miller started painting buggies and carriages at age 12 in 1896
legacy, after learning the business while working there for two decades. It was an exciting time in the collision industry, because cars were changing and repair processes were evolving as
new equipment and better products became available. Miller Auto Body Shop ran into some unforeseen problems in 1950, when the shop burned down due to some faulty wiring. Not to be discouraged, Charles W. Jr. rebuilt the shop and ran the business until he was killed in a traffic accident in 1966. After his father’s death, C.W.’s son Robert took over running the shop and building the business. When he turned 63, he began phasing himself out of the day-to-day operations and began the process of handing it off to his sons, Jeff and Mike. Today, Jeff Miller is the President of the shop and Mike Miller is its lead technician. In 1993, Jeff’s father sat him down and had the “big discussion.” “I was at the crossroads about whether I should stay or go,” he said. “I graduated from Utah State University, got married and then took a job as an estimator with State Farm for a while on a part-time basis. I was still undecided. So, my father laid it out to me and told me the pros and cons of this business. I could see that it was a good opportunity, so I said yes. I was thrown into
the fire almost immediately, because tech here for 52 years. He’s 70 now and my mother got sick and my dad had to he works here part-time. We’ve got step away to take care of her. I had to people who’ve been here for 20-30 wear several hats back then, including years and it’s a great group. They’ve technician, quality control, estimabecome more than employees over the tor—I did it all at the beginning.” years and are like members of our exJeff’s father set up a plan in which tended family now.” his son could buy the 20,000 square foot shop with 15 employees and make the transition as seamless as possible. “Dad’s terms were more than fair,” Jeff Miller said. “He still comes in here every day and we have an office for him. He’s 74, but he still wants to be involved and we love it. He likes a place to come and enjoys being around the shop. He’s still active in Rotary and Fourth-generation Owner Jeff Miller learned the business has a tight group of old friends from his father, by sweeping floors initially and driving cars around the shop at the family’s shop that he gets together with.” Several years ago, Miller and Jeff is proud of the fact that Miller Auto Body is the oldest shop in Utah nine other shops in Cache Valley got and covets the family atmosphere. together to form a collective. “We’re “We’re fortunate, because we have kind of landlocked here and so we defourth generation customers now cided that if we worked together, we bringing their cars here. They tell me I could make it better for all of us,” he look a lot like my great grandfather. We said. “Most of the other shops in our have employees that have been here group are also second and third-generations shops. We’re competitors, but forever, which is really nice. One gentleman, Arlan Hovey, has been a body respect each other and are willing to
learn from each other.” As a charter board member of the Utah Auto Body Association (UABA), Miller has witnessed the collision industry evolve firsthand over the decades and sees the value in organizations like the UABA. “Every member has a say and we’re always looking to bring in new blood. Our goal is to educate ourselves to be better businesspeople and that’s why we host ICAR classes and get speakers like Michael Anderson here. If we don’t represent our own interests, who will?” What does the future hold for Miller Auto Body and will there be a sixth generation sweeping the floors around the shop one day, maybe 20 years from now? “Who knows? We have a great name here in Logan, because we were taught to be honest and fair with everyone. Our motto is ‘Fast, Friendly and Reliable’ and if we can continue along that line, why can’t we do this as long as we want? Either way, it’s going to be a lot of fun.”
Continued from Cover
AZ Shop Owner
from The Republic. A person who identified himself as Mike at 1st Class Collision said he would pass along a message to Michael Griesa. The shop’s website describes the business as a trusted body shop with a staff “trained to use effective techniques and professional tools to get great results for customers.” The body shop generally received high marks on the consumer website Yelp. One customer lauded the staff for discovering her mother’s vehicle had more damage than initially thought. “When my mother had what she thought was only a flat tire, but was really damage as she apparently hit something,” Karen S. of Fullerton, CA, wrote on the consumer website.
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www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 25
The Legal View
Erica Eversman is an attorney, frequent speaker and author on automotive legal topics. She has been quoted in such publications as The Wall Street Journal Online, USA Today, Kiplingers Personal Finance, Cars.com, Yahoo! News and other trade magazines.
How to Write an Authorization to Repair and Repair Contract—Documentation Part 1 with Erica Eversman
by Chasidy Rae Sisk
When I first started to write about the collision repair industry, I was astonished by the plethora of issues that can arise on any given day, but what surprised me the most was the difficulty that so many repair facilities face when trying to receive proper compensation for the work they have (already performed); after all, I fully expect to be paid for the work I do, and as a consumer, I would hope that the people who repair my vehicle receive the same consideration. Unfortunately, I now know that is not always the case, but I’ve also learned that there is a way for repair facilities to protect themselves better—by developing and maintaining records of proper Repair Documentation (such as the Repair Contract, Authorization to Repair, Assignment of Proceeds, Parts Notice and others). In fact, legal documentation plays such an integral role in successful repair businesses that it seems foolhardy to ignore its benefits, yet though many repairers have heard about it from attorneys or colleagues, they are often unfamiliar with the role it can play in their businesses. I decided to ask Erica Eversman, Chief Counsel for Vehicle Information Services, Inc. and founder of the Automotive Education and Policy Institute, to outline the basics so that readers can compare their own practices and determine what is best for their business. What follows is her response to my questions. “Fixing a car means engaging in a significant activity that involves large amounts of money, yet there is no written contract to protect your interests. Maybe you discussed the repair with the customer and believe this serves as an oral contracts, but oral contracts are difficult to enforce because, sadly, people lie. Even if a customer does not mean to be deceitful, people view and remember events and conversations differently. So what can you do? Before beginning a repair, be sure to get your customer to sign an Authorization of Repair and a Repair Contract. Though the specifics vary depending on state laws, having a valid contract
makes it easier to file suit to obtain the money rightfully owed to you after all other options have been exhausted. Eversman stresses that documentation is imperative because “the better prepared you are for litigation, the easier it is to get what you need.” “First, it is important to understand the relationships between collision repair facilities, insurance companies and consumers, specifically how these are impacted by whether or not the shop participates in the insurers’ direct repair program (DRP). In a non-DRP relationship, there are two separate contracts—the insured has one contract with their insurer and a second contract with the shop repairing their vehicle. These two contracts still exist in a DRP relationship, but in this case, a third contract comes into play, the DRP contract between the insurer and the repair facility. This agreement dictates how each party will satisfy their obligations of their individual contracts with the customer, usually before a collision actually occurs. It is key to note that, in a DRP relationship, the insurance company is not required to provide business or any other benefits to the shop. Though the insurer will make it appear as though the repairer has duties to fulfill to them, they do not seem to feel any obligation to the shop, as demonstrated by their insistence that the repair facility keep them appraised of every detail pertaining to the repair while they show no inclination of reciprocating by sharing information on their part. Eversman notes, “insurers like to think that they’re in charge of everything; they want all of the control and none of the responsibility.” “Second, repairers must be aware of their obligations as well as the consumer’s obligations. The repairer has three responsibilities: to inform the consumer about what is needed to repair the vehicle, to obtain the customer’s authorization to complete the repair, and finally, to fix the vehicle and restore it to its pre-loss condition. On the consumer side, obligations included receiving the information provided, authorizing the repair, and paying the repair facility for the completed product. Repair estimates were
26 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
designed to protect the customer by ensuring informed consent, but because insurance companies now pay for the vast majority of repairs, this is not as meaningful today as it was in the past. These obligations must conform to state laws, mainly in the sense that these laws dictate what is prohibited, rather than what is actually required.
Preparing your Repair Contract When it’s time to prepare your Repair Contract, there are five essential terms that must be adequately defined: the customer, the duties of each party, the parts, the damages and the shop’s professional judgment. Begin by defining your customer, including any relevant consumer protection laws, whether an estimate is required and any authorization received. It is imperative to recognize that the insurance company cannot be the customer as they cannot authorize the repair without the vehicle
owner’s consent (some state laws may require written consent from the consumer). If a shop repairs a vehicle based on consent from the insurer and something goes wrong resulting in an accident, the insured can sue their insurance company for engaging in bad faith, but the insurer can also file suit against the repair facility, so protect your business by accepting authorization only from the consumer. The next section of the Repair Contract should define the obligations of the repairer and customer as defined above. In defining the parts to be used, the Repair Contract should specifically indicate whether OEM, aftermarket or used parts will be utilized in the repair. The party who makes this decision depends on state laws but is generally left up to the consumer, with the repair facility’s advice playing a role in the decision hopefully. Many states require that the inSee Authorization to Repair, Page 49
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On Creative Marketing with Thomas Franklin
Tom Franklin has been a sales and marketing consultant for fifty years. He has written numerous books and provides marketing solutions and services for many businesses. He can be reached at (323) 871-6862 or at tbfranklin@aol.com. See Tom’s columns at www.autobodynews.com under Columnists > Franklin
Using Emotional Intelligence to Close Sales A driver improvement course authorized by the DMV in California tells us there are five basic emotional categories: HAPPINESS, SADNESS, FEAR, LOVE and HATE. The course goes on to tell us the way these emotions are expressed can determine our driving performance, either temporarily or permanently. The course notes that emotions can color our behavior and, when out of control, cause us to do unintelligent and even dangerous things. In fact this truth not only applies to driving a car, but can also apply to making any intelligent decisions. One of these is deciding where to take a vehicle after an accident. People generally come only when they and or their vehicle have suffered damage. For the driver this may include shock and pain. They come to have something fixed. They come when they are in a highly vulnerable state. They often come when they are caught up in the powerful negative emotions that follow pain of loss. If you are lucky, by the time a car owner comes to you, he or she will have already moved beyond the initial shock and disbelief brought on by the accident. Most buying decisions are emotional decisions. Most choices of repairer decisions are emotional decisions arising out of one particular emotion: FEAR! Why do damaged car owners go to the body shop suggested by their insurance company or agent? Because they are afraid the work won’t be properly guaranteed. Or because they fear complications that won’t be covered by
their insurance, that may cost them outof-pocket money. Fear also motivates people to go to shops referred by their friends, their attorney, their usual mechanic and just about anybody else they think will prevent them from getting burned as they shop for a service they generally know very little about. It is at this point in the customer’s life that a shop estimator steps in. How he or she handles this prospective customer determines whether or not the vehicle is left at the shop to be repaired. It’s likely that few estimators realize the emotional consequences of what they say and do at this point. And the fact that more than half of these prospects may be women puts an even higher importance on the handling of emotions. A team from Cambridge University led by Professor John Suckling has found key differences between the brains of men and women. In women, parts of the brain linked to the emotions, calculating risks, and the ability to listen were more prominent. In men, on the other hand, the areas of the brain tied to motor skills and co-ordination were denser and larger. In general, this indicates that women are better listeners, while men take more risks. I’ve interviewed estimators in a number of shops. I found that a female estimator often had a better closing ratio, especially with female customers. Men are apparently more likely to talk while women tend more to ask and listen. Training estimators in listening skills could increase a shop’s volume and profitability.
Tesla Halts Production to Retool Plant
Tesla Motors Inc. halted production at its sole assembly plant for the first time for a revamp the company said is necessary to speed Model S output and prepare it to make electric crossovers. Work to reconfigure the production floor at the former NUMMI plant in Fremont, Calif., began today and vehicle assembly resumes Aug. 4 with a goal of boosting production by 25 percent, Simon Sproule, a Tesla spokesman, said in an interview. Upgrades mainly involve modifications to the factory’s body and general assembly lines and will cost about $100 million, he said. “This represents the single biggest investment in the plant since we really started operations and enables us for higher volumes,” Sproule said. “It gets us ready to build X and to do it on the same line as the S.” 30 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
Fear and anxiety often come about because of a lack of understanding. A vague pain in the body can cause all kinds of wild speculation about what might be going wrong, but once the pain has been diagnosed and a remedy has been prescribed, most fears will be alleviated unless the pain is truly related to a life-threatening condition. Similarly an engine noise or other inexplicable noise in a customer’s car can raise all kinds of fears about serious problems until the exact reason for the noise is known and the necessary repair specified. Educating a car owner still suffering from the shock of a recent accident may not be an easy task, but it can be by far the most effective sales tool to ease the person’s fears and doubts. An old proverb says: I hear, I forget. I see, I remember. I do, I understand. When fear or anxiety is present, solid contact and sensory perception will have a much stronger impact than
words. Perhaps this goes back to childhood when we frequently fell and bruised ourselves. At those times, a loving mother held us, rubbed the sore spot or kissed the injured part. While there were probably words of reassurance, the physical touch is what we most remember as alleviating our shock, our pain, our fear and anxiety. It might be a useful sales tool to have a damaged part (like a fender or hood) and an identical perfectly repaired part set up as a demonstration prop. As part of doing an estimate and selling the job, it could be useful to have a prospective customer touch the damaged part and the repaired part to really feel the difference in paint finish, points where welds had been made, dents filled, etc. Prospects coming away with a solid sense of having touched an expertly finished end product should be less fearful of having work done where they have actually “experienced competence.”
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Social Media for Shops
Ed Attanasio is an automotive journalist based in San Francisco, California. He can be reached at era39@aol.com.
Is Your Shop Afflicted by Phonitis? Call the Telephone Doctor! with Ed Attanasio
Since my recent column about how the returned phone call is a lost art, I received several emails and even some phone calls about the subject. It seems that unprofessional phone manners are rampant in all industries, including collision repair. So, I decided to call the doctor and get more advice about the topic that I can pass it on to our body shop readers. The doctor is Nancy Friedman, a keynote speaker/author and the founder and President of Telephone Doctor Customer Service Training in St. Louis, MO. Friedman has appeared on the Oprah Winfrey Show, Today Show, CBS This Morning and Fox News and has spoken in front of groups of automotive professionals, including Big O Tires, Carstar, Goodyear, Tuffy, Grease Monkey, Tire Pros, the Alliance of Automotive Service Providers and a wide range of other auto dealerships and automotive-re-
lated manufacturers. She’s been a featured speaker at SEMA for seven years and will be there this year again as well. Fittingly, I called Friedman on the phone and she called me back—promptly—for this interview.
Q: Hello Nancy. Why is there such a problem nationwide with people who don’t seem to know how to act on the telephone (or care)? NF: Anyone can answer the phone effectively, if they’re properly trained. I don’t care what their title is; it does not matter if they’re the president or a tech. There are a lot of top-level managers out there who don’t know how to answer the phone. The problem is that most employers point at the telephone and tell their people to smile and be nice. They don’t put any emphasis on that part of their business, and untold millions of dollars are left on the table as a result. We believe in a sim-
ple phone answering approach and uniformity is crucial. I don’t care if you have 3 or 300 people answering the phone—you need to have everyone doing it the same way. Some companies are able to have 1–2 people answering their phones, but for small body shops, that’s not Nancy Friedman always possible. is known as the You would you Telephone Doctor hire a technician —a keynote and not train them speaker/author to do their job, so and the founder and President of why not train Telephone Doctor someone on the Customer Service phone? This is not Training in St. surgery or rocket Louis, MO science and we do have some very useful tips we offer to our clients, but most of what I teach is just common sense. Most of
the body shops we work with use our online training (www.ServiceSkills.com), which contains a lot more than just how to answer the phones, such as conflict resolution, management skills, leadership skills—it’s a full-service training and any employee that has to deal with the public on even a semi-regular basis should go through this training.
Q: How bad is it, because I personally encounter bad phone protocol almost every day? NF: No, you’re right, it’s bad. Before I go to speak at any company’s conference, I do some mystery calling, to find out how they answer the phones and sometimes I am surprised how bad it is. With many phone calls, your company has one shot to get that business and by fumbling that first interaction on the phone, it can cost you money and most of the time you’re not even aware of it.
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Q: How about those companies that leave callers on hold for long periods? NF: People ask us, how long is it okay to leave people on hold and we tell them that it’s not how long you leave someone on hold, but how you handle it when you’re busy. In the reality of today’s business world, people are going to have to be put on hold and it’s not avoidable in many cases. The important thing with people on hold is communicating with the person on the other end of that phone line. Let them know how long you think they will be on hold. “I have one other caller ahead of you and it should only take 2–3 minutes.” Full disclosure goes a long way, believe me. If it’s going to take longer, ask them if you would prefer to take a message and call them back. People get upset when they sit on hold without any updates or interaction, so if the person answering the call can check in, that’s preferred. But to say, “I’ll be back with you in a second,” well usually that ends up being a big fat lie, because nothing takes a second.
Q: How about my pet peeve, the unreturned phone call? NF: People ask me all the time— Nancy, what do you think about peo-
ple who don’t return phone calls or emails and I tell them—not much. With an e-mail, it’s even easier to respond. All you have to do is give them a one-word answer if you’re busy. It boggles my mind when I find out that some people never return phone calls. Assuming what people want is always a mistake, because you can’t find out what someone wants until you communicate with them. How many people have lost out on opportunities because they made assumptions and never returned a phone call? Countless.
Q: Some companies have their phone people using scripts. Do you recommend this? NF: We used to give scripts to people to read over the phones, but we found out it really doesn’t work, because these people aren’t actors and it sounds too rehearsed. Plus, it’s scary for them to have to memorize it and we always want people to sound natural on the phone. So, we give them talking points and allow them to say it their way and it works very well.
Q: Give us a takeaway that we can use, Nancy—one tip that can make us to be better on the phone.
NF: The #1 mistake is that people are not friendly enough on the phone. It’s that simple. It’s not with just auto body shops, it’s across the country. But, once companies find out that there’s money connected to that phone call, people suddenly get friendlier. It takes specialized training and a specific mindset to achieve, but once they realize the value in handling the phones properly, the light goes on! I tell people to start smiling before answering the phone, even if it’s forced smiling, because it improves the voice quality and energy to prevent emotional leakage. A phony smile is better than a real frown, I tell people. Negative audibles like the “big sigh” or verbally chewing gum are the first steps toward poor customer service, so continually let your customers know that you are “delighted” to help them first, to set the stage, before telling them negatives, if any exist.
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National Autobody Parts Warehouse’s CSI Ratings
National Autobody Parts Warehouse, Inc. in Grand Prairie, TX recently underwent another successful independent audit of the ISO 9001 standard for warehouse and distribution of automotive replacement parts. Results of the Customer Satisfaction Index survey, ranked National Autobody Parts Warehouse, Inc as outstanding in the areas of: overall performance, quality, delivery performance, responsiveness, cost and communication. “We are achieving our mission of providing the best service along with the highest quality parts and accessories at the most competitive prices by having an independent review and setting ourselves to a higher standard. This ensures greater success for all of our customers.” said Mike Dolabi, president. “We understand the importance of cycle time and want our customers to have the best possible parts with expedited delivery service. To offer the best quality, we hand select our manufacturers and offer NSF and CAPA certified parts priced competitively to non-certified parts.” Dolabi continued.
www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 33
Industry Insight with John Yoswick
—John Yoswick is a freelance writer based in Portland, Oregon, who has a body shop in the family and 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.
How Average Labor Rates Have Kept Up With Inflation Varies by Market Recent government data (see sidebar below) show that for a 5-year period ending early this year, the overall cost of autobody repair barely exceeded inflation over that same period (with the price of auto insurance rising even more during that period). But have shop labor rates—excluding the parts and other costs that make up overall repair costs—kept up with inflation? Some shops say there has been no change in the “prevailing competitive labor rate” in their market for three, four or even five years. Based on data from CCC Information Services, comparing national labor rate averages in 2013 to those averages in 2006 shows that for the most part, labor rates (when looked at on a national basis) aren’t keeping up with the overall U.S. inflation rate for that time period. Take the national average rate for mechanical labor in the U.S., for example. In 2006, the average mechanical labor rate was $67.56, according to CCC; by last year, the average had increased about 14 percent to $77.04. But that’s about $1 less than the average would need to have been last year just to equal overall inflation since 2006. Body and paint rates increased about 11.4 percent over the period, compared to an overall inflation rate of 15.6 percent; that meant the national average body rate for last year ($46.12) was about $1.74 less than it would have been if body labor rates
had kept up with inflation since 2006. The news was even worse for frame labor rates, which rose just 10.2 percent over the period, making last year’s national average ($52.43) more than $2.50 lower than it would have been if it had kept up with inflation.
than they have in other markets? Similar comparisons to inflation can be done using historical labor rate data provided by shops. One shop in Northern Virginia, for example, reported a body labor rate of $28 in 1999; the shop owner felt certain that an in-
If there was any initially-positive news for shops in terms of rates versus inflation it involved paint materials. The national average rate for paint materials last year was $26.64, according to CCC. That’s up about 19 percent from 2006, making it about $1 higher last year than it would have been had it only kept up with inflation. But most shops say their costs for materials has outpaced inflation by even more than that from 2006 to 2013.
crease that averaged about $1 year (to the current labor rate of $44) couldn’t have kept up with inflation. But in fact, if adjusted only for inflation since 1999, the shop’s labor rate today would
be about $39.84, more than $4 less than the shop’s current rate. The news was less good for a Portland, Ore., shop whose hourly body and paint labor rate has risen from $40 in 2002 to $48 this year; adjusted solely for inflation since 2002, that shop’s rate would be $52.71. That shop’s paint materials rate has just kept up with inflation (though again, paint prices have likely outpaced inflation), but its current frame rate ($52) is $7 shy of keeping up with inflation since 2002, and its mechanical rate ($75) is $10 less than it would be if adjusted just for inflation. To the south of Portland, the current mechanical labor rate ($62) reported by a shop in the Eugene-Springfield area in Oregon is actually running ahead of inflation over the 15-year period. But the other labor rates in the market haven’t kept up with inflation. Frame labor was See Average Labor Rates, Page 38
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Market-by-market comparisons Labor rates continue to vary widely market by market throughout the United States, so have rates in some markets kept up better with inflation
Inflation and the overall price for auto insurance, body work
CollisionWeek (subscription required) regularly reports government data showing how the price of autobody repair and auto insurance have risen in comparison with inflation. The autobody figures account for all costs for that service, not just labor rates. Over five years ending in January of this year, for example, the cost of body work had risen 12.7 percent, just ahead of overall inflation (11.9 percent) for that period. But auto insurance prices had jumped a whopping 22.4 percent for that same period. For comparison, during that same 5-year period, new car prices were up 6.7 percent, and the cost of vehicle maintenance and repair (mechanical) was up 9.5 percent. 34 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
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Lean Operations
David Luehr is the owner of Elite Body Shop Solutions, LLC, a collision business consulting firm based in Nashville, Tennessee. He is a 30 year veteran of the collision repair industry. David is an expert in Body Shop Operations and specializes in Lean, and Theory of Constraints methods. Email him at dluehr@msn.com
The Wrong Bonus Plan Can Be Much Worse than None at All with David Luehr
In my article The Process of Winning (see Autobody News, June 2014 edition or in my column section of the Autobody News website) I briefly explained why it is important for collision shop leaders to reward the vital behaviors that contribute to a proven process being carefully followed instead of only offering incentives for end results. In this article I am going to expand on this idea as well as challenge the thinking on what a good bonus program should look like. Let me be clear about one thing, this article is not referring to technician commission systems, but instead the bonus, or incentive plans that are used as an attempt to motivate managers, estimators and other administrative staff. When it comes to technicians I have conflicting views on commission systems, but mainly support them unless they are tied to a bad bonus plan.
I will illustrate my points by beginning with a story. Once upon a time, a body shop owner that I worked for approached me about creating a new employee bonus program for his company. “What is
people to be happy, but they still don’t seem to appreciate it.” After spending considerable time interviewing the employees of this sizable MSO, there were several things I discovered.
“The best use of money as a motivator is to pay people enough to take the issue of money off the table… But once we’ve cleared the table, carrots and sticks can achieve precisely the opposite of their intended aims.”
—Daniel Pink, Drive: The Surprising Truth About What Motivates Us
wrong with the bonus program we have now?” I asked. He told me “Every time someone doesn’t make bonus, they are ticked off at me!” Then he confided, “If the estimators come close to meeting their sales and CSI objectives I usually give them some money anyway as a kind gesture, I want my
36 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
1. Almost every admin employee had a slightly different bonus plan than the next guy or gal. 2. Many admin employees said they had given up trying to reach the benchmarks and felt they were set too high. 3. All admin employees felt that they
didn’t have enough control over the factors leading to their bonuses, thereby making it “unfair.” 4. Most employees complained that company leadership changed their bonus plans often, sometimes two or three times a year. Some employees said they felt like the bonus plans would change whenever it was convenient for the company to “bilk” them out of their money. 5. Employees acknowledged that the bonus plans caused motivational silos which caused them to sometimes perform well at things they are being measured for, but poorly at those they were not being measured on. 6. When pressed a little, most of the employees said that the bonus plan was more of a de-motivator than a motivator! So it seems the boss was right! The employees not only were unappreciative of his “kind” gestures, many were absolutely fed-up and ready to
look for another job! How could something intended to motivate the employees have the complete opposite effect? With so many problems in play, it was difficult to determine which employee complaints were justified and which were just lazy employees looking for an excuse. Either way, it was clear the current admin bonus plan was creating a lion’s share of the discontent. Although it took me several years of failed incentive programs to figure it out, I now know there are several forces at play here that can make these systems fail miserably. Here’s what the boss unknowingly did wrong.
● Employee bonuses made up too large a percentage of overall wages, so if employees didn’t make bonus, they didn’t have enough money to pay their bills. Understandably they felt punished. ● A handful of the employees felt that management was not paying them what they had agreed upon when hired. ● Created unrealistic benchmarks for people to reach without considering market fluctuations and unforeseen circumstances. ● Held people accountable and incen-
tivized only on end results such as outcome KPIs. ● Jeopardized the whole system by breaking the rules and giving out partial bonuses to key people. Even though the boss did several things wrong, many pieces of his bonus program closely resemble those found in many collision businesses in this country. Results-based admin bonus programs are extremely common in many industries because on the surface they seem to be fair and just. Who could find fault with a system that is as old as time and that pays people based on the results they produce? I’ll tell you who. The millions of hard working people that are negatively affected by this madness every day! If you think that I am being overly dramatic, ask yourself this question. What are we trying to accomplish by offering a cash-based incentive program? What is the goal? Although there could be many goals, most would list the following two most basic and worthy goals.
1. Motivate the employees to get results, KPIs, Sales, etc. 2. Attract and retain good people If these are your goals as collision
shop leaders, are you happy with the results your bonus program is contributing towards reaching these goals? If so, congratulations! Everyone else may want to read on.
Solution #1 - Become Process Driven What behaviors are we really trying to influence? If the goal is to produce good results, then management needs to look at the individual tasks that make up the processes. So if a shop has crummy processes, then wouldn’t it be unfair to hold people accountable for the results produced? Since it is the individual tasks of the process that determines the outcome’s success or failure, then individual task execution should be where management looks closely for the vital behaviors to take place. Let me give you an example. Blueprinting a vehicle is a very important process to achieving desired results. If people fail at Blueprinting, there is a good chance that CSI and cycle time metrics could suffer. The guy doing the Blueprinting probably knows this fact whether or not you are giving him a bonus. The question is this: Does the guy doing the Blueprinting know what specific tasks are
involved to ensure a consistently accurate repair plan? What vital behaviors does he need to execute?
1. Review vehicle check-in sheet 2. 100% meticulous disassembly 3. Photo documentation 4. Separate good parts from bad parts on table 5. Use group sequenced arrow down method in estimating system 6. Load parts cart, separating good/bad parts 7. Verify Blueprint accuracy on printed estimate to repair 8. Go over completed Blueprint with technician If the Blueprint guy properly follows these eight steps, one can expect a consistent quality standard every time. So if management wants to incentivize him and change his behavior for the better, they would want to tie these eight specific tasks to his incentive, not some outcome he has limited control over like cycle time or gross profit. Yes he has some control over cycle time and gross profit, but he has ALL the control over following the proper process in Blueprint. Use your own creativity; what would you do to ensure that all the vital behav-
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iors of Blueprinting were being followed? What could you do to reward him or her?
Solution #2 - Identify What Truly Drives Motivation What is truly important to our employees? The reason most bonus plans fail is that they actually demotivate the staff! In Daniel Pink’s book, DRIVE, he states: “The best use of money as a motivator is to pay people enough to take the issue of money off the table… But once we’ve cleared the table, carrots and sticks can achieve precisely the opposite of their intended aims.” Pink is right. In fact, scientific studies have revealed that when you use rewards expecting to gain the benefit of increasing another person’s motivation and behavior, they often incur the unintentional and hidden cost of undermining that person’s intrinsic motivation toward the activity. This problem is severely compounded when management gives employees a bonus for routine work, and then takes it away from them later on while performing the same work. This causes the employee that once was happy to perform his job at his regular pay, to Continued from Page 34
Average Labor Rates
$44 per hour in 1999, meaning it should be $62 now to have kept up with inflation; the shop reported a $55 frame labor rate currently. The shop’s current $50 body and paint labor rate is about $4 less than it should be if it had been adjusted only by the overall inflation rate since 1999. Rates reported by an Iowa shop in the Quad Cities area are a bit closer to keeping up with inflation since 1999. At $58 per hour, the current body and paint labor rate is $1.77 lower than had it risen 42.3 percent (as overall inflation has) from what it was in 1999. Frame labor rates are also about $2 behind, but the paint materials rate has actually risen 50 percent since 1999, putting it almost $2 higher than it would be based solely on inflation. A shop outside of Newark, N.J., had body and paint labor rate data back to 1989; with inflation, the $30 labor rate in 1989 would have grown to more than $57 today, which is about $10 more than most insurers there are paying today, according to the shop.
now be discouraged and unappreciated performing the same job. So what can leaders do to motivate employees? From the dozens of studies I have read there is one important thing that appears on every list. People want to be RELEVANT. Everybody wants to feel that what he or she is doing will make a difference. If leaders want to have a motivated work force, start there! Top leaders figure out
opinions and ideas freely. This will help people become relevant. ● Read these books, available at Amazon.. ▪ Drive—Daniel Pink ▪ Influencer—Patterson, Grenny, Maxfield, McMillan, Switzler. ● Leaders need to listen to people carefully. What are they actually saying? It may not be what you think you’re hearing.
how to tie employees’ values to vital behaviors that will then produce the desired results you are after. There will never be an incentive program that can make up for the lack of proper management and leadership! There are many ways to connect to employees’ intrinsic needs and thereby motivate them. Here are a few suggestions:
● Praise work being done correctly more often than you may think necessary. Praise from someone not known for offering it is much more powerful than you may realize. ● Punish those that violate your company’s values. ● Make relevance more important than monetary rewards. ● Consider re-evaluating bonus plans to be more in-line with employee values and critical processes, or just eliminate them altogether and pay people what they are worth. ● If you insist on a bonus system,
“Top leaders figure out how to tie employees’ values to vital behaviors that will then produce the desired results you are after.”
● Give small tokens of appreciation such as $10.00 gift cards for properly following key processes. ● Make the workplace a safe environment for everyone to contribute their A shop in a smaller community in north central Pennsylvania had data showing its body and frame labor rate is up 4.3 percent since 2011, and its frame and mechanical rate is up 3.8 percent; all of that falls short of the 5.4 percent rate of overall inflation since 2011.
Check your own rates Want to do your own comparison? All it takes is historical information about your labor rates going back three, five, 10, 20 or even 30 years. Gather that data and then find one of the many online “inflation calculators” (for example, www.usinflationcalculator.com). There you can indicate the oldest year for which you have data, enter one of your labor rates for that year, and hit calculate. The website will show you what the inflation rate has been since that year, and what you labor rate would be today if it had been adjusted based only on overall inflation in the United States.
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make sure the bonus is 10% or less of overall wages. Many readers may not like or agree with these “soft skills” being used in place of the old dependable bonus plans that we are used to, but we are not living in the old days any longer. When holding on to these antiquated ideas, it is easy to see why many in our industry find difficulty understanding the new generation of worker and what truly motivates them. When leadership does not provide the employee with what they are truly hungry for intrinsically, eventually it becomes only about the money for them. In other words, because many lack the necessary leadership skills, they use extrinsic motivators instead to get the job done and often with mediocre results. As Daniel Pink pointed out “The best use of money as a motivator is to pay people enough to take the issue of money off the table.” This article is rooted in behavioral sciences that are factual not merely my opinion, however, it is my opinion that the era of the iron-fisted manager is nearing its end. Those that embrace modern leadership skills have the best chance to prevail.
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National Associations with Chasidy Rae Sisk
Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at crsisk@chasidyraesisk.com.
ARA Holds ‘Hill Days’ to Discuss Industry Concerns with Congress On June 18 and 19, professional automotive recyclers from over 20 states gathered in Washington, DC to participate in the Automotive Recyclers Association’s (ARA) annual Capitol Hill Days. As the group met with their Members of Congress to educate them
Rep. Darrell Issa accepting the ARA Congressional Champion Award on Hill Day
about the automotive recycling industry, ARA members requested support from federal representatives to require automotive manufacturers provide OE parts data to recycled parts inventory
management systems, inclusion of recycled OEM parts in repair options for vehicles in the Federal Fleet, and for the Environmental Protection Agency (EPA) to continue relying on best management practices to control stormwater pollutants. According to Michael Wilson, CEO of ARA, “Much interest was generated from these visits. Specifically, members of the Michigan, Ohio and Kentucky congressional delegations expressed interest in helping ARA advance these issues as well as discussed touring professional automotive recycling facilities when they were back in their districts.” Following these visits, a Small Business Administration official and representatives from two major national business associations formed a Business Panel in the House Budget Committee hearing room, giving ARA members an opportunity to ask questions about health care, tax reform, re-
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cycling, and regulatory burdens on small businesses. Recyclers participating in ARA’s Hill Days consisted of both returning members and first-time participants. Wilson notes, “ARA members look forward to this annual event to reconnect with their legislators and to update them on issues affecting the industry on the national, state and local levels. Those automotive recyclers who are frequent Hill Day attendees enjoy visiting with members and staff who are now familiar with the profession and our issues…Issues surrounding automotive manufacturers’ recalls and the safety ramifications surrounding those vehicle parts have been all over the news and have generated much interest within the entire automotive sector. This provided a critical opportunity for professional automotive recyclers to talk with policymakers about their need for those OE parts numbers.”
(l to r) Ricky Young, ARA First Vice President and Ed MacDonald, ARA President
long efforts to elicit congressional support for critical issues impacting the industry. Often, the relationships formed during Hill Days allow for working more closely with Congressional repre-
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As the only professional association whose sole purpose is to promote a fair, open marketplace for OEM recycled parts, ARA holds its annual Hill Days as a means of reinforcing year-
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sentatives when they return to their districts, and it gives politically active ARA members a means of meeting more effectively at a federal level. Wilson adds, “ARA members are uniquely qualified to communicate with policymakers to help them understand the value of recycled automotive parts and make sure they have access to valid, reliable information about the industry. When professional automotive recyclers speak with one consistent voice, our industry has more influence, and the efforts of ARA staff to represent the profession here in Washington are strengthened. For example, ARA staff recently made nearly two dozen visits to Congressional offices about automotive manufacturers’ recalls and the safety ramifications surrounding those vehicle parts. Having ARA members up on the Hill to further engage their elected officials about this issue helps keep the pressure on automakers to make this information available.” Since their event, ARA has received positive feedback from attendees. ARA members were on the Hill mere hours after General Motors CEO Mary Barra testified a second time about the massive ignition switch recall, and ARA published a press re-
lease urging GM to adhere to their “New Industry Standard for Safety” by providing recyclers with access to important OEM parts data. Nearly a third of ARA members’ visits were with actual Members of Congress. “Coincidentally, many of our members’ Hill appointments were scheduled at the same time that Republicans met to elect a new House
objectives. ARA staff is now in the process of following up with the Congressional offices that were visited.” Representing over 1200 professional automotive recyclers, through direct and affiliated chapters in the US and 14 countries internationally, ARA has found that, though their members’ business models are all unique, there is a lot of commonality in the issues fac-
(l to r) Michael Wilson, ARA CEO; Rep. Darrell Issa; Ray Colas, LKQ Director of Government Affairs; and Herb Lieberman, LKQ
Majority leader after Eric Cantor’s stunning defeat,” Wilson recounts; “however, the energy and adrenaline caused by the impending vote helped drive conversation about the future of the congressional Republican leadership, and many ARA members were able to engage in dialogue on this issue in addition to ARA’s prepared policy
ing the profession. Wilson believes that association-sponsored events, like Hill Days, bring recyclers and industry supporters together, and “there is no better way to prepare for future success, learn of new products, programs and services, discuss the top issues impacting the profession, and network with industry partners than by joining with col-
leagues at these events. Since our members are so geographically diverse, these events allow for professional automotive recyclers and their industry partners to meet face-to-face to discuss and plan how best to address the latest challenges and opportunities. By coming together at these annual association events, recyclers grow stronger and present a lucrative profession to the industry.” Next on ARA’s agenda is their 71st Annual Convention and Exposition which will be held October 22-25, 2014 at the Gaylord Opryland Resort and Convention Center in Nashville, Tennessee. According to Wilson, “ARA leadership continues to enhance the quality of this event and has assembled top-notch speakers, focusing on the tools needed to achieve long-term success and the broader trends impacting the entire automotive parts market.” Visit www.araexpo.org for more information on the Convention or to register to attend. ARA 9113 Church St. Manassas, VA 20110 571-208-0428 www.a-r-a.org
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The Legal View with Jennifer Driscoll-Chippendale
Jennifer Driscoll-Chippendale is a partner in the Antitrust and Trade Regulation practice group in Sheppard, Mullin, Richter & Hampton LLP’s Washington, D.C. office. Ms. Driscoll-Chippendale has counseled international clients about antitrust laws relating to mergers and acquisitions and represented both corporations and individuals in the Antitrust Division’s investigation of the auto parts industry.
What Does the First-Ever Extradition on an Antitrust Charge Mean for the Auto Parts Investigation? On April 4, 2014, the U.S. Department of Justice, Antitrust Division announced a milestone victory, having successfully litigated its first extradition for an alleged antitrust violation.[1] Romano Pisciotti, an Italian national and former Parker ITS Srl executive, was extradited from Germany for his involvement with the marine hose cartel, almost seven years after the Division began its investigation with raids in Houston, Texas on May 2, 2007. Pisciotti was arrested in Germany on June 17, 2013, and surrendered to the U.S. authorities under the terms of the U.S.-Germany extradition treaty, which provides for extradition where the alleged offense is punishable under both German and U.S. federal law. Prior to Pisciotti’s case, in 2010, the Division won a protracted battle to extradite Ian Norris, formerly the Chief Executive Officer of Morgan Crucible, who was alleged to have fixed the prices of carbon products and concealed evidence relevant to the Division’s investigation. In contrast to Pisciotti, Norris was turned over the U.S. authorities solely on the basis of the obstruction charge because pricefixing was not a crime in the United Kingdom during Norris’ alleged misconduct. Another significant difference was Norris’ tortuous extradition process, which was heard at least once by all three English courts and spanned seven years. In the end, Norris was sentenced to 18 months in prison, which he served at Rivers Correctional Institution until his release in November 2011. As the Division continues its largest ever criminal investigation of the auto parts industry,[2] Pisciotti’s case serves as a cautionary tale in several respects. First, Japan should not be considered a “safe haven” for individuals seeking to avoid prison in the
United States for obstruction of justice or criminal antitrust violations. The extradition treaty between the United States and Japan allows extradition for any offense that is listed in the treaty and is punishable by one year of incarceration in both countries. Obstruction of justice is a basis for extradition under this “list approach.” As a result, Japanese residents accused of obstructing justice in the auto parts investigation are easy targets under the express terms of the treaty. The U.S.-Japan treaty also incorporates the “dual criminality” rubric, which includes any offense that is punishable by one year imprisonment under the federal laws of the United States and the laws of Japan. Therefore, cartel misconduct also qualifies as an extraditable offense because (i) in the United States, an individual who participates in cartel activity faces up to 10 years in prison; and (ii) Japan now imposes up to five years imprisonment for cartel offenses, although individuals have received probationary sentences, rather than actual prison time, in Japan thus far. For the 19 individuals indicted in the auto parts investigation, the vast majority of whom are resident in Japan, the Pisciotti extradition is a shot across the bow. Empowered by its recent success with Pisciotti, the Division could soon pursue extradition of one or more Japanese nationals both to reinforce the seriousness of its agenda and to encourage culpable individuals to voluntarily go to prison in the United States rather than attempt to avoid punishment by remaining in Japan for the rest of their lives. But considering the evolution of antitrust law in Japan, it is not a foregone conclusion that Japan would agree to extradition solely on the basis of antitrust misconduct. Enforcers in Japan have only recently embraced
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the idea that cartel activity should be regarded as a criminal offense and did not have a leniency program until 2006. On the other hand, by increasing the potential sentence from three to five years, the 2009 Amendments to the Anti-Monopoly Act—Japan’s antitrust law—divested the sentencing court of the power to impose probationary sentences in lieu of actual prison time, signaling that criminal antitrust violations will be treated more severely in the future. To the extent that passage of time lulls individuals living abroad into complacency, the examples of Ian Norris and Romano Pisciotti cases should dispel any notion of comfort. In both instances, the Division tenaciously pursued these individuals for years and, in Norris’ case, outlasted the twists and turns of contradictory U.K. court rulings. Given the high
the Division should be expected to take the same measured approach if it makes an extradition request to Japan. In sum, for individuals facing antitrust charges in Japan and elsewhere, the Pisciotti extradition should underscore that one never truly lives beyond the Division’s grasp. 1] See Press Release, U.S. Department of Justice, First Ever Extradition on Antitrust Charge (April 4, 2014). [2] See Sharis A. Pozen, Acting Assistant Attorney General, U.S. Department of Justice, Antitrust Division, Remarks as Prepared by Acting Assistant Attorney General Sharis A. Pozen at the Briefing on Department’s Enforcement Action in Auto Parts Industry (Jan. 30, 2012). This article is reprinted by permission of the author who retains all rights and priveleges.
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Historical Snapshot with John Yoswick
—John Yoswick is a freelance writer based in Portland, Oregon, who has a body shop in the family and 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.
Slippery Labor Rates, Cost Shifting, Benchmarks, Sterling Autobody 20 Years Ago in the Collision Repair Industry (August 1994) Not too many consumers are told, “We charge you for ‘x’ hours even though we know it’s only going to take ‘y’ hours because our labor rate is only a percentage of what it should be if we charged you for ‘real time.’ “The system by which our industry gets paid to do what we do is terribly antiquated,” Kansas shop owner Bill Eveland says. “It’s basically a joke.” California shop owner Erick Bickett agrees that a less “slippery” system would make explaining repair costs to customers much easier. “If we defined that our charges are based on some standard way of calculating, I would have something other than a story to tell them,” Bickett said. “A definition would help add credibility.” If it’s hard to feel credible explaining labor times to a customer,
think about explaining it to a federal judge. A shop in Tacoma, WA, facing charges of fraud, opted to settle outside of court earlier this year, in part because the shop’s attorney felt it would be difficult to explain in court how the industry charges for its work.
In 1994 California shop owner Erick Bickett was among those critical of the way shops calculated charges, a system largely unchanged 20 years later. Bickett is now CEO of Fix Auto USA.
15 years ago in the collision repair industry (August 1999) Insurers and shops have jointly called for an end to “cost-shifting,” the practice in which all or some of the cost of one estimate line item is transferred to another. “Cost-shifting is a disservice to everyone,” John Loftus, executive director of the Society of Collision Repair Specialists said at the Collision Industry Conference. “If you write up an agreement with someone and put something
on there you’re not going to do to compensate for something you are going to do, it’s fraud. The ticket must clearly state what is going to be done.” Insurers at the meeting, held in St. Charles, IL, also issued a call for the end of the practice. “It’s something we all need to say no to,” said Ray Trevethan of the Auto Club of Southern California. “Insurance companies across the nation for years have helped create this system and we need to stop it. If we’re going to pay for hazardous waste [disposal], put it on the estimate and pay for hazardous waste [disposal]. “If you’re going to pay to bag a car, pay to bag the car and put it on the estimate as a line item. Trying to put it somewhere else is not proper.” —As reported in The Golden Eagle, August 1999. 10 years ago in the collision repair industry (August 2004)
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The nation’s largest auto insurer has no plans to join the other insurers setting performance benchmarks for shops participating in its direct repair program – but it may do more to help those 20,000 shops understand how their performance stacks up. George Avery, auto estimating consultant for State Farm Insurance, said his company looks for four primary things from the shops it does business with: competitive estimates, quality repair, accurate billing and customer service. But unlike some other insurers, Avery said, he doesn’t anticipate State Farm providing percentage targets for such things as alternative parts usage that Service First shops have to meet. “We are not interested in giving you a number to hit,” Avery said, during a panel discussion at the Collision Industry Conference (CIC) held in Chicago in early August. “We don’t feel that’s our place. We feel you are the best ones to determine, for example, what the recycled parts use should be based on your market area and availability.” Avery did say that State Farm is looking at ways to give shops more access to statistics to see how their
performance in key areas compares with other shops in order to help them remain competitive. He said the multishop businesses in the company’s “Select Service” program, which handle about 3 percent of the company’s claims nationwide, may soon have password-protected internet access to such performance numbers. There may be technical challenges to giving 20,000 Service First shops similar access, he said, but he’d like to find a way to give shops more ongoing feedback. “I think we’re going to lean more toward giving you more global information and letting you see how you compare to the market or to the state... so you can see where you fit and you can make decisions on how to move that number around,” Avery said. –As reported in Autobody News. About a year later, State Farm was rolling out its “dashboard” scorecard and beginning to convert its “Service First” program to “Select Service,” significantly reducing the number of participating shops.
5 years ago in the collision repair industry (August 2009)
A source within Sterling Autobody Centers, the Allstate subsidiary with 62 shops in 16 states, said the Pacific Northwest is among the regions in which it is actively searching for locations in which to open shops. The company does not generally buy existing businesses but looks for property or “open-box” buildings (usually about 12,000 square feet or larger) it can lease for its shops. Speaking on a panel at I-CAR’s recent conference, Sterling President Nick Notte said that based on the calls he receives “from repairers on a weekly basis wanting to sell me their businesses,” shop closures are resulting in “a lot of additional work out there to capture.” He criticized efforts in some states (successful only in Texas) to pass legislation banning insurerowned shops. “There are organizations in our industry that seem to have forgot-
Free
ten that this country was built on free trade and competition,” Notte said. He also said the slow-down at many shops has allowed his company to pick up trained employees leaving other shops. “So I want to thank all the repairers out there who donate those good people to us,” Notte said. Another panelist, Mike Quinn of Arizona-based 911 Collision Centers, appeared to be only half-joking when he told Notte it was only “the wrong ones,” the employees who couldn’t make it at his business, that might end up at Sterling. —As reported in CRASH Network (www.CrashNetwork.com), August 10, 2009. Despite the talk of growth, Sterling still had 62 shops this year when Allstate sold the company to Texas-based Service King. Quinn sold his seven 911 shops to Caliber Collision Centers in 2011.
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Ed Attanasio is an automotive journalist based in San Francisco, California. He can be reached at era39@aol.com.
Western Associations with Ed Attanasio
How UABA President Cory Stanger Sees the Industry As the collision industry demographic shifts to younger owners, people like Cory Stanger, 30, represent a new breed while assuming increasingly important leadership roles in their respective states and on the national stage. Stanger is the general manager at Alpine Auto Body in Salt Lake City, UT and the current President of the Utah Auto Body Association (UABA). His father Don started the shop the same year Cory was born and today runs the shops’ day-to-day operations.
Cory Stanger, 30, with his wife Kayti, is the new president of the UABA, a two-year-old professional collision organization consisting of body shop owners throughout Utah
“My parents ran the business together and I grew up here in this shop,” Stanger explained. “The first chance I had to help out, I was right there. I remember my dad used to have me cut cardboard into squares for him to spread body filler on the cars and that was one of my jobs at the shop early on. My father just kept teaching me new things--like how to do body work, prime, how to paint—everything one step at a time as he worked me into the business slowly. Eventually, I ended up in the front office, so it’s been a gradual evolution since I was about 7 years old. The things my dad taught me about hard work really are important and working at the shop is my heritage and something I really enjoy.” Stanger recently took the helm at the UABA, a two-year-old professional collision organization consisting of body shop owners throughout Utah. “We formed the UABA in 2012, when a group of shops got together and decided we needed one,” Stanger
said. “I am the organization’s second president and we’re really making a run at it. It’s tough out there, because we have a lot of DRP shops here in Utah, just like anywhere else. We have some DRPs at Alpine, but I don’t necessarily believe in the system. Most shops don’t like them either but realize that DRPs are a necessary evil in this industry.” Stanger isn’t afraid of the big bad insurance companies, especially when it comes to the quality of his repairs. “I’ve come to the conclusion that in no way will I ever be backing down to the insurance companies,” Stanger said. “My goal is to always make it better for the shops and the customers, by doing proper repairs and getting paid for proper repairs. That part of the industry will never go away. The insurance companies are always going to look for places where they can save money and the good shops are always going to push to do the repairs right, and we’re always going to be one of those shops.” Finding good, qualified technicians is a real problem in Utah right now, Stanger explained. “One of the things I’d like to change in this industry is the fact that there’s a real lack of qualified technicians here in Utah and from what I’ve heard from other shops in other states, it’s a problem that is industry wide. It’s a big concern for us, so we need to sit down and decide where these new technicians can come from. Should we invest in high school programs, junior colleges and tech schools, so that we can actually get people excited and want to enter this field? The schools in this country have forgotten about the blue collar jobs. Now they want to direct students to become lawyers and doctors in general. Sure, we need doctors and lawyers but we shouldn’t label blue collar jobs as being inferior. Part of the problems stems back to the insurance companies—we need to work harder to get paid more for what we do, so that we can pay our employees what they’re worth. Right now, if you’re on the outside looking in you’re thinking ‘hey—I can do okay in the body shop industry.’ I can do well if I really work my guts out, but
46 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
it’s not the easiest place in the world to make a living. So, we need to make it better for our employees and then we need to make the wages more attractive to people that are considering this industry as a viable career. If we can
Is steering by the insurance companies alive and well in Utah? We asked Stanger. “It has not been a personal directive of mine to go after steering and confront insurance companies about it—yet,” he said. “I often hear about steering techniques used by certain insurance companies from my customers. It’s the same old bag of tricks where they tell them things like you may pay more if you go to that shop and we will not warranty the work… on and on. I’ve made some bold moves with some insurance companies over the years and I’ve seen a huge reduction in Stanger is the general manager at Alpine Auto Body in work coming from those inSalt Lake City, UT surers. I know they’re very help people to receive the proper train- good at what they do and they obviing they need, I really believe that this ously won’t call it steering. It eventuis one of the biggest things we need to ally becomes obvious that they’re See Cory Stanger, Page 48 do to help this industry right now.”
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Continued from Page 46
Cory Stanger
re-directing work from my door, and I know the cause. It’s because I’m not always easy to work with from their perspective, because I push for proper repairs and then expected to be paid fairly for my work. So, I’ve seen work go away as a result, without a doubt. So, yes there is steering in Utah and it happens every day.”
Is Stanger planning for aluminum transition in the collision industry? “I think it’s tough for a body shop to keep up with all of the changing technology out there, but I am happy to embrace anything that will make the world a better place to live,” Stanger said. “Making cars lighter, in order to save fuel is admirable and I totally support it and want to be onboard for that. So, if we can achieve it with either aluminum or carbon fiber or with other materials—that’s great and we want to definitely be a part of that evolution. Only the automakers know what they’re thinking right now, and the big question I have is will alu-
minum be around for the long haul?” Stanger also wants unlicensed body shops to either get licensed or stop doing business, he said. “There are definitely some body shops in Utah right now that aren’t licensed and bonded as certified facilities and doing business as usual. The rest of us are doing it right and playing by the rules and these midnight shops are taking work away from us. We are looking at solutions to this problem and in conversation with the Division of Air Quality, who may be working with us. If we can get them to make the paint jobbers to sell products only to body shops that are licensed and bonded, maybe it will make it a little more difficult for these midnight body shops to do business in Utah.”
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Honda Releases Video Showing Slower Response on Airbag Deployment with Aftermarket Bumpers Honda has released a video highlighting results of independent crash tests conducted for the manufacturer that compare the crash performance of OEM and non-OEM bumper parts and how they impact safety systems. In a dynamic crash test, the driver side air bag was triggered seven milliseconds later on the vehicle with the non-OEM aftermarket part bumper parts installed than the vehicle with Honda parts installed. The passenger
air bag was triggered four milliseconds later on the passenger side with nonOEM parts installed. “Our intent in producing the video is to help consumers make an informed decision when they are getting their car repaired,” said Leigh Guarnieri, wholesale collision parts marketing manager. To view the video go to: https://www.youtube.com/watch?v=p 961-w6_I_I
Top Carriers and Collision Repairers Use Estimating Systems and Alternative Parts Programs to Reduce Cost Premiere Services, a leading provider of audio electronics now has alternative parts available through CCCOne, Mitchell, APU, and Parts Trader. Premiere Services Quality Repair Program (QRP) parts are OEM remanufactured parts that are tested, certified, and guaranteed to work upon delivery. The parts are backed by the industry’s only lifetime warranty. The parts are consistently priced at 50% off of OEM new. Laura Puente, President of Premiere Services said, “Dealerships
currently have a lock on this category. But, everybody wins using this program. Collision repair facilities win, with alternative parts usage, reduced cycle time and favorable ratings on re-inspections. Carriers win with a reduction in repair cost and total losses. Policyholders win with a lifetime warranty. Insurers and collision repair facilities interested in the QRP program can contact Premiere Services at 800479-9945.
Continued from Page 26
Authorization to Repair
sured be explicitly notified and that they authorize the use of used or aftermarket parts in writing. Next, the Repair Contract should indicate what damages were sustained in the collision, along with the repairer’s professional judgment on what needs to be repaired, and how much it will cost.
The Authorization to Repair Generally, the Authorization to Repair goes hand-in-hand with the Repair Contract; it serves to obtain written permission to repair the vehicle based on the terms of the contract. These two documents protect the repair facility from the insurance company by establishing the shop’s independence, their relationship with the customer, and their need to make a profit. When a repair is needed, the customer has the right to receive the best repair possible, but the repair facility also has the right to receive appropriate compensation for their hard work. Another thing pertaining to these three relationships that collision repairers should be aware of is that, since
it is the customer’s duty to pay for the repair, shops have no right to expect payment from the insurance company. It is the customer who must receive the repair estimate and provide authorization for the repair, but still, consumer protection is no longer about the cost – because insurers actually pay the repair bill most of the time, consumers’ concerns are centered around how their vehicle is being repaired. The Repair Contract provides for informed consent by obtaining the customer’s Authorization to Repair only after the repair process has been explained to them so they know exactly what is being done to their vehicle. When it comes to conflicts between the repair facility and the insurer regarding the repair estimate, the repairer’s opinion carries more weight because they are the professional, not the insurance company. If an insurer wants to exert total control over a repair, they can do so by electing to repair (provided state law allows them to do so), but they rarely choose this option since it leaves them 100% liable for the repair. As such, they will usually choose to handle the claim by paying for the damages or declaring a total loss. The beauty of the DRP contract
(for the insurance company, at least) is that it allows the insurer to exert more control over the repair without accepting liability, especially because of the indemnification clauses included in DRP contracts. Please take note: because state laws vary so greatly, it is a nearly impossible feat to compile all of the requirements pertaining to each individual state. Eversman’s advice is intended to assist you in getting started with the process, but it is absolutely imperative that you enlist the aid of a local attorney who can ensure that your documentation complies with all state laws and requirements. If you run into a situation where the insurer refuses to pay the full cost of the repair, there are methods you can take to secure payment, such as through an Assignment of Proceeds (more on this in Part 2 of this series), but it all starts with the Repair Contract and the Authorization to Repair, so invest in your business by enlisting an attorney to help you draft these vital documents and you’ll be on your way to receiving proper compensation from every repair.
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Power Coating Institute Sets Up Industry-Related Scholarships
The Powder Coating Institute (PCI) has announced its official establishment of an Educational Fund which is designated for the sole purpose of soliciting, recommending and approving scholarship awards to students who are pursuing studies in fields related to powder coatings. They must be attending an educational institution that offers studies related to the powder coating industry such as polymer science, manufacturing, or engineering. “One of PCI’s most important missions is to ensure a sustainable, well-trained future workforce as it relates to powder coating technology,” says Dave Lurie, PCI Executive Director. “This newly established education fund will help to connect current industry to the people who will create technology advancements in the future.” PCI’s Materials Technology Committee administers the Scholarship Request Program and works with the Executive Director of PCI and his staff to promote and solicit scholarship applications from students and educational institutions. The Materials Technology Committee will award scholarships based on criteria approved by the PCI Board of Directors. For details, visit www.powdercoating.org.
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Southwest Associations with Chasidy Rae Sisk
Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at crsisk@chasidyraesisk.com.
TIAA Fishing Tournament Held in Corpus Christi On Saturday, June 21, the Alamo Chapter of the Texas Independent Automotive Association (TIAA) held their annual Fishing Tournament at Doc’s Seafood and Steak Restaurant in Cor-
Louie Sirianni shows off his catch
pus Christi, TX. The tournament began at 6:30AM and concluded at 3PM with weigh-ins at 4PM, followed by a catered dinner, awards ceremony and raffle. Proceeds from the event benefit TIAA’s scholarship fund. Louie Sirianni, President of TIAA, states “the event was a great success. The weather was great, and the water was clear in Port Aransas. Attendees enjoyed the event. Aside from a successful day of fishing, the sponsors gave some big prizes. The ones who did not have luck on the water were able to win Yeti coolers, quality rod and reel combinations, Oakley and Costa sunglasses, Columbia shirts and all sorts of outdoor equipment. The biggest hit on the raffle was a junior size pink rod and reel – this was a family event, and all the girls were trying to win that rod and reel!” Sirianni credits Luke Harms of D&S Garage in San Antonio for arranging the entire event. “Luke and
his wonderful family provide all the volunteer labor, recruit all donations, and year after year, have made the event run smoothly.”
bers because “social media and busy work schedules tend to keep people away from true gatherings,” Sirianni believes. “This event, like others hosted by TIAA, allow automotive repair shop owners and their vendors to socialize with each other without talking about business. The pleasant surprise about this event is that it tends to draw the whole family out so participants can see that there’s more to life than just work. We can enjoy each other’s company, win prizes, and do some fishing, TIAA members had a blast on fishing tournament all while raising money to In fact, Sirianni thinks the fishing help young people enter our industry – tournament gets better every year. it’s like a party for our future!” On a state level, TIAA is currently TIAA met their goals for 2014 on participation and the number of boats en- undergoing some exciting changes. They’ve hired a professional Executered, and they intend to raise the bar tive Director and are updating the beneven higher next year. efits package they offer to members. These types of association-sponsored events are important for memSee TIAA Fishing, Page 55
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www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 51
Fentonville, PA, Food Truck Explodes, Propane Blamed
A food truck explosion near an auto body shop in the city's Feltonville neighborhood this afternoon left 11 injured and at least 2 critically. It happened just before 5:30 p.m. at 3rd Street and Wyoming Avenue. A propane tank on the La Parrillada Chapina food truck exploded while parked outside an auto body shop. A 40-year-old woman and a 25-year-old woman each suffered second and third degree burns and were transported to Albert Einstein Medical Center. Several other people were also injured and taken to area hospitals. Officials are investigating the cause of the explosion.
Snake Disrupts Operations at Rosebank, NY, Shop
Employees at a Rosebank auto-body shop saw a three-foot snake, possibly a venomous Eastern coral snake enter the shop, prompting alarmed employees to call the cops. But despite the thorough scouring by members of the NYPD’s Emergency Service Unit who arrived at Ripp Modifications on Lynhurst Avenue, the snake was nowhere to be found and, once the cops departed, the hunt was left to the employees.
Police Freeze Alleged Body Shop Radiator Thief
Looking to steal radiators from a Merrimac auto body garage, a New Hampshire man instead is looking at a potentially lengthy time behind steel bars following his arrest on July 12. Kevin R. Thompson, 31, of Newton, NH was captured by Amesbury police K-9 officer Thomas Nichols and his partner Achilles. Thompson was held on $5,000 cash bail following his arraignment at Newburyport District Court on seven charges including three felonies: receiving stolen property over $250, possessing a burglarious instrument and larceny over $250. He was also charged with resisting arrest, assault and battery on a police officer, disguise to obstruct justice and disturbing the peace. Among the crimes he is accused of committing are: possession of a burglarious instrument, shoplifting over $100, assault with a dangerous weapon and giving a false name to police. Merrimac police officer Richard Holcroft spotted a silver SUV backed up against the side of Sloban’s Auto Body on Broad Street around 4:45 a.m. Achilles found Thompson and the radiators.
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52 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
PA Jury Orders Honda to Pay $55.3M Rollover Claim
A jury ordered Honda Motor Co. to pay $55.3 million for a rollover accident that left a Pennsylvania man paralyzed, but the car company said immediately it would appeal. Lawyers for Carlos Martinez, 57, of York, argued during a nine-day trial that a faulty seat belt design in his Acura Integra caused the permanent injuries he suffered in 2010. Martinez was driving to work in suburban Baltimore when a tire blew out and he lost control of the car, said his attorney, Stewart Eisenberg. The seatbelt failed to prevent Martinez’s head from hitting the roof of the car as it rolled over, the lawyer said. Acura is a division of Honda. A spokesman for the company denied any problems with the “proven restraint system used by virtually every manufacturer.” “The evidence here clearly established that there is no vehiclebased defect that caused Mr. Martinez’s injuries,” Honda spokesman Chris Martin said in an emailed statement. Eisenberg contended Honda knew such an injury was possible based on seat belt testing it conducted in 1992.
CARSTAR Held 2014 Puerto Rico Conference in June
The four-day 2014 CARSTAR Conference and awards ceremony, which ran until Tuesday, June 24, celebrated the company’s 25th anniversary and was themed “Gaining the Edge.” Speakers from I–CAR, Hertz, 3M and more gathered at the El Conquistador Hotel over four days to talk about topics ranging from strategic planning to technical education. “This is the most dynamic collision industry event of the year where store owners, business leaders, vendor partners and insurance companies come together to help build the collective industry for the future,” said David Byers, CEO at CARSTAR. “This is the largest MSO network event of the year, with an incredible lineup of speakers, education events and networking opportunities exclusively for the CARSTAR store owners. This is just one of the many resources we provide store owners in the CARSTAR family, and a powerful tool for them to help them gain the edge, grow their business and improve their operations.” Speakers and VIP guests for the conference included: Mike Anderson, founder of CollisionAdvice.com, and Vince Romans, founding partner of The Romans Group.
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U.S. Senate Commerce Chair Proposes Auto Safety Bill, Increases Highway Safety Authority
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www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 53
An Interview with Georgia Attorney Gene Brooks on Short Pays by Chasidy Rae Sisk
Short pay lawsuits are an increasingly prevalent trend in the collision repair industry throughout the country. After learning of a recent $40,508 victory against State Farm by a customer of GA’s Hernandez Collision Center, (see autobodynews.com), I decided to interview Gene Brooks, the attorney who won the case, to get a better understanding of the issues.
How often do you work on short pay lawsuits? The National Board I have been workof Trial Advocacy ing on these cases (NBTA) has recogfor about a couple nized Savannah of years now. We attorney Eugene C. Brooks, IV, for 20 are set to try our years of certificafifth case next week tion in civil trial and have others set advocacy on trial calendars for the rest of this year and going into next year.
Why was this lawsuit necessary? State Farm rejected Ms. Roberts’ presuit demand for settlement of her claim. State Farm had refused to pay over $4,000 in repair costs due, paying only about 60% of the repair costs.
Did the Hernandez Collision Center educate you or the customer on consumer rights? The issue of consumer rights is a matter of Georgia law, so that was learned from Georgia law and insurance regulations. Hernandez Collision Center has educated me on the responsibilities of the repair shops to return a damaged car back to its pre-accident condition and on the process of repairing a car. Learning the particularities of vehicle repair has been a challenge.
What role did Hernandez Collision Center play in Japonica Roberts’ case against State Farm? Hernandez Collision Center was the repair shop that repaired Ms. Robert’s vandalized car. As the repair shop, Hernandez Collision Center personnel provided testimony on the scope of the necessary repairs and testified on industry standards, both in estimating and repair procedures. Also, Hernandez did a wonderful job documenting
the file. They took close to a hundred photographs, and some were very helpful. You just never know which photo is going to be the most important, but every repair shop that is hoping to help their customers should take lots of photos, particularly of any cost items or repairs that the shop knows the carrier will object to or may question.
What did you learn from that case? These cases have a long learning curve, and I am glad to have begun to understand some of the many legal, evidentiary and procedural issues that these cases present.
Do you think more consumers would get involved in short pay lawsuits if they were better educated about their rights? I don’t know. Some may, and others may think it is too much trouble. It is a time-consuming process.
Do you feel it’s important for shops and/or consumers to pursue short pay litigation? That decision is up to the policy holder and/or the third party damaged party. It’s great that some car owners are willing to test the insurance company’s decision on what it will and won’t pay. Without this ‘push back,’ insurance companies have little or no incentive to be reasonable. State Farm, in particular, appears to have a take-it-or-sue-me attitude, and so I am glad to assist consumers with the backbone to file suit.
What measures should be taken to prevent the necessity/prevalence of short pay cases in the future? The repair shops need to be willing to assist the customer by appearing to testify without requiring any sort of witness fee, and policyholders need to be familiar with their policy language. I expect that the best way to blunt the insurance industry’s incentive to short pay is for jurors to require full payment in trial verdicts. At least in Georgia, that is the only realistic avenue for making a difference. The Insurance Commissioner isn’t going to get involved. In helping the consumer, the shop should be aware that the consumer will have the burden of proof. So, the shop should document, document, document. Take lots of photos. Save invoices. Get as much in writing
54 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
as possible. Memories fade, and the carrier’s estimator will often have a different recollection of events than the shop estimator. This ‘he said/she said’ dilemma can often be resolved favorably for the consumer with sufficient documentation and photos.
What advice would you give shops/ consumers interested in pursuing short pay litigation? Be ready for protracted litigation. And as stated above, the shop has to document. The consumer should stay involved and make the calls to the carrier. Keep notes. Keep records. Then there is the issue of cost. Fortunately, in Georgia, attorney fees are recoverable by a policy holder; however, Georgia’s laws should be updated to allow for recovery of litigation expenses. Without this provision, the litigation playing field is tilted in favor of the insurance company because of the cost of depositions and discovery. Some carriers, such as State Farm, do not have appraisal clauses in their policies and so the policy holder has no choice but to sue in Court. The damaged wreck car
owner has no choice but to sue the atfault driver. The third party claims are difficult because the trial is a two-step process and the verdict must first be obtained against the at-fault driver. Then, there is the discovery process and the depositions. The insurance company doesn’t mind spending the money on the depositions, but this is an expensive litigation burden for the party bringing the lawsuit. The insurance company does not willingly turn over its documents and so motions are required. The insurance companies know this, and they have lobbied the legislature for years to have statutes written that favor their position in these bad faith cases. It would be helpful if the shops got involved in lobbying and leveled some of these playing fields, but that takes organization and the shops don’t appear organized at this point. Tell me about the second case you recently filed. Is it the same issue(s)? Are you optimistic about another victory? I am representing about a dozen policy holders against State Farm. The
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first two cases we tried, one a first party claim and the other being a third party claim, were both lost and are presently either on appeal or being prepared for appeal. The policy holders won the second two cases, again, both a first party claim and a third party claim. We are set to try another first party claim and are optimistic that this case will turn out well for the policy holder. There are many variables, including juror attitudes, which cannot be predicted with great accuracy, so we’ll just have to wait and
see. Hopefully, we can establish a string of verdicts for policy holders that will give these claims greater credibility. As always we welcome responses from opposing counsel or defendants and will report on them if received.
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TIAA Fishing
TIAA hosted their first statewide convention in April and is planning the 2015 convention in Dallas. As they improve their association, Sirianni urges interested parties to consider becoming a TIAA member: “we need members and invite automotive repair and auto body business owners to contact us. The membership is very affordable, and the benefits are great!”
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TIAA Fishing Tournament Sponsors contributed to the event’s success
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www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 55
Midwest Associations with Chasidy Rae Sisk
Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at crsisk@chasidyraesisk.com.
Plans Underway for 7th Annual Pro Paint Trade Show On Tuesday, August 12, the 7th An- and regarded by insurance companual Pro Paint Trade Show will take nies. place at the Orchard Hall Although seminar pre-registrawith Banquet Chasidy Rae Sisk and Restaurant in Baldwin, WI. In tion costs $20 per session, this fee is addition to six educational seminars, refunded to attendees upon arrival. the event, which is the largest trade Registration also includes free dinner show in the Midwest, will feature a and refreshments, as well as the opspecial guest appearance by 16-time portunity to win a plethora of door NHRA Funny Car Champion John with Chasidy Raeprizes. Sisk Additionally, pre-registered attendees will receive a $10 BP gas gift card to offset the cost of travel. The trade show floor will open from 4-9PM with over 100 product lines represented, and all vendors showcasing products will be offering with Ed Attanasioa minimum of 10% discounts with some vendors offering additional discounts and specials at the Pro Paint 7th Annual Trade Show. The comAttendees at last year’s Pro Paint Tradeshow plete vendor list is not yet confirmed Force. but will include 3M, AASP, AmeriThe seminar, “Collision Shop can Tape, C’Aire, Dynabrade, House with EdbyAttanasio Best Practices” presented Darrell of Kolor, Innovative Tools, Inver Amberson, Chairman of the Automo- Grove Honda & Toyota, Anest Iwata, tive Service Association (ASA), will Kadingers, Luther Auto Group, run from noon until 2PM. Simultane- MADA, Malco, Mirka Auto Refinish ously, a two-part seminar will cover Solutions, Norton, Pliogrip, PPG, “Proper Gun Set Up and Care” by Reading Technologies, SATA, SEM, Graco and “Pre-Treatment Premier,” Stericycle Inc., TG Products Inc., with Ed Attanasio presented by Doug Van Duyne. Transtar, UPOL, USC, WACTAL, From noon until 4PM, Nick Walcom USA, Wisconsin Parts AdDahl will present “Hands On Intro- vantage, Wizards, Zorn, and others. duction to House of Kolor Shimrin2” According to Pro Paint’s cowhere attendees are encouraged to owner and event planner, Dayna bring their gun and respirator as they Hennessy, the distributor is anticipatcover products with and processes, undering between 1100 and 1400 attenThomas Franklin coats, karrier bases, and effect pacs. dees. She believes that their annual From 2PM through 4PM, a seminar trade show is beneficial to the indusfocused on “Improving Transfer Ef- try because the one-day event proficiency and Reducing VOC Emis- vides networking, educational and sions Along with the Virtual Paint buying opportunities while still alSystem” will be led by the Minnesota lowing attendees to return home the withProgram Ed Attanasio Technical Assistance (Mn- same night so they don’t lose time at TAP) and the Iowa Waste Reduction work, plus collision repair profesCenter. sionals can attend the trade show at The longest seminar, “Envi- little to no cost. robase High Performance Water“The difference between our borne Recertification,” presented by trade show and others is that we enPPG, will run from 10AM until 4PM, gage real collision repair professionwith Chasidy Rae Sisk covering an update on new products als,” Hennessy explains. “Providing and techniques for technicians. Com- the information people are actually pletion of this course will allow a seeking is an integral part of Pro technician to move up to the next Paint’s Annual Trade Show. We’ve level of PPG Certified Technician scheduled interactive seminars on status. From 3PM to 4PM, PPG will everything from manufacturing to present the seminar “Adjustrite low-VOC waste management – it with on Thomas Franklin Estimating,” a web-based Class A can be frustrating when seminars are truck estimating program that is used just PowerPoint presentations that
National Associations
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which are set up to allow catering to each individual’s unique circumstances. We have planned a very informative day for those who choose to attend the seminars, and we’ve tried to touch on everything that col-
lision repair professionals could possible want.” The Pro Paint 7th Annual Trade Show serves as an educational and networking event for collision repair professionals and vendors which also provides vendors with an opportunity to showcase their products while potential customers can actually receive legitimate answers to their questions. Hennessy notes, “the people who man the tables are repairers and technicians who are knowledgeable to address people’s individual concerns. Our vendors bring in their management, engineers and sales staff who can truly explain the value of their products.” Mirka, C’Aire, 3M and others are scheduled to attend the trade show in full force. PPG management will also be in attendance, as well as representatives from WACTAL, AASP and other national collision repair associations.
Associations Assembling
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Customer service is the primary goal of the vendors who will participate in the trade show. Hennessy emphasizes, “it is the responsibility of the distributors and vendors to do what is beneficial for their customers, not to take advantage of them, but to do what’s right by them. The customer needs us to do our best practice in order to help them do their best practice so they can handle their business and make a profit.” Pro Paint is the largest PPG Platinum Distributor in the Midwest with two facilities, in Roseville MN and Baldwin WI. This is the seventh year they are hosting this trade show because, Hennessy cautions, “if you don’t give back to your own industry, you’ll watch it fade away!” To register to attend Pro Paint, visit http://propaintinc.com/automotive-paint-trade-show to download and submit the registration form.
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Caliber Collision Food Drive Nets Over One Million Meals
A record-breaking food drive by Caliber Collision associates nationwide surpassed all goals and expectations, collecting enough food and cash donations to help food banks provide more than one million meals for at-risk children this summer. The recent three-week food drive ended June 27th and netted 33,325 pounds of food, $105,000 in cash donations plus a $20,000 corporate contribution. The results shattered the goal Caliber Collision associates set for themselves as they challenged each other to top last year year’s effort by 25%. The final tally easily surpassed that initial goal with an incredible 200% increase over previous year’s efforts. The all-volunteer, grassroots Rhythm Restoration Food Drive involved 100% participation from all 180 Caliber locations in eight states—Arizona, California, Colorado, Nevada, New Mexico, North Carolina, Oklahoma and Texas—and headquarters in Lewisville, Texas. “One million meals will make a significant difference in the lives of thousands of children this summer who might otherwise go hungry without the routine of school lunches” said Steve Grimshaw, Caliber Collision President & CEO.
Collision Repair Students Receive Sustainability Challenge Grant from AkzoNobel AkzoNobel representative Buck Storck, District Sales Leader, recently visited high school students in the collision repair program at Gaithersburg High School in Gaithersburg, Maryland, where he spoke about the importance of sustainable practices in the collision repair industry and recognized the students for their participation in the industry’s first Sustainability Challenge Grant. “The need to achieve sustainability impacts individuals and industries around the world, and the collision repair industry is no exception. At AkzoNobel, we recognize that the future of our industry lies in the hands of students who are preparing for a career in the field, and we are planting the seeds to stimulate awareness of sustainability and environmentally-friendly business practices with the Sustainability Challenge Grant,” said Storck. The grant is sponsored by AkzoNobel and administered by the Collision Repair Education Foundation. Storck commended collision repair instructor Kevin Lester and his students for their proposal to improve the recycling efforts of the
school’s 6,500-square ft. collision repair shop by investing in a paper compactor to make masking paper more practical to store and recycle, plus a waterborne solvent recycler to allow solvent to be reused. “These ideas represent the innovative thinking that is needed in our industry to make a positive impact on the environment and will result in cost savings to the operation of a collision repair shop.” He encouraged the students to continue seeking out ways to improve processes, reduce their environmental footprint, and connect the lessons they learn in the classroom with the practices they see in collision repair shops. “Having the ability to think creatively and find practical solutions to problems will help you to adapt to changes in the industry and ‘future proof’ your career,” Storck said. Gaithersburg High School, located in Gaithersburg, Maryland, a suburb of Washington, D.C., was one of five schools to receive AkzoNobel’s Sustainability Challenge Grant earlier this year to implement the forward-looking plans of its students.
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www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 57
Southwest Associations with Chasidy Rae Sisk
Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, who writes on a variety of fields and subjects, and grew up in a family of NASCAR fans. She can be contacted at crsisk@chasidyraesisk.com.
HABA’s Focus: Re-imaging Collision Repair in Texas dependent body shops in order to esSoutheasttablish Associations a professional and profitable
by Chasidy Rae Sisk
for the critical issues that impact the industry as a whole. Kozadinos says, “we successfully lobbied for a reduced franchise tax rate, and we were
credit—it’s about furthering the industry as a whole!” Of course, no matter how great an association’s intentions may be, every new association faces certain challenges. “Like any new organization, HABA is an all-volunteer association,” Kozadinos explains. “This means that everyone has to step up for the greater good and take time away from their busy professional and personal lives to further our association as it grows. Eventually, we hope to be able to hire a full-time staff for the administrative tasks, but for now, we are just focused on continuing to move in the right direction.” Kozadinos identifies two key challenge areas: a lack of organization in terms of formalizing processes and procedures, and a shortage of qualified technicians. “A lot of people stumble into the collision repair industry. That’s why HABA is so focused on promoting the industry and improving its
Chasidy Raeorganization, Sisk Back in May, thewith Houston Auto Body to promote harmony and Association (HABA) held their 4th cordial business relationships, and to Annual Body Shop Owners and Man- establish common ground for agers Appreciation Event at the Cadil- better understanding between lac Bar and Grill on I-10 in Houston. insurance companies, shops, Attendees were treated to a buffet- vendors and consumers. Leo style dinner, beer and margaritas President of with Chasidy as RaeKozadinos, Sisk they indulged in a fun evening of net- HABA, shared some of the working with their collision repair in- association’s goals, projects dustry peers. Prizes were presented by and progress thus far. event MC Corey Cook. HABA was formed four HABA President Leo Kozadinos years ago when a core group says, “the event went great—it was a of independent and dealerwith Chasidy Rae Sisk lot of fun! The attendees enjoyed owned shops recognized the HABA Members enjoy a relaxed evening of socializing with their industry peers themselves, and the food and com- need for a local industry aspany were terrific. As promised, no sociation to promote consumer advo- able to thwart a city ordinance that official business was discussed; we cacy, to improve the image of the would have been very expensive for just enjoyed networking and fellow- industry, and to empower industry our members in Houston. HABA is ship with other collision repair pro- professionals. Kozadinos notes, “these focused on the things you expect and with Chasidy Raeefforts Sisk contribute to our ability to re- need an industry association to do. A fessionals. The door prizes were also terrific, and lots of folks walked away store our customers’ vehicles to pre- lot of people who do not currently parwith items, including an iPad mini, loss condition. It’s all about safety and ticipate in HABA will benefit from maintaining the value of the our efforts, but it’s not about receiving vehicle—this is what the cuswith Chasidy Rae Sisk tomers expect and what they deserve, so we decided to Audi come together and start from Genuine Parts scratch.” As a group comprised of Nothing else measures up. collision repair professionals devoted to advancing the industry, HABA’s mission is “to with Ed Attanasio create an environment of professionalism, respect, accountability, excellence, enthusiasm, Everyone was a winner at HABA’s business-free event! and the ability to collect fair $250 store gift certificates, restaurant and reasonable compensation for colligift cards and even a beautiful Lexus sion repairers who properly restore vemodel car. We can’t next hicles to their safe pre-loss condition.” withwait Eduntil Attanasio year!” In addition to improving the One of the keys to the upbeat at- image of the industry and acting as Order Audi Genuine Parts from these select Dealers mosphere was obvious in retrospect: consumer advocates to ensure that veNo business was discussed. Not all hicles are safely repaired, HABA is association meetings can be quite so currently working on further defining carefree since the association itself has the nuts and bolts of their organization So. California with Ed Attanasioas well as seeking more benefits to a serious purpose. For the Houston Auto Body As- offer members in hopes of increasing Audi of Downtown LA Circle Audi sociation (HABA), improving the membership. LOS ANGELES LONG BEACH image of the collision repair industry Servicing the formidable 50-mile 213-747-7248 800-675-2472 and promoting consumer advocacy radius of Houston and its surrounding 213-222-1261 Fax 562-597-2854 Fax are amongst the most important ac- suburbs in Southwest Texas, HABA Ask for Carlos or Fausto Ask for Eddie or Nate tions an association can take. As “an boasts members from 44 collision rewith Thomas Franklin organization devoted to the advance- pair businesses, excluding their assoment of the collision repair industry ciate members. Currently, the main objectives,” HABA encourages coop- benefits the association provides are eration between dealer-owned and in- networking opportunities and support
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image. We want to demonstrate what a fantastic career it is and how much money can be made in this industry.” Though HABA takes a stance against mandated parts-procurement systems, such as State Farm’s PartsTrader, and anything else that involved outside entities interfering with collision repair businesses, Kozadinos states, “the reality is that insurance companies wanting more control of the repair is nothing new, and it will continue, but everyone has to make their own decisions about what’s best for their businesses.” HABA has developed the following position statement for the insurance industry: “At HABA, our position in dealing with the insurance industry is one of mutual respect and accountability where every insurer believes they have received a quality repair at a fair settlement for quality work in a reasonable time and in a respectful manner due any professional relationship; where all services that are performed are paid for and all services paid for are performed; and where ethics and morals, respect and appreciation are the norm, not the exception.” Going forward, HABA plans to get more organized in terms of their
administration and goals, to increase the benefits they offer members as a means of providing more value to local shops, and to continue their lobbying efforts on the legislative front. Because all of HABA’s legislative goals were met during the last cycle, they do not currently have anything in the works regarding legislation. When working on legislative issues, Kozadinos admits that the association’s lack of resources is the biggest challenge since they cannot afford to hire professional lobbyists; however, “our legislators generally have open ears to collision repair professionals, especially if our proposal is beneficial for the consumer. We just have to demonstrate how the legislation harms the consumer and is bad for the collision repair industry as a whole… It takes time and resources, but people CAN bring about meaningful change, even if there’s only a handful of people working together.”
HABA 14027 Memorial Drive #378 Houston, TX 77079-6826 281-589-5343 www.habaonline.org
Caliber Collision Centers Opens Two New Texas Locations in Frisco and Wylie Caliber Collision Centers has opened a brand new 13,000-squarefoot facility in West Frisco, and one in Wylie, TX. The Frisco facility “will be one of the most advanced Caliber Collision centers in our network with proprietary innovations including side load paint system technology for faster repairs, new lobby layout and design for a better customer experience, as well as an on-site Enterprise Rent-A-Car facility for one-stop drop and go convenience,” said Steve Grimshaw, Caliber Collision Centers’ CEO. The new West Frisco facility is located at 275 Old Newman Road, Frisco, Texas. The facility will have 22 service bays, two heated paint booths and 74 parking spaces for Caliber’s customers and partners. Regarding its newest state-ofthe-art greenfield facility in Wylie, Grimshaw said, “Our new Wylie center is our third advanced repair facility in North Texas with the latest innovations in collision repairs including side load paint system technology for faster repairs, completely revamped lobby design for an in-
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www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 59
ABAT Hosts Inaugural Meeting with More than 80 in Attendance by Chasidy Rae Sisk
Last month we reported on the upcoming Auto Body Association of Texas (ABAT) inaugural meeting which occured after our press time. See Autobody News July 2014 issue, or online at: autobodynews.com search ‘ABAT’ As advertised, ABAT held their Inaugural Meeting on June 18, featuring guest speaker Barrett Smith, President and Founder of Auto Damage Experts, Inc. Burl Richards, Acting President of ABAT, reported that the meeting went very well with over 80 attendees present. “The event exceeded our expectations as we originally were expecting about 40–60 participants, but as the meeting got closer and we received more responses, it was obvious that we should prepare for more. We believe that, as word gets out and positive changes begin to happen, we will have even more participation which will be crucial as it will truly take a group effort to get things turned in the right direction.” ABAT organizers were excited about the various collision repair industry fields represented at the meeting as well as the interest expressed by
distant shops. In addition to body shop representatives from all across eastern Texas, attendees included vendors and jobbers such as Kent Automotive, English Color, Paint Works and BASF who sponsored the food at the event. Representatives from Gulf States Toyota were also present as well as two
going overlooked and unpaid and how, when omitted, these can create significant, yet unnecessary, liability issues for the repair facility. After highlighting these processes and explaining how shops can prevent being subjected to this extraneous liability, Smith presented on the value of Variable Rate
members from “Team PRP” Highway Auto Parts and even Snyder’s Auto Salvage, visiting from Temple TX which is nearly 200 miles away. After opening with prayer and the Pledge of Allegiance, Smith led the group in a discussion about the fact that “when it comes to Anti-Trust laws, we must abide by them, but that in no way restricts us, as collision repair shops, from discussing the viable issues that we face,” Richards recalls. “Being scared to discuss issues only keeps us where the insurance companies want us – uninformed.” Smith also discussed the problem with many required repair procedures
Surveys and how this information, when gathered properly, can indicate the labor rates in specific areas, as well as to highlight deficiencies in training, certifications and equipment. Following Smith’s presentation, attendees discussed ABAT’s mission which is “to create an environment of professionalism, respect and accountability while also having the ability to collect fair and reasonable compensation for repairs,” Richards explains. Lastly, the group debated the possibility of inviting CSI to conduct a rate survey in their region, an initiative that will be
HABA to Host Business-Building Events in Spring and Houston on August 5
On August 5, the Houston Auto Body Association (HABA), along with AAMS, 3M, Mitchell, Hertz, BASF, CARSTAR and KAPE, will co-host two business-building events for local body shops in Houston and Spring, TX, providing repairers in their area with the chance to meet with top collision industry professionals to discuss trends and opportunities for the upcoming year. Leo Kozadinos, President of HABA, refers to the upcoming event as “a game change in the collision industry. Proactive and innovative body shop owners will have the opportunity to learn about critical business issues and trends impacting their businesses.” The first session will be held on Tuesday, August 5, from 8-10AM at the Homewood Suites by Hilton Houston-Woodlands, located at 29813 I-45 North, Frontage Road in Spring, TX and will include breakfast as well as the educational segment of the meeting. From 6:30-8:30 that evening, a second meeting will be held, which includes dinner, at the
Hyatt Regency Houston, located at 1200 Louisiana Street in Houston TX. Both sessions will feature the same topics and speakers. In addition to HABA’s presentation on their association, seven leading organizations in the collision repair industry will provide imperative information for the shops in attendance. AAMS will discuss “OSHA/EPA Compliance Training for Collision Repair,” while “The Impact of Technology for Future Vehicles” will be presented by 3M. After the “Mobile Estimating Technology” presentation by Mitchell, Hertz will lead a seminar on “Car Rental Technology,” followed by BASF’s session entitled “Repair Planning.” The event will conclude with “Insurance Industry Trends” by CARSTAR and KAPE’s “Collision Industry Overview.” Body shop owners in the Houston area who are interested in attending this informational event can reserve their seats by contacting Mike Davids at mdavids@ carstar.com or via telephone at 913-948-5010.
60 AUGUST 2014 AUTOBODY NEWS | www.autobodynews.com
put to a vote at ABAT’s next meeting. Overall, attendees responded very positively to ABAT’s Inaugural Meeting and seemed ready to meet again as soon as possible. ABAT fulfilled their purpose for this meeting which was, according to Richards, “to educate shop owners and managers of their rights, not as the insurance companies instruct, but to be open to discussion with other shops without being fearful.” Richards further explains that the formation of ABAT and all associationsponsored events are important because “as vehicle technology increases and insurance companies want to pay less and less for procedures and operations required to restore vehicles to their pre-loss condition, we must remain profitable in order to educate and equip our shops with the necessary tools to put ‘safe’ vehicles back on the road.” ABAT has schedule a board meeting on July 2 to discuss their upcoming agenda, and they hope to hold their next meeting at the end of July or early in August. For more information about joining ABAT, contact Burl Richards at Burl@BurlsCollision.com.
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Louisiana Legislature Enacts Bill to Curb Air Bag Fraud, Fines and Imprisonment Both Authorized The Louisiana legislature has completed action on Senate Bill 32, which will establish stricter definitions and penalties for air bag fraud. Act No. 105 will take effect in August of this year and is comprised of the following: • No person shall knowingly install or reinstall in any motor vehicle a counterfeit or nonfunctional air bag or any other object intended to fulfill the function of an air bag that does not meet the definition of “air bag” set forth in this bill. • No person shall knowingly manufacture, import, sell or offer for sale a counterfeit or nonfunctional air bag. • No person shall knowingly sell, install or reinstall a device in a motor vehicle that causes the diagnostic system of the vehicle to indicate inaccurately that the vehicle is equipped with a functional air bag. “Air bag” means an inflatable occupant restraint system, including all component parts, such as the cover, sensors, controllers, inflators, and wiring, designed to activate in a motor vehicle in the event of a crash to mitigate injury or ejection and that meets the federal motor vehicle safety stan-
dards set forth in 49 C.F.R. 571.208 for the make, model, and model year of the motor 16 vehicle. (2) “Counterfeit air bag” means an air bag displaying a mark identically 18 or substantially similar to the genuine mark of a motor vehicle manufacturer, without the authorization of the motor vehicle manufacturer. (3) “Nonfunctional air bag” means any of the following (a) A replacement air bag that has been previously deployed or damaged. (b) A replacement air bag that has an electrical fault that is detected by the air bag diagnostic system after the air bag is installed. (c) A counterfeit air bag, air bag cover, or some other object that is installed in a motor vehicle in order to mislead or deceive an owner or operator of the motor vehicle into believing that a functional air bag has been installed. (4) “Serious bodily injury” means bodily injury that involves 28 unconsciousness, extreme physical pain, protracted and obvious disfigurement, protracted loss or impairment of the function of a bodily member, organ, or mental faculty, or a substantial risk of
death. E. Whoever violates the provisions of Subsection A or C of this Section shall: (1) Upon first conviction, be fined not more than one thousand dollars, or imprisoned for not more than six months, or both, except as provided in Paragraph (2) of this Subsection. (2) Upon a second and subsequent conviction, or if the violation results in the serious bodily injury or death of any person, be fined not more than two thousand five hundred dollars, or imprisoned, with or without hard labor, for not more than one year, or both. F. Whoever violates the provisions of Subsection B of this Section shall: (1) Upon conviction, be fined not more than two thousand five hundred dollars, or imprisoned, with or without hard labor, for not more than one year, or both, except as provided in Paragraphs (2) and (3) of this Subsection. (2) Upon conviction, if the cumulative sales price of the air bags or objects involved in the violation is at least five thousand dollars but less than one hundred thousand dollars, or if the number of air bags or ob-
jects involved in the violation is at least one hundred but less than one thousand, be fined not more than five thousand dollars, or imprisoned, with or without hard labor, for not less than six months nor more than two years, or both. (3) Upon conviction, if the cumulative sales price of the air bags or objects involved in the violation is one hundred thousand dollars or more, or if the number of air bags or objects involved in the violation is one thousand or more, be fined not more than ten thousand dollars, or imprisoned, with or without hard labor, for not less than one year nor more than five years, or both. G. Each manufacture, importation, installation, reinstallation, sale, or 26 offer for sale in violation of this Section shall constitute a separate and distinct violation. In addition, the New York legislature is considering Assembly Bill 9730, which affects the sale and installation of recycled air bags. It also proposes penalties for those who install, reinstall, or offer for sale any “inflatable occupant restraint system” that does not meet federal safety requirements.
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www.autobodynews.com | AUGUST 2014 AUTOBODY NEWS 61
Pro Spot Announces Aluminum Welders, Wire and Training Upcoming at NACE/CARS
Pro Spot has announced the availability of welders, wire, and training compatible with the Ford Collision Repair Program for the 2015 Ford F-150. The program requires a dedicated aluminum MIG welding system. The welder must be 220V and equipped with Pulse MIG Technology. Pro Spot notes its SP-5 Smart MIG, SP-2 Smart MIG, and SP-1 Pulse MIG are all on Ford's approved list of equipment. Ford requires 5554 1.2mm alu-
minum welding wire for the program. According to Pro Spot, the SP MIG Series welders come equipped with the 5554 1.2 mm aluminum welding wire for the Ford F-150 Collision Repair Program, as well as Silicon Bronze for MIG Brazing on UHSS & HSS, and Steel (on the SP-5). The SP MIG Series has also been approved by GM for the Corvette cast extrusion. Pro Spot provides a number of different training options. Along with the training that Ford requires for the Col-
lision Repair Program, Pro Spot also offers:
I-CAR Courses Approved & CASE certified courses on Squeeze Type Resistance Spot Welding & MIG Welding Training. NACE/CARS Pro Spot will teach three courses on Aluminum Repair and Plastic Bumper Repair: - Wednesday, July 30th 1:30-3:00-
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- Thursday, July 31st 3:30-5:00- Plastic Welding and Bumper Repair Course
- Friday, August 1st 1:30-3:00- Aluminum Welding & Repair
The company also offers local training and support through Pro Spot Representatives, online training through my.prospot.com and videos on the Pro Spot YouTube channel.
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