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CAA Lobbyist Reports California Capitol Still Up and Running by Ed Attanasio
While shops throughout the Golden State are coming up with new ways to survive during the pandemic, things are still happening at the Capitol, according to Jack Molodanof,
registered lobbyist for the California Autobody Association (CAA), and the president of Molodanof Government Relations. The government machine in Sacramento is still up and running and bills are still moving, but things have been modified and scaled back in the interim. “There will be a condensed legislative schedule throughout the pandemic with fewer bills, but the system is still in operation, and that’s why we have to stay ahead of the game.” Molodanof said. “These are unprecSee Still Up and Running, Page 16
PPP Forgiveness: No Need to Rush, and Other Tips by Jeff Drew and Ken Tysiak, Journal of Accountancy
Although forgiveness for Paycheck Protection Program (PPP) loans is a foremost topic on the minds of borrowers and the CPAs who advise them, experts are saying borrowers should not rush to apply for forgiveness. Long-expected FAQs expected to clarify many PPP-related issues are still awaited from the U.S. Small Business Administration (SBA) and Treasury. In addition, the loan forgiveness application has not been updated to reflect the recent five-
week extension of the program’s deadline to Aug. 8. A big reason for these delays is that Congress is debating a new round of COVID-19 relief, which is expected to include a second PPP initiative more targeted than the first one, said Mark Peterson, the executive vice president who heads the AICPA’s advocacy team in Washington, D.C. Those discussions also may include major changes relaxing the forgiveness requirements for the smallest loans, possibly those up to $100,000 or $150,000. “The situation is very dynamSee PPP Forgiveness, Page 24
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AUTOBODYNEWS.COM Vol. 39 / Issue 9 / September 2020
Focus Advisors Releases Midyear Updates on Collision Repair Industry by Chris Lane and David Roberts
“It’s August and we are more than halfway through a most extraordinary year,” the email said. “The Great Pause continues. What follows is our midyear update.” Operations Average shop revenues are down 25% to 30% across the country, though it varies by region and by the intensity of regional COVID cases. Most shops are slowly returning to higher volumes. The best news—many operators have figured out how to maintain
close to normal margins on dramatically reduced revenues. The recession of 2009 taught operators how to both survive and then improve operations while under financial duress. Lessons well-learned then are helping the best operators weather this even more extraordinary downturn. PPP loans have had a universally positive impact for those operators who were successful in their applications. The relaxation of repayment terms has been a positive development. Most loans are expected to be largely forgiven. See Midyear Updates, Page 18
New CIC ‘Industry Relations’ Committee Seeks Progress by Expanding Beyond Shops, Insurers by John Huetter, Repairer Driven News
The CIC has replaced its Insurer-Repairer Committee with an Industry Relations Committee, seeking progress and greater understanding on issues that affect all other segments of the industry as well. The committee presented the virtual CIC on July 23 a slide showing all the potential stakeholders when a vehicle owner or lessee crashes a car. The list included not just the motorist, insurer and repairer, but also the OEM; dealership; sublet providers like glass, PDR and towing interests; suppliers; educators; regulators; information and tech providers like estimating systems, management systems and diagnostic providers; trade groups; and trade press. Co-Chairman Jim Keller, of 1Collision, said the panel now has “about 35 total” participants, and it seeks a “great cross-section” of representation. Core members today include representatives from four insurers, five repairers—counting Keller’s 1Colli-
sion—Audi, SCRS, Fayetteville Technical Community College and I-CAR, Enterprise, CCC, 3M and Auto Techcelerators.
Collision Industry Conference Industry Relations Committee member Jonathan Chase, of National General, speaks to the July 23 virtual CIC. Credit: Screenshot from CIC video
Asked at one point about recyclers, Keller encouraged them to get in touch; he’d love to have some on the panel. Committee member Mark Algie, of 3M, challenged his other paint and materials colleagues to participate and noted that some supplier issues deserved attention. Co-Chairman Mark Allen, of Audi, said both he and former Insurer-Repairer Relations Committee Co-Chairman Clint Marlow, of See ‘Industry Relations’, Page 22
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CONTENTS A Car and Its Boy: WA Teen’s 16th Birthday Present is a Driver’s Dream...........................26 Auto Club Warns Vehicles Could Cause Wildfires .......................................................23 CA Body Shop Offers Service to Keep Cars Clean During Pandemic.................................24 CAA Lobbyist Reports California Capitol Still Up and Running .......................................1 Classic Car Restorer Indicted on Fraud Charges ........................................................11 Elon Musk Says Tesla Will Stay in California, For Now ........................................................10
Democracy .....................................................4 Analysis Shows PA Has 2nd-Most Coronavirus Restrictions Among U.S. States .....................50 ARA Takes Summer Road Trip Virtual, Annual Convention to Follow Suit..............................63 Asbury Announces Record Q2 Results ...............61 CCC Named Parts eCommerce Provider ............11 CES 2021 Is All-Digital ......................................61 Dean Fisher Now I-CAR Board Member .............29 Fiat Chrysler Blasts GM’s Attempt to Revive Racketeering Lawsuit, Calls It
Focus Advisors Releases Midyear Updates on Collision Repair Industry.............................1
Fix Auto USA Expands in Orange County, CA ........6
GM Names Stapleton Acting CFO ........................3
Maaco Franchisee Holds Fundraiser for Boise
GM Not Happy with Facebook, Quits Ads
McPherson College Matching Gift Challenge .....10 OR Governor, Health Experts Considering Interstate Travel Ban as Counties See Surge in COVID-19 Cases .............................14 Proposal Would Grant NV Businesses Legal Immunity from COVID Lawsuits if They Comply With Health Standards ......................12 Uber and Lyft Sued for ‘Unpaid Wages’ by
joined the company in 1990 and has held a series of finance roles with increasing responsibility in manufacturing, labor, performance improvement and operations. Source: GM
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‘Despicable’ ..................................................54
FCA, Waymo Expand Autonomous Driving Tech ...14
Resident Injured in Home Invasion ................28
General Motors on Aug. 11 announced John Stapleton, GM North America CFO, has been named acting global CFO, effective Aug. 31. The appointment follows the resignation of Dhivya Suryadevara, executive vice president and CFO, who will leave the company for an external opportunity outside the automotive industry. GM will conduct an internal and external search for a successor. Stapleton has been in his current role since January 2014. He
on Platform ...................................................52 Hertz Settlement Calls for Disposal of 182,521 Vehicles ..........................................20 Honda is Asking Office Staff to Work on Assembly Line ..............................................63 Hurricane Isaias Insured Losses Estimated to Top $4.2B in U.S. and Caribbean ...............60 LKQ Corp. Appoints Jacob H. Welch to its Board of Directors .........................................14
INDEX OF ADVERTISERS
REGIONAL
GM Names Stapleton Acting CFO
Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Contributing Writers: John Yoswick, Janet Chaney, Toby Chess, Ed Attanasio, Chasidy Sisk, David Luehr, Stacey Phillips, Victoria Antonelli, Gary Ledoux Advertising Sales: Joe Momber, Bill Doyle, Norman Morano (800) 699-8251 Office Manager: Louise Tedesco Digital Marketing Manager: Bryan Malinski Art Director: Rodolfo Garcia Graphic Designer: Vicki Sitarz Online and Web Content Editor: Abby Andrews Accounting Manager: Heather Priddy Editorial/Sales Assistant: Randi Scholtes Office Assistant: Dianne Pray
Serving Alaska, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington and Wyoming. Autobody News is a monthly publication for the collision industry. Permission to reproduce in any form the material published in Autobody News must be obtained in writing from the publisher. ©2020 Adamantine Media LLC.
American Icon Automotive Finishes ................... 6
Innovative Tools & Technologies, Inc ................ 51
Audi Wholesale Parts Dealers .......................... 43
Kearny Mesa Subaru-Hyundai ......................... 28
AutoNation Collision Parts ............................... 19
Kia Downtown Los Angeles ............................. 44
AutoNation Infiniti Tustin ................................. 12
Kia Motors Wholesale Parts Dealers ...........56-57
Autobody News P.O. Box 1516 Carlsbad, CA 92018 (800) 699-8251 (760) 603-3229 Fax www.autobodynews.com editor@autobodynews.com
California Labor Commissioner Over
Mark Olson: Get it Right the First Time ..............35
AutoNation Roseville ......................................8-9
Kia of Carson .................................................. 30
Driver Classification ......................................29
Mitchell Announces Cloud-Based Solution...........6
BMW Wholesale Parts Dealers ........................ 39
Kia of Irvine .................................................... 23
MSO Symposium Going Virtual ..........................55
Car-O-Liner..................................................... 21
Larry H. Miller Chrysler-Jeep-Dodge-Ram ....... 24
New CIC ‘Industry Relations’ Committee
Car-Part.com .................................................. 22
Malco ............................................................. 17
Seeks Progress by Expanding Beyond
Car Pros Kia .................................................... 34
Matrix Automotive Finishes ............................... 5
Shops, Insurers ...............................................1
Car Pros Kia Renton ........................................ 38
Mazda Wholesale Parts Dealers ...................... 54
NICB: Thousands Left to Rebuild After Isaias .....63
CCC Information Services, Inc ......................... 41
Mercedes-Benz Wholesale Parts Dealers ........ 54
Nikola Scores Landmark Order For 2,500
Certified Automotive Parts Association ............ 14
Michael Hohl Motor Company ........................... 6
Classifieds ...................................................... 62
MINI Wholesale Parts Dealers.......................... 39
Colortone Automotive Paints ........................... 36
MOPAR Wholesale Parts Dealers ..................... 37
Courtesy Chevrolet San Diego ......................... 29
Nissan/Infiniti Wholesale Parts Dealers............ 53
Cutter Chrysler-Dodge-Jeep-Ram ................... 18
Porsche Wholesale Parts Dealers .................... 61
Has 30,000 Buyers Waiting ...........................58
DCH Chrysler Dodge Jeep Ram Fiat ................ 26
PPG Refinish ................................................... 13
RTS™ Portal Free Access Extended ....................6
Eagle Abrasives, Inc ........................................ 25
Reno Buick-GMC ............................................ 24
Highlights Include Presentations About
SEMA Show Canceled .......................................61
Equalizer Industries, Inc .................................. 36
RGI Spray Booth Company .............................. 11
Pressing Industry Topics ...............................42
SEMA Survey: Industry Outlook and Sales
Ford Wholesale Parts Dealers .......................... 59
SATA Dan-Am Company .................................... 2
Projections Continue to Improve....................52
Frank Subaru .................................................. 40
Sierra Chevrolet-Honda-Subaru ...................... 35
Lifelong Learners and Implementing
Subaru Reports July Sales ................................55
Galpin Motors ................................................. 45
Spanesi Americas ........................................... 10
Hands-on Efficiency Training .........................48
Tesla Invites Insurance Actuaries to Help It
Garden Grove Kia ............................................ 23
Steck Manufacturing Company ....................... 20
Create a ‘Revolutionary’ Insurance
Glenn E. Thomas Dodge-Chrysler-Jeep ........... 15
Subaru Wholesale Parts Dealers...................... 49
Company ......................................................55
GM Wholesale Parts Dealers ........................... 55
Tacoma Dodge-Chrysler-Jeep-Ram ................ 31
USAA Returning Additional $270M ....................58
Haldon Company ............................................ 27
The Bay Area Automotive Group ...................... 47
Webinar Highlights the Importance of
Honda-Acura Wholesale Parts Dealers .......32-33
Vintage Flatz/Cumberland Products ................ 16
Hyundai Wholesale Parts Dealers .................... 52
Volkswagen Wholesale Parts Dealers .............. 48
Industrial Finishes and Systems .................. 7, 64
Volvo Wholesale Parts Dealers ........................ 60
COLUMNISTS Anderson - More Best Practices to Make the Most of the ‘Parts’ Portion of Your Business .......................................................34 Attanasio - CCC Photo Estimates and AI-Supported Claims Spike in Response to COVID-19..................................................46 Chess - An Overview of Corrosion Protection Products: Part 2 of 2 .....................................38 Ledoux - The Advent of the Computer Age ........44 Phillips - SCRS Open Board Meeting
Phillips - The Importance of Creating
NATIONAL 98th Soldier Wins Dream Automotive Job at Kindig-it Design ........................................30 AAPEX 2020 to Be Virtual Experience ................50 American Views 2020: Trust, Media and
Battery-Electric Garbage Trucks ....................60 PPP Forgiveness: No Need to Rush, and Other Tips .......................................................1 Reservation Numbers Reveal Rivian R1T
OEM Certification ..........................................63
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American Views 2020: Trust, Media and Democracy The following is an executive summary of Gallup and the Knight Foundation’s annual report on American views on trust, media and democracy. The full report can be downloaded here. https://knightfoundation. org/wp-content/uploads/2020/08/ American-Views-2020-Trust-Media-and-Democracy.pdf Americans still value the media’s traditional roles in society, such as providing accurate news and holding powerful interests accountable for their actions. The vast majority of Americans (84%) say that, in general, the news media is “critical” (49%) or “very important” (35%) to democracy. Americans are more likely today to say the media’s role in democracy is “critical,” up five percentage points since 2017. Large majorities say it is “critical” or “very important” for the news media to provide accurate and fair news reports (92%), ensure Americans are informed about public affairs (91%) and hold leaders accountable for their actions (85%). More Americans say the media is performing poorly rather than well in accomplishing these goals than did in 2017. However, Americans see increasing levels of bias in the news media; majorities see bias in the news source they rely on most. A majority of Americans currently see “a great deal” (49%) or “a fair amount” (37%) of political bias in news coverage. The percentage seeing a great deal of bias is up from 45% in 2017. Most Americans see bias in their go-to news source; 20% see “a great deal” and another 36% see “a fair amount” of bias in the news source they rely on most often. Given the choice, however, more Americans say they are concerned about bias in the news other people are getting (69%) than say they worry about their own news being biased (29%). Nearly three-quarters of Americans say they see too much bias in the reporting of news that is supposed to be objective as “a major problem” (73%), up from 65% in the 2017 study. Americans suspect inaccuracies in reporting are designed to push a specific agenda. Americans perceive inaccurate news to be intentional— either because the reporter is misrep-
resenting the facts (54%) or making them up entirely (28%). Nearly eight in 10 Americans (79%) say news organizations they distrust are trying to persuade people to adopt a certain viewpoint, while 12% say they are trying to report the news accurately and fairly but are unable to do so. Eight percent of Americans say distrusted media are trying to ruin the country, driven largely by the 1 in 5 Americans who identify as “very conservative” and 1
in 10 Republicans who feel this way. Differences in Americans’ opinions of the news media are most pronounced by political party affiliation. Almost three-fourths of Republicans (71%) have a “very” or “somewhat” unfavorable opinion of the news media, compared to 22% of Democrats and 52% of independents. Democrats and Republicans differ greatly in their ratings of the media on every aspect of performance, including providing objective news reports, holding political and business leaders accountable for their actions and helping Americans stay informed about current affairs. Sixty-nine percent of Americans, including 61% of Democrats, say the increasing number of news sources reporting from a particular point of view is “a major problem.” In contrast, 77% of Republicans say the same. While a majority of Americans across the political spectrum (80%) say the media is under attack politically, they are divided as to whether those attacks are merited. Whereas 70% of Democrats say the media is under attack and those attacks are not justified, 61% of Republicans say such attacks are justified. In addition to partisan differences in media attitudes, views also vary by age, with older Americans generally more favorable toward the news
media than younger Americans. Whereas 44% of Americans aged 65 and older have “very” or “somewhat” favorable views of the media, less than 1 in 5 Americans under age 30 (19%) say the same. Majorities of Americans say noews organizations should diversify their reporting staffs, but they differ—largely by politics—on the focus of diversity efforts. A strong majority of Americans (79%) say news organizations should hire to increase the diversity of their reporting staffs. However, while majorities say it is important for the news media to reflect the diversity of America, this ranks lowest of the priorities among the roles for media to play in society. The priorities cited by Americans who say news organizations should hire for more diversity differ greatly by race and political party. Democrats (49%) and Blacks (60%) prioritize racial/ethnic diversity in hiring, while Republicans (51%) and whites (35%) are most apt to prioritize diversity in political views. Americans commonly feel overwhelmed by the volume and speed of news, but say misinformation is media’s greatest problem. Those overwhelmed are most likely to turn to one or two trusted news sources as a solution. Four in five Americans (78%) say the spread of misinformation online is “a major problem,” exceeding all other challenges posed by the media environment. Seventy-three percent of Americans want to see major internet companies find ways to exclude false/hateful information online. More Americans say it is harder (62%) rather than easier (36%) to be well-informed because of all the sources of information available. In 2017, 58% said it was harder to be informed. Reasons Americans who say it is harder to stay informed cite for feeling overwhelmed include the mix of news interspersed with non-news on the web (72%), followed by the pace
or speed of news reporting (63%) and the increased number of organizations reporting the news (63%). More Americans (54%) say there are enough media sources to sort out the facts than say there is so much bias it’s difficult to sort out the facts (43%), an improvement from 2017 when the split was 50% to 47%, respectively. Republicans (65%) are much more likely than independents (48%) and Democrats (21%) to say there is too much bias to sort out the facts. In response to feeling overwhelmed, 41% of Americans say they only pay attention to one or two trusted sources; 31% try to consult a variety of sources to see where they agree; 17% go to the extreme of ceasing to pay attention to news altogether; and 8% rely on others to help them sort out what they need to know. Local news plays a key role in political and civic engagement. Thirty-one percent of Americans say they follow news about issues affecting their local community “very closely,” an increase from 25% in 2017. However, most Americans are not very confident in their knowledge relating to public affairs in their community. Americans who follow local news closely are more likely to vote in local elections and to feel attached to their communities. They are less likely to say that “people like me don’t have any say in what the government does.” Americans who primarily access their news online—predominantly, younger Americans—are less likely to be knowledgeable about their local communities and to feel attached to their communities. In a deeply divided nation, majorities of Americans say the media bears blame for political division. But they also see the potential for the media to heal the divide. Forty-eight percent of Americans say the media bears “a great deal” of blame for political division in this country, while 36% say they bear “a moderate amount.” But nearly identical percentages say the media could do “a great deal” (49%) or “a moderate amount” (35%) to heal those divisions. We thank the Knight Foundation for reprint permission.
4 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com
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Fix Auto USA Expands in Orange County, CA Fix Auto USA on Aug. 10 announced its newest location, Fix Auto Lake Forest, in Orange County, CA. Fix Auto Lake Forest is the eighth California location for Franchise Partner Richard Fish and second for Bryan Wendt, who, with Fish, operates Fix Auto Kearny Mesa in San Diego. “Fix Auto Lake Forest is such an incredible story for our network. Amid so much uncertainty lies opportunity, and that’s exactly what Richard and Bryan see in Fix Auto Lake Forest. Further, this location was previously operated by another multi-site operator who elected to not hold onto the store as a result from COVID-19,â€? said Fix Auto President Paul Gange. “Mid-pandemic, and with the power and strength of Fix Auto USA’s platform, they chose to press forward and launch the store from ‘zero’ with the complete conďŹ dence of our recognizable brand and systems. Every franchise partner within our system is incredibly talented and entrepreneurial, and Fix Auto Lake Forest is the latest example of that and how unique our enterprise is.â€?
RTS™ Portal Free Access Extended I-CAR , the Inter-Industry Conference on Auto Collision Repair, announced it will extend free access to its Repairability Technical Support™ (RTS) Portal (https://rts.i-car.com/) through the end of the year. I-CAR offered complimentary access to RTS until May 31 through their COVID-19 Industry Relief Program, announced in March. The extension has been well received by the industry. Launched in 2014, RTS is designed to oer the most up-to-date collision repair technical information at the ďŹ ngertips of all of those in the collision repair industry through one easy-to-navigate hub. A popular feature of RTS is “Ask I-CAR,â€? where trained collision repair professionals can submit repair-related questions to I-CAR’s team of RTS experts. I-CAR strives to answer every inquiry within two hours, and often much sooner, and recently ďŹ elded its 28,000th “Ask I-CARâ€? question. Source: I-CAR ÂŽ
“Everyone responds to adversity and instability dierently, but Bryan and I chose to strike when an opportunity presented itself,â€? said co-owner Fish. “When COVID-19 forced many to shudder, we raised our periscope and searched for op-
Source: Fix Auto
portunities, and that’s what we saw in our newest location—a chance to advance the brand forward. This shop, in particular, will always have a unique and memorable story enveloping it, but we always knew we could rely on just how powerful Fix Auto USA is and the team helping us launch this store.� “Since becoming a franchise partner when we opened Fix Auto
Kearny Mesa, I’ve been able to quickly understand why operators make the choice to align with Fix Auto USA. By joining, we were able to take advantage of platforms, systems and processes that, on my own, we wouldn’t be able to execute on,â€? said co-owner Wendt. “It would be extremely diďŹƒcult to imagine going through COVID-19 without the strength and support we receive from Fix Auto USA and the other franchise partners we have access to as part of our owners community. We’re very excited to open Fix Auto Lake Forest and are looking to be operating at full steam very quickly.â€? “When we launched Fix Auto USA in 2011, we did so knowing many would come to rely on and leverage our platform for their continued growth, and Fix Auto Lake Forest embodies this perfectly. On behalf of the entire Fix Auto USA family, we couldn’t be more proud of our partnership with Richard and Bryan and look forward to seeing Fix Auto Lake Forest at capacity,â€? added Gange. Source: Fix Auto
Mitchell Announces Cloud-Based Solution Mitchell, a leading provider of technology, connectivity and information solutions to the property & casualty claims and collision repair industries, announced Aug. 19 the availability of the MitchellÂŽ Cloud Glass solution, a glass repair and replacement system that directly links OEM repair procedures found in the MitchellÂŽ TechAdvisor database to National Auto Glass SpeciďŹ cations (NAGS.) This, combined with Mitchell’s diagnostic and calibration tools, is designed to save technicians time and help ensure proper, safe repair of vehicle windshields, including those with Advanced Driver Assistance Systems (ADAS.) Repairers can access Mitchell Cloud Glass from any Internet-enabled device and schedule jobs, process work orders, generate invoices, track performance and receive payments from insurance partners and customers. Source: Mitchell
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Elon Musk Says Tesla Will Stay in California, For Now by Joey Klender, Teslarati
Tesla CEO Elon Musk said his electric car company’s headquarters will remain in California for the short term. However, the automaker may move to another state in the future, the CEO added. “There’s no question that our headquarters will remain in California for the short term,” Musk said during an interview with Automotive News’ Jason Stein. “Long term, we’ll have to wait and see.” Interestingly enough, Musk indicated in May there was a chance Tesla would be moving its headquarters away from Northern California following the area’s response to the COVID-19 pandemic. Tesla’s Fremont production facility remained closed for a month and a half, and Musk was vocal regarding his discontent for the situation. “Frankly, this is the final straw,” Musk said on Twitter. “Tesla will now move its HQ and future programs to Texas/Nevada immediately.” Musk kept his promise somewhat, as the company announced
its next production facility would be located just 15 minutes outside of Austin, TX. The company already has a production facility for batteries and powertrains in near Reno in Sparks, NV. Tesla’s headquarters has been located in California since the company’s establishment in 2003. For the most part, Tesla and California’s relationship was keen, and the company has established itself as a significant contributor to the state’s economy. It is the only automaker still based in California. However, the incident with Fremont rubbed Musk the wrong way. Although the relationship between Tesla and California is better than it was, Musk’s response during the interview seems to indicate he may be leaning toward a move in the future. Recently, Teslarati reported many of the company’s executives were asked where they would want to spend time if they were needed in the same area as the new factory. A significant factor in Tesla’s decision to choose Austin was the fact
that Tesla’s principal members were more interested in Austin than other Texas cities. “When talking to key members of the team that would need to move to Austin from California in order to get the factory going, Austin was their top pick to be totally frank,” Musk said. “That was a big factor in choosing Texas and Austin. Specifically Austin. I guess a lot of people from California, if you ask them what’s the one place you’d move outside of California, it’s Austin.” Musk has also applied for a Texas driver license recently and has sold his multiple California estates. Whether Musk and Tesla will move the operation from California to Texas or not is unknown. Right now, Musk knows that the company has its hands full with building Giga Berlin and Giga Texas, and the short term goals are focused on getting the new facilities built and beginning production of Tesla’s upcoming vehicles on time. We thank Teslarati for reprint permission.
McPherson College Matching Gift Challenge McPherson College in Kansas has announced a $1 million matching gift challenge from Florida philanthropist and automotive enthusiast Dano Davis. The gift will support business curriculum development, student experiences and scholarships for students enrolled in the only bachelor’s degree in historic automotive restoration in the country. Davis hopes his gift will motivate others to support McPherson College’s automotive restoration program. Any gift designated to the restoration program—for lab and classroom support, scholarships, the tool fund, endowment— will qualify for the match. In January of this year, Davis opened The Brumos Collection, in Jacksonville, FL, that focuses on the development of the automobile and the Brumos Porsche racing legacy. The museum is housed in a building created to resemble the Ford assembly plant that once operated in Jacksonville. Source: MacPherson College
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Classic Car Restorer Indicted on Fraud Charges by Steven Symes, Motorious
A Fresno, CA, businessman offering classic car restoration services to the community under the name West Coast Chassis LLC was recently indicted on fraud charges, announced U.S. Attorney McGregor W. Scott recently.
Credit: Twitter
Jeffrey Scott Hodges, who currently lives in Irvine, CA, was charged with 22 federal charges of both wire fraud and money laundering. Corvette and Camaro owners were specifically targeted for chassis and frame restoration services. According to information on the internet, the business adver-
tised custom frames “that modernize the suspension, braking, steering, safety and overall quality” of the vehicles. It claimed to use specifications from the 2015 Chevy Corvette Z06 with all design work done in Solid Works CAD. That certainly sounds compelling, so it’s understandable why so many customers jumped at the chance for such an upgrade. Customers would send their cars and money, but prosecutors say Hodges repeatedly failed to provide the agreed-upon services while keeping the money. They say he swindled people out of more than $600,000. Court filings indicated Hodges owned and operated West Coast Chassis LLC from Nov. 2015 to January 2019. Hodges is facing a maximum 20 years in federal prison and a $250,000 fine if convicted. A quick search online uncovers this is hardly Hodges’ first
brush with legal problems. At least one former customer filed suit against West Coast Chassis in late 2017, claiming Hodges kept his $6,000 deposit, ran up fraudulent charges of more than $34,000 on his credit card and then delivered a vehicle which wasn’t “in satisfactory condition.” It took the collaboration of the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation to fully investigate Hodges’ alleged activity. Now the U.S. Attorney’s office is handling the prosecution in federal court. If you or someone you know believes they were a victim of Jeffrey Scott Hodges or West Coast Chassis LLC, contact the FBI at (916) 746-7000. We thank Motorious for reprint permission.
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Proposal Would Grant NV Businesses Legal Immunity from COVID Lawsuits if They Comply With Health Standards by Michelle Rindels and Riley Snyder, The Nevada Independent
Businesses—but not health facilities—would get immunity from liability for death or injury stemming from COVID-19 if they substantially followed directives aimed at preventing the spread, according to a draft expected to be introduced in the Nevada Legislature’s special session. The bill language, obtained by The Nevada Independent and first reported by the Las Vegas Review-Journal, outlines litigation protections from COVID-19 related liability for governmental entities, schools, nonprofits and major businesses if they meet “controlling health standards” outlined in the bill. It’s the culmination of a weekslong effort by some of the state’s largest industries, including the casino resort trade group Nevada Resort Association, to enshrine liability protections in law amid lessened business demand and declining profits for the state’s tourism-driven economy. They have argued frivolous lawsuits linked to COVID-19 could put them out of business. But the concept of liability protection has also been opposed by progressive groups and trial attorneys, who say it lets potentially dangerous or unsafe behavior off the hook by protecting them from litigation. It’s also raised the ire of health care interests, who say they should get the same protections as other businesses do. But the bill also contains language on the liability protections with enhanced worker safety provisions, including many provisions requested over the past weeks by the Culinary Workers Union Local 226. The bill draft request lays out in significant detail health and safety requirements for hotels and casinos. Upon request of the Nevada Gaming Control Board, health districts could make recommendations about public health matters and be granted the authority to enforce those regulations. For businesses, immunity would apply to those that are adhering to federal, state or local laws, regulations or ordinances, or written document, order or publications presented
by government agencies or regulatory bodies. For a lawsuit related to COVID-19 death or injury, plaintiffs are required to plead “with particularity,” a technical legal term that essentially means they must meet a higher evidentiary bar in order to bring a claim. Any lawsuits can be dismissed if the challenged entity is in “substantial compliance with controlling health standards,” a term introduced in the bill that is defined as a “good faith effort” to comply with federal, state or local laws or regulations related to COVID-19 mitigation or protection. The bill also states “isolated or unforeseen events of noncompliance” with the health standards to not demonstrate noncompliance— which likely means individual cases are not enough for litigation, instead requiring plaintiffs to identify a pattern. “If the entity was in substantial compliance with controlling health standards, the entity is immune from liability unless the plaintiff pleads sufficient facts and proves that: (1) The entity violated controlling health standards with gross negligence; and (2) The gross negligence was the proximate cause of the plaintiff’s personal injury or death,” the bill draft request says. The bill also authorizes the secretary of state’s office to suspend the business license of any entity found to be violating the “controlling health standards.” Worker protections The bill draft request also requires many of those major businesses to provide substantial worker protections, many of which were identified as priorities by the politically powerful Culinary Workers Union Local 226 over the past weeks. Proposed language calls for all hotels to establish and maintain a written COVID-19 response plan for both employees and guests that includes: Designation of a person to oversee and carry out the plan Require each new employee or employee returning to work be tested for COVID-19, if available Designate an area and require
daily temperature screenings and questions related to exposure to the virus for all employees. Requires each business to notice each employee who is known to have contact with a guest or other employe who has tested positive for COVID-19 within 24 hours or as soon as practicable. Any employees notified about possible contact with a possible case are required to undergo testing, and receive at least three days of paid time off while waiting for testing results (more days can be taken off in the event of delays in testing). Prohibits any employer told by an employee that they are experiencing COVID-19 symptoms from requiring them to go to work while awaiting testing results, including similar paid time off requirements Requires employers to give any employee who is working or recalled to work when they are diagnosed with COVID-19 at least 14 days off, including at least 10 days paid. Employers can petition the state to
increase or decrease the number of days off, if they are consistent with federal health guidelines Requires any guest who tests positive for COVID-19 while at a business to leave if practicable The measure would require cleaning standards be adopted such as daily cleaning of high-touch objects in rooms, including remote controls, touch screens and toilets. Outside of the rooms, the regulations must call for regular cleaning of key cards, tabletops, exercise equipment and more. The bill also allocates $2 million to the Southern Nevada Health District and $500,000 to the Washoe County Health District to implement and enforce provisions of the bill. The act would take effect immediately and would last until the end of the governor’s state of emergency, or July 1, 2023, whichever comes later. We thank The Nevada Independent for reprint permission.
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FCA, Waymo Expand Autonomous Driving Tech
OR Governor, Health Experts Considering Interstate Travel Ban as Counties See Surge in COVID-19 Cases
FCA and Waymo announced July 22 they have taken the next significant steps in the expansion of their successful autonomous driving technology partnership. Waymo will now work exclusively with FCA as its preferred partner for the development and testing of class 1-3 light commercial vehicles for goods movement for commercial delivery customers, including Waymo Via. The two companies will initially target integration of the Waymo Driver into the Ram ProMaster van, a highly configurable platform that will enable access to a broad range of global commercial customers. This partnership will allow FCA and Waymo to leverage their respective strengths and competencies to determine how to effectively use autonomy to address the specific needs of commercial customers given the rapid growth of goods delivery services. FCA became Waymo’s first OEM partner in 2016. Source: FCA
by Tim Gruver, The Center Square
Travel may get complicated in Oregon if discussions between Oregon Gov. Kate Brown and lawmakers bear fruit. Brown’s press secretary confirmed Wednesday that travel restrictions have been suggested by members of the governor’s Medical Advisory Panel in light of COVID-19 cases linked to travel in southern Oregon. Press Secretary Charles Boyle said the governor is “asking the health experts at the Oregon Health Authority and the Medical Advisory Panel for more data on travel-related spread of COVID-19, as well as recommendations for health and safety measures to address such cases.” According to Boyle, Brown discussed the travel restrictions’ impacts on local economies and supply chains with state lawmakers on Aug. 4. The governor has previously floated the idea of prioritizing travel restrictions for tourist travel from high-risk states
LKQ Corp. Appoints Jacob H. Welch to its Board of Directors LKQ Corporation announced Aug. 12 it has appointed Jacob H. Welch of ValueAct Capital to its Board of Directors, effective the same day. “We are delighted to welcome Jake to LKQ’s board,” said Joseph M. Holsten, chairman of LKQ Corporation. “Jake’s investment management track record and public market experience will further complement the diverse skills and experience of our board. We look forward to his contributions as we work with management to drive long-term value for all of our stakeholders, including our shareholders.” Welch is a partner of ValueAct Capital, one of LKQ’s largest stockholders. He has previously served as a director of Armstrong Flooring, Inc., where he was a member of the Compensation and Finance committees. Prior to joining ValueAct Capital in August 2009, Welch worked as an analyst with The Blackstone Group in its private equity division in New York. He has a bachelor of arts, cum laude, from Harvard College and is a CFA charterholder. “ValueAct Capital invests in great com-
panies navigating changes with the potential for substantial longterm value creation,” Welch said. “We have long admired LKQ’s three market-leading businesses and have more recently been encouraged by management and the board’s renewed focus on operational excellence. “This is a great foundation for continued revenue, profit and cash flow growth in the years ahead,” Welch continued. “I have had the chance to meet many members of management and the board and am impressed with their long-term vision for LKQ as the leading parts provider and true partner to its customers. I am excited to join the board and look forward to working collaboratively with management and my fellow board members.” ValueAct Capital owns approximately 7% of LKQ’s outstanding common stock. In connection with Welch’s appointment, the LKQ and ValueAct entered into a nomination and cooperation agreement, which will be filed as part of a current report on form 8-K. Source: LKQ
Positive test rates in the two counties have climbed sharply since the last week of May, when test rates stood at 3.2 and 4.55 positive, respectively. Counties have roughly a month to whittle down their COVID-19 numbers to at least 10 cases per 100,000 people and 5% positive test rates for three straight weeks to reopen schools. Oregon K-12 schools reopen around the second and third weeks of September as many school districts resort to online instruction-only models following outcry from teachers and parents over in-person instruction. On August 5, the Oregon Health Authority reported 342 new COVID-19 cases and five new deaths, bringing the statewide case total to 19,699 and the death toll to 333. We thank The Center Square for reprint permission.
and communities. “Conversations are ongoing about how those restrictions could work,” Boyle said. The U.S. Constitution’s 14th Amendment establishes the “right to travel,” and can be revoked through due process of law. Portland sees some of the heaviest interstate traffic in the state. The city’s I-205 bridge connecting it to Vancouver, WA, across the Columbia River sees 166,152 weekday crossings, according to research from the Southwest Washington Regional Transportation Council. Oregon counties bordering California, Washington and Idaho have shown some of the fastest rises in COVID-19 outbreaks in recent weeks. Brown has since rolled back the phased reopening of northeastern Umatilla and Morrow counties ahead of the school year. As of Aug. 5, Umatilla and Morrow counties are reporting roughly 23.5% and 22% positive test rates, respectively, Oregon Health Authority data shows.
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Continued from Cover
Still Up and Running edented times, so we have to be prepared and vigilant if we’re going protect the interests of small businesses, including body shops.” Keeping the Capitol safe for everyone on a daily basis is priority No. 1 right now, Molodanof said. The legislature is allowing members to vote remotely, especially those who are over 65 or have health concerns. All safety protocols have been put into place to assure no one gets the virus. Two people who work for the Assembly got the virus around the 4th of July but no cases have been reported since. Here is a brief list of bills that can affect body shops in California, either positively or negatively. AB 196 and AB 664: Workers Compensation—Coronavirus • CAA position: Oppose • Status: Pending in the Senate AB 196 would increase workers comp
costs for employers by “conclusively” presuming that contraction of coronavirus by essential employees is a workplace injury, without the ability of the employer to provide evidence to the contrary. “AB 196 is called a job killer by the CalChamber because if anyone on your crew gets the virus, it’s assumed that they got it at the shop, without an opportunity to provide other evidence,” Molodanof said. “Let’s say one of your techs claims that they got the virus at your workplace, but then later [you] find out that they went to a large COVID-19 party the week before. Under the bill, you would be prohibited from providing this evidence to the judge. “We are obviously concerned about this because in the end the shop will have to pay higher rates for their worker’s comp.”
from liability for an injury or illness to a person due to COVID-19 based on the claim the person contracted COVID-19 while at the small business or due to actions of the small business. “This one makes sense. If you go by the rules and follow local, state and federal regulations, laws and protocols, the shop shouldn’t be liable if someone claims they picked up the virus at your business,” Molodanof said. “California’s small businesses are the backbone of our economy. They need liability protection to continue serving the public and providing necessary jobs. They cannot afford to continue to operate in fear of frivolous lawsuits.”
AB 1035: COVID-19 Small Business Immunity from Civil Liability • CAA position: Support • Status: Pending in the Senate
This bill, with respect to policy of commercial insurance that provides for business interruption, would create a rebuttable presumption that COVID-19 was present on specified property and caused physical damage to the property which was a direct cause of the busi-
AB 1552: Business Interruption Insurance • CAA position: Monitor • Status: Pending in the Senate
This bill would exempt a small business with 25 or fewer employees
ness interruption. AB 2454: Trusted Dealer BAR Certification Program • CAA position: Concerns • Status: Not expected to move this year. This bill, among other things, would establish the “Trusted Dealer Certification” program. The program requires BAR to develop regulations to implement. Assemblymember Evan Low has indicated a desire to reintroduce the bill next year. AB 2999: Employees—Bereavement Leave • CAA position: Concerns • Status: Pending in the Senate This bill imposes on all employers a mandate to provide employees up to 10 days of unpaid bereavement leave for the death of a spouse, child, parent, sibling, grandparent or domestic partner. “We are concerned about this bill as written because we think that 10 days off might hamstring a crew that’s experienced slowdowns and furloughs,” he said. “Two weeks
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away from the job could significantly impact the business so we’re very concerned about this one.” AB 3216: Employee Leave and Expanding Paid Sick Leave—Coronavirus • CAA position: Oppose • Status: Pending in the Senate This bill expands family care and medical leave and expands paid sick leave. California law now requires 24 hours or three days paid sick days for all employees. AB 3216 would, among other things, require all employers to provide employees with at least 56 hours or seven days paid sick leave for any specified purpose related to a “state of emergency.” “This is another bill that can kill a small business,” Molodanof said. SB 1129: PAGA Reform • CAA position: Monitor • Status: Pending in the Senate, but expected to move this year The Private Attorney’s General Act (PAGA) authorizes aggrieved employees to file lawsuits against em-
ployers for labor code violations. This bill fixes exiting law that provides employers with limited “right to cure” for technical pay stub violations; and provides that for a violation in which employees do not suffer any actual economic or physical harm, the total aggregate penalty is no more than $5,000. BAR Shop Locator Program BAR has developed an application to make it easier for consumers to find auto repair shops, using data from the BAR website to locate shops based on ZIP codes and specialties (e.g. autobody shops.) The idea is to make the experience mobile-friendly for consumers. BAR is expected to roll out the application very soon. AB 1345: Private Post-Secondary Education • CAA position: Monitor • Status: Pending in the Senate This bill is part of a package targeting bad actors in private post-secondary education. This bill needs to be amended to address concerns; otherwise they will negatively im-
pact good schools including Universal Technical Institute. BAR Cite and Fine Regulations • CAA position: Concerns BAR has created an internal task force to review expanding the “cite and fine” disciplinary process. Currently, cite and fine is used for smog violations and unlicensed activity. Expanding cite and fine authority to apply to all ARDs would provide BAR field representatives with the ability to issue citations and fines— up to $5,000 per violation. Concerns have been raised by the industry. “BAR was expected to make a presentation at the July 16 BAR Advisory Group meeting in Sacramento,” he said. “But it has been delayed and this bill will now likely be pushed into next year. BAR offices have slowly re-opened to the public with restrictions. The BAR re-scheduled the BAR Advisory Group meeting to be held remotely, and we will participate in the meeting and report.” New DAD Smog Check Equipment
Requirements • CAA position: Monitor BAR is moving new regulations called “biometrics” which, among other things, will require smog stations using the DAD to obtain additional equipment, namely an external web camera and a palm vein reader (scanner.) The estimated cost for this new equipment is approximately $500. BAR was planning a public meeting on the regulations after the BAR Advisory Committee meeting, but it has been delayed. There are a dozen different ballot measures for voters to decide come this November. Some of the most noteworthy are: Prop 15: The “Split Roll” Initiative • CAA position: Oppose This measure will amend Prop 13 by requiring that commercial and industrial properties be assessed and taxed at current market value, rather than original price. The initiative exempts commercial and inSee Still Up and Running, Page 28
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Midyear Updates An interesting side note: anecdotally, most of the MSOs and shops that received PPP loans during the first application period obtained those loans from small and local banks and credit unions. Evidently the big banks focused on their largest customers. During the second application period, more loans were obtained from some of the big banks, but many MSOs not only didn’t get big bank loans, but some never even heard back after their inquiries. M&A Activity The current level of mergers and acquisition activity keeps surprising us. Not surprisingly, the top two national consolidators continue to make offers and acquire independent shops and MSOs. But private equity firms have really stepped up their interest and investments. Five super regional MSOs are also in acquisition mode. Add to these numbers several dozen sub-regional MSOs that are continuing to make acquisitions largely using internal capital sources. Finally, Driven Brands now owns a nine-shop MSO and is pursuing more acquisitions. Private Equity Interest is Driving Activity Industry buyers have changed dramatically in five years. Five years ago, the most active buyers included the four big consolidators—ABRA, Caliber, Service King and Gerber— plus seven regional MSOs—Pacific Elite, Kadels, Cooks, Craftsman, Joe Hudson, Classic Collision and Car Care—and one PE firm, Carousel Capital, which owned Driven Brands. In the years since, almost all of those firms have disappeared into larger firms. ▪ ABRA bought Cooks Collision, then sold to Caliber ▪ ABRA bought Kadels ▪ Pacific Elite got bought by PEbacked Crash Champions ▪ Car Care got bought by Service King ▪ Joe Hudson got bought by TSG Consumer private equity ▪ Carousel owned Driven Brands, which it subsequently sold to Roark
Capital ▪ Classic Collision was acquired by New Mountain Capital
platforms. OE certifications are driving increases in values—especially high-end brands.
We attribute the activity and the values to the number of new entrants into the collision space, mostly private equity firms—the highest we’ve seen in 20 years. New PE entrants have come flocking back to the market looking for opportunities that will benefit from increasing consolidation. Most see the stability and non-cyclical nature of collision repair as effective cash generators with modest risk. Some are looking to buy and then sell out to someone larger. And some are probably looking to coat-tail Caliber and Driven, if and when they have IPOs. PE firms come in lots of sizes and varieties. The new participants range from $350 million in assets to more than $16 billion. Some are inexperienced in the industry but anxious to learn. Some have hired CEOs who are highly skilled executives. Others have already found their platforms and are aggressively expanding. Ten are still looking for their first platform! All of them are looking for high quality large MSOs in major metro areas.
National Consolidators Just Keep on Buying Assisted by an additional capital raise in the second quarter, Gerber has acquired more than two dozen shops so far in 2020, including nine in Southern California, as it enters the largest U.S. market for the first time. Caliber Collision added more debt capital and continues its growth even as its revenues have slowed. In late July, it acquired one of the premier MSOs in the Southeast, when it closed on Professional Collision of Mobile, AL.
Deal Terms and Structures Today Five years ago, structures involved a variety of cash, stock, debt and earnouts with most deals being done for cash. Some deals were done as stock purchases, though most were asset purchases. Multiples ranged from five to nine times reconstructed EBITDA, with some outliers for very large MSOs. Increasingly, deals are being measured on purchase price to revenues, with smaller shops in the 35% to 45% and medium size MSOs in the 65% to 90% of revenues, depending upon the strategic fit, EBITDA levels and ongoing management teams. Today, we see the same variety of consideration with most all deals still being done as asset purchases. During this time of COVID, many are structured with both cash and earnouts with performance hurdles— some EBITDA based and some revenue based. Some are structured to share the risk between the sellers and the buyers. Multiples are trending lower for plain vanilla acquisitions but remain robust for quality
Multi-Regional MSOs Are Growing Most Rapidly Illinois-based Crash Champions, led by Matt Ebert, reached from Chicago across to Southern California to acquire 14-shop MSO Pacific Elite early this year using both equity and debt capital. In February, Crash added three shops in Ohio, and is on the hunt for more. Former ABRA senior executives
with the backing of a highly credible sponsor, New Mountain Capital, are deploying millions of new equity capital following their takeover of Classic Collision in Atlanta last year. Led by CEO Toan Nguyen, Classic expects to challenge Joe Hudson’s position as the fourth-largest operator in the U.S. Classic now has eight of its 37 locations in south Florida, including the acquisition of the former Carolina Auto Body. (Full disclosure: Focus Advisors represented Carolina Auto Body.) Joe Hudson’s continues to beef up its management ranks and consider additional acquisitions across its Sunbelt markets. Texas-based ProCare acquired six-shop Houston operator Hodges Collision to bring its total to 41 shops. Regional MSOs are Preparing for Growth Chilton Auto Body, a 12-shop MSO in the San Francisco Bay Area, recently hired Chris Abraham, former CEO of Service King, and a team of acquisition professionals with expectations of growing substantially. Oklahoma-based Collision
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Works added eight shops with a large acquisition last year, and now operates 33 locations in Oklahoma and Kansas. The Collision Works team is sized to add more capital and acquisitions. Franchise and Affiliation Opportunities Accelerate Franchisors and banner networks are finding increasing success as operators seek multiple ways to increase partnerships and revenues. Driven Brands’ portfolio of franchisors---CARSTAR, ABRA, MAACO and FIX USA---is continuing to add franchisees, as well as expand its portfolio of other automotive industry participants. Driven’s April acquisition of FIX USA and its largest franchisee, Auto Center Auto Body, reinforced its hold on most of the “waterfront” franchise opportunities. (Full disclosure: Focus Advisors represented FIX USA.) Two banner groups, CCG and 1 Collision, are growing as well. 1 Collision, which has now merged with Canada-based CSN, is expecting to rapidly add new affiliates to its current U.S. network of 50 shops. Together, the combined companies have more than 280 shops. California-based Certified Collision Group now claims more than 450 shops with $2 billion in gross revenues across the U.S. With some of the country’s largest independent MSOs in the fold, CCG is focused on helping them gain additional DRP and vendor relationships. Our Expectations Our best estimate is that 2020 will end with revenues annualizing at 80% of 2019 revenues. A realistic expectation for 2021 is that shop revenues will return to 2019 revenues. Miles driven will
continue to be negatively impacted by a slowly returning economy, but positively impacted by people’s willingness and need to travel more securely without exposure to potential infections. With many more vacation and business trips being taken, miles driven should be positively impacted. The Federal Reserve has been cautioning that damage to the entire economy is profound, deep and expected to impact us all for years ahead. So, while we are inclined to be optimistic, we believe caution is more realistic. When there is a widely available and distributed COVID-19 vaccine, revenues will accelerate rapidly as confidence in normal economic activity returns and overall economic growth begins to accelerate. What is the net result for the collision repair industry? Continued uncertainty, but not widespread disaster. Questions We Answer Every Day Should I sell now or should I wait two years until the economy and my revenues improve? For some folks, their age and their lack of a successor dictates they sell now. Others with a succession plan---or, even better, a growth plan---have the best of both worlds. Acquirers are still looking favorably on targets today. In two years they may be less aggressive because they will have already bought their key platforms and may only looking for smaller fold-in acquisitions. For sub-regionals determined to grow into super regionals, accessing capital today is likely to be easier than in two years because of strong PE interest. Values are always suppressed when there are many sellers and a
limited number of buyers. If everybody is heading for the exits at the same time, there is a danger some deals just won’t get done and that acquirers will use that opportunity to reduce valuations. Everything else being equal, savvy sellers prefer to go into the market when there are more buyers and fewer sellers. For many owners, it’s a balancing act between the growth they expect in the years ahead versus the opportunity to sell when there are multiple buyers willing to make them fair offers. With trillions and trillions of dollars being spent by the government to prevent the collapse of the economy, there will come a time, sooner rather than later, where taxes will rise to begin reducing the debt. Our expectation is that capital gains taxes are likely to rise first. Closing a transaction in 2020 may avoid a significantly greater tax hit in 2021. What kind deal structure is possible today? Acquisition deals are likely to be structured differently than in the past. We expect less cash up front and more earned out by achieving perfor-
mance hurdles over time. Sellers may also be asked to finance part of the acquisition price. On the plus side, many of the private equity investors are creating vehicles in which sellers can roll over a portion of their sale proceeds into equity ownership positions. Will these new investors actually close on the offers they have extended? Most professional buyers that issue Letters of Intent have an established track record of honoring their purchase commitments. Even in the time of COVID, deals negotiated before the pandemic hit were largely fulfilled, although some had structural and hurdle requirements added. Inexperienced or first-time buyers may have a harder time holding the pricing of their offers as their private equity sponsors have fewer transactions under their belts. And if there is a long-term recession of incredible depth, that would be a material change that would impact valuations and closings. We thank Focus Advisors for reprint permission.
Hertz Settlement Calls for Disposal of 182,521 Vehicles by ARN staff
Hertz Global Holdings has reached an interim settlement with debtors to suspend litigation related to the car rental company’s plan to reduce its leased fleet of rental cars, according to an SEC filing on July 24. Under the terms of the agreement, Hertz agrees to pay $650 million of rent in equal monthly
installments from July to December of this year and dispose of at least 182,521 leased vehicles between June 1 and Dec. 31. In return, litigation relating to the leases under the asset-backed finance facility (ABS) will be suspended. We thank Auto Rental News for reprint permission.
20 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com
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‘Industry Relations’ Allstate, agreed the revamp offered an opportunity to be “evocateurs” to the industry. Allen said the point was to address “real challenges,” but stop talking “up and over.” The idea was to find something on which the industry could find more agreement, he said. “The CIC Industry Relations Committee will foster discussions that identify topics that the Industry would benefit from gaining alignment on,” the committee’s purpose states. Keller said “alignment” was the key word here. “How are we gonna do that?” he said. “Very carefully.” The committee planned a “very interactive” setup with open mics for a lively and engaging dialogue, he said. It also planned to leverage but not interfere with work done in other CIC committees, he said. Engaging other segments of the industry also was a goal, Allen said. For example, he said, if a paint company wanted to talk about an issue,
it should bring it to the committee. Committee member Amber Alley, of Barsotti’s Body and Fender, said she’s seen issues left in a stalemate during her 2.5 years on the Insurer-Repairer Relations Committee. “Neither side is wiling to give,” she said. She hoped the introduction of perspectives from segments outside of the auto body repair and insurance industries would lead to greater appreciation of others’ views and find actual resolutions, rather than applying “Band-Aids on problems that we all know exist.” Algie felt the new committee format could accomplish more than the old Insurer-Repairer Relations iteration. The presence of a third party might “calm the waters a little bit,” he said. The Industry Relations Committee’s plans for its first two official CIC discussions suggest its new direction. During the SEMA Week CIC meeting, the body would discuss operating in a pandemic, Keller said. (The live SEMA has since been cancelled, but CIC plans to convene in November, albeit virtually.) The January 2021 CIC
would examine artificial intelligence, Keller said. “This is a great starting point,” Alley said of the planned conversation on COVID-19 lessons. Nobody had experienced such a thing, and it would be naive to assume anyone in the room emerged without some negative impact, she said. Sharing successes and failures from the experience could lead to a vision for the future, she said. The committee provided a teaser of sorts for the COVID-19 discussion with comments from two of the panel’s insurers. Committee member Scott Kohl, of Liberty Mutual, noted his company has about 3,500 shops on its direct repair program. “It hit each one very, very different,” he said of COVID-19. Fellow committee member Jonathan Chase, of National General, pointed to the matter of cleaning fees. All stakeholders wanted to collaborate and do the right thing, but different parties obtained information in “different spots,” he said. Since the issue is fresh in everyone’s mind, it can be used as an example of how to to work better
together in the future, Case said. The committee wasn’t trying to say anyone acted incorrectly; rather, it wanted to discuss the different approaches, he said. Treating the cleaning issue as a case study would make everyone more effective, he said. Chase recalled “being confronted daily” with a changing environment and talking to “MSO partners” and other vendors and peers. Everyone wanted to take care of the customer and deliver safety, but the experience still proved difficult “because we weren’t all talking together,” Chase said. If the topic of cleaning a car left stakeholders struggling, it could be even harder to handle a customer complaint about their Level 5 self-driving car, but “it’s coming,” he said. We thank Repairer Driven News for reprint permission.
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22 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com
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Auto Club Warns Vehicles Could Cause Wildfires Vehicles have been the cause of some of California’s largest, most expensive fires, including the 2017 Carr Fire near Redding. Costing more than $1.6 billion, the Carr Fire started when a trailer blowout caused the metal rim to spark, igniting roadside vegetation.
More recently, Cal Fire officials said a diesel-fueled vehicle emitting burning carbon from the exhaust system was to blame for starting the Apple Fire near Banning late last month. With temperatures in many parts of Southern California expected to be in the mid-90s to low 100s, the Automobile Club of
Southern California offers the following tips to help vehicle owners prevent wildfires: Stay on Paved Surfaces If you need to pull over, stay on paved surfaces to avoid dry vegetation. Don’t park on the side of the road where flammables, including dry grass, may reach hot parts of the vehicle, including the muffler or catalytic converter. Secure Chains Practice safe towing. Dragging chains throws sparks. Use appropriate safety pins and hitch ball to secure chains. No Dragging Parts Make sure your vehicle is properly maintained, with nothing dragging on the ground, such as a loose muffler or cables. Check Tire Condition and Pressure Be sure your tires have sufficient
tread and aren’t too worn. If they blow out, driving on an exposed tire rim can throw sparks. Maintain proper tire pressure. Under-inflated tires can cause more friction which can lead to a blowout. Carry a Fire Extinguisher Learn how to use a fire extinguisher and get one for your vehicle. Properly Maintain Brakes Brakes worn too thin may cause metal to metal contact, which can cause a spark. Look for Fluid Leaks If you spot leaks, get them checked out. Most vehicle fluids are flammable. Heat and electrical sparks that touch leaking fluid can ignite a fire. When driving, look for rapid changes in fuel or fluid level or increased engine temperature which may indicated a leak. Avoid Transporting Gasoline In Your Vehicle
If you must carry gasoline, take only a small amount in a certified, sealed gas can and place the container in the trunk of your car or in the bed of your truck---never in the passenger compartment. Drive Safely Don’t drive intoxicated. Don’t drive intexticated. Keep your eyes on the road to avoid crashes and pay attention to other drivers. Keep the Vehicle Maintained Have the vehicle regularly serviced by a trained mechanic. They can spot cracked or loose wires and hoses, oil or fluid leaks. If the Car Catches Fire Pull over quickly and safely. Once stopped, turn off the engine and get everybody out of the vehicle. Call 911. If you have a fire extinguisher and can use it safely, attempt to put out the fire. Source: Automobile Club of Southern California
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PPP Forgiveness ic,” Peterson said July 23 during the AICPA’s weekly Town Hall covering PPP and other issues related to the COVID-19 recession and recovery efforts. Erik Asgeirsson, CEO of CPA.com, the technology and business subsidiary of the AICPA, said during the Town Hall the SBA and Treasury are not expected to release the expected 25 to 30 FAQs before President Donald Trump signs new relief legislation. Congress is trying to hammer out a package before going on recess Aug. 8. Even if the FAQs do come out, the SBA issued a procedural notice July 23 that indicated it would not begin accepting PPP forgiveness submissions from lenders until a new software-as-a-service platform currently under development goes live Aug. 10. The SBA said the launch could be delayed if new legislation changes the forgiveness process in ways that require changes to the new platform. The SBA’s notice adds another reason for waiting to work on PPP loan forgiveness applications to those covered in an AICPA blog post that published July 14, said Mark Koziel, CPA, CGMA, the AICPA’s executive vice president of public practice. “We have to be as patient as
possible,” he said. The real PPP forgiveness deadline Kari Hipsak, CPA, CGMA, an association senior manager, said in an interview the important deadline in the PPP forgiveness process doesn’t come until 10 months after the end of the loan’s covered period. At that point, if forgiveness forms have not been submitted, the funds officially become a loan that needs to be repaid. Hipsak said it’s best for borrowers to take their time and make sure they have as much information as possible so they can maximize loan forgiveness. “There’s no need to rush through the forgiveness,” she said. “A lot of businesses, I think, want to put the forgiveness behind them, but there are still a lot of unanswered questions. And so as long as there’s not a deadline to have this application submitted, other than 10 months after the end of the covered period, it’s really a business decision.” Some additional considerations related to PPP forgiveness include: Questions about utilities: Utilities are among the items besides payroll that borrowers can pay with PPP funds. But there are questions about what qualifies as a utility under the PPP guidance. “It includes the basics, such as trash collection, water, electricity, etc., but we get a lot of questions about business-specific utilities,” Hipsak said. “And there is even some guidance that indicates that
transportation costs such as fuel for a business vehicle is includible. But we don’t have all the answers for that yet.” Internet services, which have become even more vital in this time of social distancing, appear to qualify as utilities under the PPP, Hipsak said. Many exceptions to full-time-equivalent (FTE) rules: The PPP was designed to help organizations keep paying their employees as pandemic-related closures and slowdowns reduced revenue. As a result, employers who reduce their workforce generally see a reduction in their PPP forgiveness eligibility amount. But there are numerous exceptions for situations such as: An employee who was offered a chance to return to a position but refused. An employee who was fired for cause or voluntarily resigned. An employee who voluntarily requested and received a reduction in hours. There are additional exceptions as well to the FTE and wage rules, and borrowers should be aware of them when they apply for forgive-
ness. Clarification needed for self-employed borrowers: PPP guidance states that self-employed individuals must compare their 2020 income with their 2019 income to determine their maximum eligible compensation. “If you’re a self-employed individual, how do you prove what you got paid in 2020?” Hipsak said. “That’s one big question that remains for self-employed individuals.” Documentation is critical. The forgiveness applications are extremely detailed, and the final rules are uncertain in some areas. Some documentation isn’t required for submission with the forgiveness application but is required to be retained by the borrower. So it’s important to keep documentation of any facts that could become an issue related to forgiveness. “It’s always easier to be prepared going into something than having to look in hindsight and collect all the necessary data,” Hipsak said. We thank the Journal of Accountancy for reprint permission.
CA Body Shop Offers Service to Keep Cars Clean During Pandemic by Erin Roney, Bakersfield Now
The pandemic has hit a lot of businesses hard, but Color Coat Restoration found a way to keep customers coming in while helping the Bakersfield, CA, area. The auto body shop started offering the option to disinfect cars back in March. They are using an E-FECTicide, saying it’s EPA approved and used to disinfect high touch areas. CCR says it’s the same product used to clean hospitals, nursing homes and patient rooms. The service is drawing more people into their shop, seeing about 35 to 40 cars a day. “I think just more concerned
citizens coming in, looking out for their family, making sure they are safe, making sure the virus is kept down to a minimum,” said Gilbert Pacheco with Color Coat Restoration. CCR says the it’s about $15 dollars to have them disinfect a customer’s car, but it’s free with another service. It takes about half an hour to an hour to do. We thank Bakersfield Now for reprint permission.
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A Car and Its Boy: WA Teen’s 16th Birthday Present is a Driver’s Dream by Jedidiah Maynes, Walla Walla Lifestyles
Drew Morgan had never met the car before. It had been rolled out of a barn in the dark of night and whisked away to a repair shop in Yakima, WA. He knew some basics about it—year, make, model, color. But his 16th birthday present was still a bit of a mystery until the day he finally was united with it in Milton-Freewater. The 1966 Volvo P1800 wasn’t necessarily his first choice, either. When he was young, his first choice may have been a train. He faithfully watched Thomas the Tank Engine, and then he graduated to
Drew Morgan looks on as work is being done on his Volvo by Jim Johnson. Credit: Greg Lehman, Walla Walla Lifestyles
model trains before eventually becoming obsessed with cars around age 12. “If they made a movie about [Drew] it would be called ‘Trains, Guitars and Cars,’” said his mother, Belle Altera. “Because that’s how he started—trains, guitars and cars.” As his admiration for the automobile grew, there was one in particular for which he had an affinity. “I watched ‘Charlie’s Angels’ as a kid and they had that one car in it and I always loved it—the ‘70s Mustang,” Morgan said. “I always said, ‘hey, I want one of those.’” It was the first car he looked for when he was given the gift of choosing a car for his 16th birthday. He poked around on Craigslist and eBay but to no avail. So his mother encouraged him to maybe look for something different. “So then I looked around and looked at the most reliable classic cars,” Morgan said. “Classic cars for the daily drive. Cars that are practical but also cool.” He saw the P1800 and assumed it was too expensive, just by looking
at it. He also didn’t know it was a Volvo, so when his mother recommended the Volvo brand, he came across a P1800 for sale in Olympia. The white 1970s era model was about $10,000 and in decent condition. Morgan thought about it for about a week. During that time, it went on eBay and sold for half the price at auction. “About a week later I was looking around again because I was kind of unhappy that I missed it for half the price,” Morgan said. “Then while we were just sitting around and looking on Craigslist I found one in Tri-Cities.” It was a red 1966 Volvo P1800. They emailed the owner right away. The owner responded and said two other offers were in the works, with one person offering to pick it up the next day. So mother-son duo called on a friend from Yakima who could pick it up with a trailer. They also needed a way to pay the owner in cash without being there. Their friend happened to have the cash they needed so they could pay him back. “So it must be a God thing, you know,” Morgan said. Time was of the essence, because the other buyer was still planning on coming by with an offer to beat Morgan’s in the morning. Their friend rolled the car out of a barn in the middle of the night and drove it to another friend’s shop in Yakima. “It took him a couple of days to look at it and he said, ‘what have you gotten yourselves into?’” Morgan recalled. The car was rusted out in some places and the floor was so bad, that the mechanic said the bottom could fall and it would “be like the Flintstone’s car,” Morgan said. “We called around to a bunch of body shops and ... they didn’t even want the job,” Morgan said. “They were scared of it.” Since the family was planning on moving to the Walla Walla Valley soon, they called some friends in the area and they eventually were directed to Jim Johnson at Jim’s Body Shop in Milton-Freewater. So their friend loaded up the fixer upper and it arrived in Mil-
ton-Freewater where Morgan finally got his first look at his car. “It was not exactly what we expected,” Morgan said with a chuckle. “(Jim) looked at it and said, ‘this is a big job but I think I can do it.’” So several months of repair work began. Johnson lets Morgan get hands-on with the project when possible.
A new floor was fashioned for Drew’s 1966 Volvo P1800. Credit: Greg Lehman, Walla Walla Lifestyles
Altera noted how much work Johnson put into it. “It wouldn’t have been possible without him,” Altera said. Johnson was worried about getting parts, but Morgan was able to find
a Sweden-based seller online where they could get the exact parts necessary. With Johnson’s expertise, the car has been returning to its former beauty. “He’s been really diligent on making sure it’s a good and safe car,” Morgan said. “He’s making sure it’s done right.” Morgan purchased the car in October and he hopes to have it ready to roll by the time September rolls around. He plans to enter into as many car shows as possible, including Wheelin’ Walla Walla Weekend, which was still on the calendar at the time this story was written. Morgan says while he probably will only drive this coupe on the weekends, but does hope to keep his first car for the rest of his life. “Most people try to find their original car when they’re 50 because they got rid of it and they want to replace it,” he said. “I hope to be the one who kept it the whole time.” We thank Walla Walla Lifestyles for reprint permission.
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Maaco Franchisee Holds Fundraiser for Boise Resident Injured in Home Invasion Maaco Collision Repair and Auto Painting franchisee Matt Davlin believes it is part of his responsibility as a business owner to give back to his community. “If you are going to be a part of the community, and want the community to support you, then you need to support your community in return,” said Davlin. “The Maaco brand recognition and brand awareness provide me the ability to use it to help others in our community when they are in need.” Two months ago, two teenagers broke into a house in the outskirts of Boise, ID, and in the process, shot the homeowner, Jason Mullins, and his son. Mullins was shot three times, resulting in the replacement of his upper femur, and his son was shot in the foot. Since then, it has been a struggle for Mullins, with the combination of recovery, medical bills and not being able to work. Mullin is self-employed as a house painter. Davlin and his partners at the Maaco Collision Repair and Auto Painting in Boise, along with the Nelson Farmers Insurance Agen-
cy, stepped up to help Mullins with some of the financial burden from being unable to work. “Like many people who own their own businesses, if you can’t work, you can’t support your family,” said Davlin. “I feel fortunate that I have my own business,
Pictured, left to right, are James Houser, Jason Mullins, Holly Mullins, Matt Davlin and Carley Neff
backed by the recognition of a national brand like Maaco, that can help us raise money for others in our community.” The initial car wash fundraiser generated $2,500. Since then, Davlin has continued to solicit an additional $2,000 in pledges and
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donations from other Boise businesses. Although Davlin has been a Maaco franchisee for just a little more than two years, this is his second major fundraiser for a member of the local community. He and his team helped to raise money for a family with a child who has severe disabilities. The money raised allowed them to buy equipment that enabled them to care for their child at home. “There is a saying that I always thought was a good motto to live by—’With great power, comes great responsibility,’” said Davlin. “Some people may recognize that from Spiderman movies. It’s a motto that I believe in and have always tried to live by.” Anyone wishing to help the Mullins family can follow this link‒https://www.facebook.com/ donate/292040235473655/? fundraiser_source=external_url To learn more about franchising opportunities with Maaco, visit www.franchisewithmaaco.com. Source: Maaco
Still Up and Running dustrial properties worth less than $3 million. “This is a big one because it will impact every small business in the state,” Molodanof said. “Whether you’re a tenant or a landlord, this could be devastating because many shops won’t be able to withstand a huge tax bill—especially now.” • Prop 22: Referendum on AB 5 • CAA position: No position This measure would allow drivers for companies like Lyft, Uber and Door Dash to continue to be classified as independent contractors, not subject to minimum wage, unemployment taxes and worker’s comp. • Prop 24: Consumer Privacy • CAA position: Monitor California privacy laws will get tougher under this initiative which will, among other things, create a Privacy Protection Agency to enforce laws and increase penalties against businesses that commit violations.
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28 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com
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Uber and Lyft Sued for ‘Unpaid Wages’ by California Labor Commissioner Over Driver Classification by Ethan Baron, The Mercury News
California opened a new front in its battle against Uber and Lyft over their classification of drivers as contractors instead of employees, with the state’s labor commissioner on Aug. 5 filing suit against the two companies. The San Francisco ride-hailing firms decided from the start of their operations to “misclassify” their drivers “as a means of unlawfully depriving these workers of a host of statutory protections applicable to employees, in direct contravention of California law,” according to the separate but nearly identical lawsuits filed in state court in Alameda County claimed. The Aug. 5 action is the latest in a long line of legal disputes stemming from the passage of California’s AB-5 gig worker law, which took effect Jan. 1. The law requires many workers considered contractors by their employers to be reclassified as employees and receive employment benefits and protections. Uber has sued the state, arguing that AB-5 is unconstitutional. Uber and Lyft have put at least $30 million toward a ballot measure that would
overturn that law. And in May, state Attorney General Xavier Becerra filed suit against the two companies, seeking a court order forcing them to reclassify drivers. The companies’ designation of drivers as contract workers has become particularly problematic for California amid the coronavirus pandemic, with stay-home orders eviscerating demand for ride-hailing and the state agreeing to pay unemployment benefits to outof-work drivers despite Uber and Lyft not having paid into the state’s unemployment fund. A UC Berkeley Labor Center report in May estimated that if the firms had treated their drivers as employees between 2014 and 2019, Uber and Lyft would have contributed a combined $413 million. Central to the dispute between the state and the companies is the degree to which drivers control their work and compensation, with California arguing the firms are in charge and the firms countering that drivers have substantial independence. Harry Campbell, who publishes a blog and newsletter followed by tens of thousands of ride-hailing drivers, estimates there are 400,000 to 500,000
Uber and Lyft drivers in California. Uber on Aug. 5 said it hadn’t yet been served with the suit, but argued that the “vast majority” of drivers want to work independently. “We’ve already made significant changes to our app to ensure that remains the case under state law,” Uber said in an emailed statement. “When 3 million Californians are without a job, our leaders should be focused on creating work, not trying to shut down an entire industry.” Lyft accused state labor officials of botching “thousands of claims” for pandemic-related unemployment benefits. “They know they don’t have the ability to process these claims, so they sent them into a legal abyss, where they know it will take years to resolve them,” the company claimed in an emailed statement. In both suits, Labor Commissioner Lilia García-Brower is seeking orders banning Uber and Lyft from classifying drivers as contractors, plus payment by the companies of “unpaid wages” owed to drivers, and unspecified damages and penalties. We thank The Mercury News for reprint permission.
Dean Fisher Now I-CAR Board Member Driven Brands™, North America’s leading group of automotive aftermarket brands, proudly announces Dean Fisher, collision group president, has been elected as a board member for the Inter-Industry Conference on Auto Collision Repair (I-CAR.) “Dean has a wealth of industry knowledge as he has been a part of the collision repair industry his whole life,” said Michael Macaluso, paint, collision & glass group president and EVP, Driven Brands. “His perspective is always deeply valued within our organization and we know his dedication to helping the industry thrive will be a welcomed addition to this respected group of board members.” “The complexities added to the automobile will only continue, as consumer expectations evolve more rapidly than ever before,” Fisher said. Source: Driven Brands
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98th Soldier Wins Dream Automotive Job at Kindig-it Design by Maj. Michelle Lunato, DVIDS Hub
People who are passionate about cars undoubtedly know the MotorTrend Television show, “Bitchin’ Rides.” Capt. Frank Fanelli of the 98th Training Division (Initial Entry Training) certainly did, as a “selftaught hot rod builder and pinstriper” on YouTube. In fact, the U.S. Army Reserve soldier watched the show often as a form of education; he just never dreamed he’d work there. But after competing in a televised special, “Bitchin’ Boot Camp,” Fanelli won just that—a job at Kindig-it Design in Salt Lake City, UT. “I used to watch the show when I was younger, envious of what they were doing and wanting to be a part of that, and now I actually work there and I am a part of that crew. It’s kind of surreal,” said Fanelli, a Kendall, NY, resident who was recently the company commander of Echo Company, 2nd Battalion, 389th Regiment, 3rd Brigade, in Mattydale, NY. Fanelli’s surprise job was indeed just that. Out of the blue, he received a phone call from someone who had seen his YouTube page, “Fanelli Restorations,” and suggested that he apply to be on the upcoming special, “Bitchin’ Boot Camp,” a televised building competition where 12 highly skilled fabricators compete for a chance to join the Kindig-it Design crew. Fanelli, being very familiar with the main show, “Bitchin’ Rides,” said he didn’t even want to try out. “I didn’t think I was going to make it to begin with, so I didn’t even want to waste my time.” With more than 2,000 fabricators from across the U.S. applying and no formal automotive education, the U.S. Army Reserve soldier just figured the opportunity was too good to be true. “I don’t have a shot at this. There’s got to be so many more talented people out there than me,” said Fanelli. However, his mother and brother insisted he seize the chance at a dream. So he put together his car resume, gathered up pictures of his work and submitted an audition video from his YouTube page.
“This is my passion right here. I want to bring my skills to the table with you guys. It’s time for me to take it to the next level,” stated Fanelli in his November 2019 audition video. And with that, he made the cut to be one of the 12 fabricators who would compete for the coveted job at Kindig-it Design. So after being selected, Fanelli packed up his car and headed to Salt Lake City for the adventure, but still didn’t think much of it. “I thought, I will probably last an episode. Whatever. So I kind of went in there throwing it to the wind and tried my best, but not really thinking I had a shot in it.” True to the name, “Bitchin’ Boot Camp,” the 17-day competition kept the 12 competitors moving, on edge and in the dark about what to expect next. There was a mix of individual and team challenges over the fastpaced, ever-changing list of tasks. From making a traditional hot rod speed bulge to fabricating a full stainless steel dual exhaust system, the competitors were tested mentally and physically on both their skill and teamwork. At times, the competition’s grueling demands took its toll on the competitors, who were let go one by one as the competition progressed. This is where Fanelli’s military experience gave him an edge though. “The whole military mindset of understanding change, and how you can get unexpected things coming your way, and adapt to it, totally played into how I was able to keep my cool during the whole show,” said Fanelli. This ability to remain calm, and even positive, under pressure was noticed by many on the show—so much so it was nicknamed the “Fanelli Finesse.” “Frank doesn’t ever let anything affect his positive attitude. As probably the best team player in the Bitchin’ Boot Camp, his inexperience doesn’t seem to be holding him back as much as in the beginning of the competition,” said Hot Rod Magazine’s Week 4 Recap on the special series. So his inexperience in some technical areas was overlooked due to his resiliency and ability to make
decisions in chaos, which came directly from his eight years of service in both the Active Duty and Reserve components.
U.S. Army Reserve Capt. Frank Fanelli, a Kendall, NY, resident who is the commander for Echo Company, 2nd Battalion, 389th Regiment, 3rd Brigade, 98th Training Division (Initial Entry Training), works on a door handle for the Week 6 Challenge of the MotorTrend Television special, “Bitchin’ Boot Camp” in Salt Lake City, UT. The 17-day televised competition concluded with Fanelli winning a job offer at Kindig-it Design. Credit: MotorTrend Magazine Courtesy photo
Fanelli explained that he didn’t always know how to do some of the challenges, or there were a large number of tasks in a short period of time. Instead of letting the stress get to him, he pulled from his military experience, remained calm and moved forward with what he thought was
RN
SOUTHE
the best decision at the time, which is exactly what he teaches his Reserve Officers’ Training Corps cadets at SUNY Brockport, where he worked as a government contract instructor. “This is the same stuff we train the cadets to do. Sometimes you have time to plan, and have the leisure of planning an operation the way you want to. And other times, you have to make a decision on the spot because the mission depends on it. That’s kind of how it felt during the challenges [on the show.]” However, seeing the value in these particular skill sets only came from the vantage of hindsight. Prior to winning, Fanelli said he was more concerned with the technical aspects of the competition. He knew he had skill and passion, but he just wasn’t sure if it was enough for the level of expertise at Kindig-it Design. “Not that I really doubt myself so much, I guess I was trying to really measure up what I thought my skill set was versus the potential of other people, but I really didn’t consider See 98th Soldier Wins, Page 43
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32 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com
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Please contact these dealers for your Honda or Acura Genuine parts needs. HONDA CALIFORNIA
CALIFORNIA
CALIFORNIA
NEVADA
AutoNation Honda Roseville
Honda of the Desert
800-262-3201 916-783-5628
Dept. Hours: M-F 7-6; Sat 7-5 mpartridge@honda111.com
Dept. Hours: M-F 7-6:30; Sat 7-5 mluna@scottrobinson.com
Dept. Hours: M-F 7:30-6; Sat 8-5:30 autonationhondaparts@hotmail.com
Larry Hopkins Honda
Selma Honda
Barber Honda
408-720-0221 408-736-2608
800-717-3562 559-891-5111
Roseville
Bakersfield
661-396-4235
Dept. Hours: M-F 8-5:30 bestchoice@barberhonda.com
Galpin Honda Mission Hills
800-GO GALPIN 818-778-2005
Dept. Hours: M-F 7:30-6; Sat 8-2 mteeman@galpin.com
Honda of Hollywood
Cathedral City
760-770-0828
Scott Robinson Honda Torrance
310-371-8320
Sunnyvale
Selma
Dept. Hours: M-Sat 8-5 parts1@hopkinsdirect.com
Dept. Hours: M-F 7-6; Sat 7:30-4:30 hondapartsmgr@selmaautomall.com
Metro Honda
Sierra Honda
800-446-5697 909-625-8960
800-322-8540 626-932-5614
Montclair
Dept. Hours: M-F 7:30-5:30; Sat 7:30-4 wholesaleparts@metrohonda.com
Ocean Honda Santa Cruz
Monrovia
Dept. Hours: M-F 7-6; Sat 8-4 parts@sierracars.com
Larry H. Miller Honda
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Pacific Honda
888-941-2218 208-947-6060
Honda of Oakland
858-565-9402
800-371-3719 323-466-3205
Oakland
510-547-8047
Dept. Hours: M-F 7-8; Sat 7-6
Honda of Pasadena Pasadena
800-433-0676 626-683-5880
Dept. Hours: M-F 7-6; Sat 8-4:30 mickw@oceanhondasantacruz.com San Diego
jgardiner@pacifichonda.com
San Francisco Honda 415-913-5125
Dept. Hours: M-F 7-6; Sat 8-5 fhhparts@findlayauto.com OREGON
Lithia Honda of Medford Medford
888-471-7445 541-770-3763
Dept. Hours: M-Sat 7:30-6; Sun 10-5 medfordhondaparts@lithia.com WASHINGTON
Hinshaw’s Honda 253-288-1069
Boise
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Dept. Hours: M-F 7-6; Sat 8-5
McCurley Integrity Honda
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Dept. Hours: M-F 7:30-5:30; Sat 8-5 fsanchez@findlayauto.com
South Tacoma Honda
San Francisco
Dept. Hours: M-F 8-5 partsws@sfhonda.com
Henderson
888-234-4498 702-568-3531
Auburn
IDAHO
831-464-1800
Hollywood
Findlay Honda Henderson
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925-680-4233
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Bakersfield
Dept. Hours: Mon-Sat 7-6 keith.whisten@cacargroup.com
Dept. Hours: M-F 7:30-5:30 bakersfieldacuraservice@yahoo.com
Acura of Fremont
Marin Acura
888-435-0504 510-431-2560
800-77-Acura 415-927-5350
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Honolulu
Dept. Hours: M-F 8-5; Sat 8-4 Johara@lithia.com Tokuda@lithia.com RayleenGarcia@lithia.com
Dept. Hours: M-F 8-5:30; Sat 8-4 parts@marinacura.com
Lyle Pearson Acura
Acura of Pleasanton
Metro Acura
888-985-6342 925-251-7126
800-446-5697 909-625-8960
800-621-1775 208-377-3900
Dept. Hours: M-F 7:30-6; Sat 8-6 mitch.cash@hendrickauto.com
Montclair
Dept. Hours: M-F 7-6; Sat 8-4 jmoore@findlayauto.com WASHINGTON
Hinshaw’s Acura
IDAHO
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Henderson
Boise
Fife
253-926-3331
Dept. Hours: M-F 7-6; Sat 8-5 johnny@hinshaws.com
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autobodynews.com / SEPTEMBER 2020 AUTOBODY NEWS 33
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with Stacey Phillips
From the Desk of Mike Anderson with Mike Anderson
Mike Anderson is the president and owner of Collision Advice, a consulting company for the auto body/collision repair industry. For nearly 25 years, he was the owner of Wagonwork Collision Center, an OEM-certified, full-service auto body repair facility in Alexandria, VA.
More Best Practices to Make the Most of the ‘Parts’ Portion of Your Business In a previous column https://www. autobodynews.com/index.php/ from-the-desk-of-mike-anderson/ item/20425-from-the-desk-of-mikeanderson-making-the-most-of-theparts-portion-of-your-business.html I shared some best practices shops can use to improve their parts-related processes and profits. Here a few more. Best Practice: Check the OEM information. You might presume that checking OEM collision repair information for each repair is something related to just procedures. But it also plays a role in streamlining your parts processes as well. One way in particular: Identifying any non-reusable or one-time-use parts that need to be on your estimate and parts order. We’re not just talking about clips and fasteners. On some vehicles, there are interior or exterior trim pieces that are one-time-use, as well as some suspension or supplemental restraint system parts. It’s important to know that while the estimating systems are doing a better job of identifying all one-timeuse parts, those systems—nor even the OEM electronic parts catalogs— identify all of them. The only way to make sure you are aware of all of them is to read the OEM repair information. Not all of the automakers identify one-time-use parts in the same way. Toyota/Lexus, for example, uses a black dot to indicate something is a non-reusable part. Nissan/Infiniti uses a black dot with a white X; sometimes these parts are color-coded in the automaker’s documentation. Mazda uses a white “R,” Subaru uses a star and Ford uses a symbol of a trash can to signal something is a one-time-use part. There are other automakers, such as BMW, General Motors and Porsche, that currently don’t have a symbol, but instead use wording within the procedures to identify one-timeuse parts. It might say, “Remove and replace,” for example, or “Remove and discard,” or “This is a non-reus-
able part.” So you can’t just glance at the OEM repair procedures. Take the time to read them thoroughly. And when you list one-time-use parts on your estimate, include a line note indicating that the OEM has designated it as such. The OEM repair procedures can also alert you about which parts can be repaired and which cannot. Many automakers, for example, say that components of certain strengths of steel should not be repaired, only replaced. The procedures also can designate “if this, then that” statements related to parts. One example might be “If an airbag deploys,” then certain other parts on the vehicle must be replaced, even if they don’t appear damaged. The time to have all this information is up front, so you don’t get into a job and only then discover you didn’t order all the parts the OEM procedures require. Best Practice: Improve the parts information in the estimating systems—for yourself and the rest of the industry. If you determine a part needed as part of a repair wasn’t shown in the estimating system, or if you find some other information gap, like a one-time-use part not being identified in the estimating system, don’t just order the part and move on. Contribute to the solution! It’s easy: Visit the Database Enhancement Gateway (www.DEGweb. org) and submit an inquiry. It’s a quick process, particularly after you’ve done it a few times. The DEG will reach out to the estimating system provider, which in turn will research whether information was indeed missing or inaccurate, and if so, correct it. That may well help you in the future, as well as help all the other shops working on that make and model of vehicle. If we all work together on this, we can help make the estimating databases more complete. Some may argue you shouldn’t have to do that,
given what shops spend on the estimating system. But at the end of the day, complaining does not solve the problem. By taking the time to submit inquires to the DEG, you help control your own destiny. As Mike Jones of Discover Leadership says, “You can be the wind or the flag. The wind dictates which way the flag blows. The flag is subject to the wind. Always be the wind.” Best Practice: Maximize efficiency through better parts receiving. Receiving parts might seem the most passive process in your shop: The delivery driver brings in the parts and drops them off. But the best-run shops use some very specific steps related to parts receiving. They are mirror-matching all parts, for example. Take the new part out of the box or packaging, and compare it to the old one to make sure at
that point in the process the parts for the job are accurate. Given the average body technician generates $100 in gross profit per hour, you don’t want that technician stopping work and spending time to come find you to tell you a part is incorrect or missing. In my previous column, I talked about the value in using an electronic parts ordering system. Some of those systems can help with parts receiving processes as well. Some allow the parts vendor, when fulfilling the order, to electronically push the parts invoice back to your management system to automatically post the invoice for you. We did a survey of more than 400 body shop parts managers, and they said they spend at least 40% or 50% of their time just manually rekeying parts invoices. So if your electronic parts system can streamSee More Best Practices, Page 40
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34 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com
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Mark Olson: Get it Right the First Time by Chasidy Rae Sisk
This year’s Collision P.R.E.P. program commenced Aug. 6 with “Documenting for Repair Process and Liability, and Building a Bulletproof File,” presented by Mark Olson of VECO Experts. Hosted by the Washington Metropolitan Auto Body Association (WMABA), Collision P.R.E.P. is the educational portion of AASP/NJ’s Virtual 2020 NORTHEAST Automotive Services Show. “There’s a much bigger picture than what you’re probably already doing in your shop,” Olson began. “You’ve got to get it right the first time. You don’t have a second chance to get the right information. As soon as the car enters your shop, you need to start taking pictures of the vehicle and the condition it’s in—once you tear it down, you won’t be able to do this. Pictures are cheap and easy, so there’s no excuse for not taking tons of pictures, even if you don’t need all of them.” Looking at a Nissan Sentra with
want this to be a law—if you repair that bumper instead of replacing it, you’ve broken the law and are subject to criminal penalties.” After stressing the importance of proper OEM repairs, Olson shared VECO Experts’ 10-step repair process. “If you follow those 10 things on every vehicle every time, you’ll have a predictable outcome in your facility, but most shops are only doing 40% of that right,” Olson said. “You are going to get shot at. Can your shop withstand it? Are your files bulletproof?” At some point, all shops experience an issue with a Mark Olson presents last year’s version of the Bulletproof vehicle, and what is said and File during NORTHEAST 2019 done next can have a huge difficult than in the past and how impact on the outcome. many support legislation for OEM Olson advised shops owners procedures being made into law. pull the file before trying to answer “Collision repair has never been anything from memory and take deeasier,” Olson said. “It has changed tailed notes of the customer’s comand gotten easier, but be careful what plaints, seeking counsel if it’s major. you wish for legislatively. You don’t The issue should be commuscratches on the left rear side of the bumper cover, Olson pointed at the Nissan position statement, which dictates the part must be replaced with OEM parts. Olson asked attendees if they think collision repair is getting more
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nicated to a person of power, who is able to make financial decisions, and then, “If you can easily resolve the issue with a re-repair, do it. Even if you think you’re OK, many shops that try to deny small problems cause the customer to hire experts who will find much larger concerns. When this happens, there is a 99% chance that buying the vehicle will be your best option.” To build a bulletproof file, shops must keep detailed records, including an authorization form, authorization to scan if required and a vehicle check-in report at a minimum. “Forms are very important, but no form is going to fit your shop perfectly, so find a form that is close to meeting your needs and modify it, engaging an attorney if needed,” Olson suggested. “Make sure your forms are fully completed; if you don’t use a part of the form, revise it, because an incomplete form will work against you in court.” All adjusters, inspectors and customers who enter the shop need to sign a release and comply with PPE
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requirements, and shops must keep an accurate running log of all notes, including the date/time and the name of the individual logging the entry. Techs should be discouraged from using their personal devices to enter these notes, since their device could be subpoenaed in a trial. Taking photos of everything is vital to building a bulletproof file, beginning with intake and proceeding through each step of the repair process until the vehicle is ready for delivery. “Use all available resources to document the entire process; take pictures of everything!” Olson said. “The biggest problem you’re going to have when you start documenting everything, as you should, is making sure that you’re documenting everything the way it should be—your file can prove that you’re doing it wrong too, so make sure you’re doing it right. Else, your file becomes the bullet instead of being bulletproof.” Product documentation is also a crucial component to strengthening a file. Anything specified by the OEM should be documented using photo evidence, and a copy of the paint
mixing label should be included in the file. It’s also important to note adhesives and urethanes have expiration dates, so including proof they weren’t expired at the time of use is beneficial. When it comes to quality control forms and systems, Olson urged, “Do not make it too complicated; keep it simple. QC can involve a stage check or a peer review. We recommend doing it by stage or grouping, but there are many possible variations to the process, so you need to customize it to your shop.” Using an effective documentation system allows shop owners and managers to “ensure technicians are in fact following OEM repair procedures through photos and documentation providing proof of compliance, and confirm technicians are pre-scanning and post-scanning every vehicle with the ability to store valuable diagnostics,” Olson said. “You can also audit submissions by repair, line item, or labor category, and approve or reassign based on the results,” he said. “Finally, some programs, such as the Assured Performance Network, allow you to
document and print a data-driven certificate of authenticity for technicians that used OEM repair procedures on 100% of the applicable line items during the repair. We highly encourage shops to use a program that offers this feature. “No matter how you fixed the car, it must be documented that way,” Olson added. “If you use a price-matching program, the final repair order that the customer receives, which you keep in your final file, must say it is OEM. If there are customary charges that you charge customers, and choose not to charge it for whatever reason, simply put in a zero or something indicating you did it and didn’t charge for it. “This goes for all not-included items, such as test drives, seat belt, safety checks, vehicle washing and more. All lines on the estimate reflect the repair done to the car. If it is not listed, it did not happen.” Quoting Rex Dunn, Olson said, “‘The only difference between two repairs is what you choose to do for free---there is only one way to repair a vehicle’—the way the OEM says. “If something goes wrong with the repair and the customer calls in
someone like me, Mike Anderson, Kristen Felder or Larry Montanez, the first thing we’ll ask for is your file, which is all we should need to know everything that took place on that vehicle,” Olson said. “Your file is your best defense in any legal situation, but if it’s incomplete, you’ll likely lose in a legal battle, and that could cost you a lot of money, your business, your assets and your mental health.” Regarding data storage, Olson discouraged shops from using estimating systems as the only source for storing files since access to that data may be lost if management systems are changed. It’s also key to know how long the data is stored. “You need a place to store your data that is yours and yours alone,” he said. After briefly touching on third party agreements and garage keepers’ insurance, Olson summed up the basic file elements to have documented: • All communications, internal and external. • All repairs documented following OEM – photos and documents. See Mark Olson, Page 40
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Hey Toby! with Toby Chess
Toby Chess is an I-CAR program instructor, Training specialist, and former salvage yard operator. Toby is universally known in the collision industry for his work with first responders and advocacy for body shops and consumers. He can be reached at tcspeedster@gmail.com
An Overview of Corrosion Protection Products: Part 2 of 2 applied. Seam sealer tape can be removed and repositioned until it is firmly pressed into place with a roller (See Fig. 15) which sets the adhesive.
This is the continuation of Corrosion Protection: Part 1, printed in the August issue of Autobody News.
will lead to an adhesive failure.
California Autobody Association with David McClune
Fig. 14
DTM sealers (Fig. 14) have the same characteristics as the generally Single part seam sealers (Fig. used seam sealers, but has corrosion 12) are an NVH control material. Its inhibtors added so it can be applied to John Yoswick bare metal. primary purposewith is to keep out moisNo OEMs recognize the use of ture, wind and sound, and it is used on all joined metals. It dries by at- these seam sealers. They all state tracting moisture and will take longer there needs to be a barrier coat beto dry than two-part adhesives, gen- tween the bare metal and the seam sealer, perferably 2K epoxy primer. erally speaking. A friend of mine used a compa Every OEM for which I have corrosion data requires a primer to ny’s DTM seam sealer with no primbe applied prior to the application of er on a new roof panel. The vehicle returned with all of the seam sealer seam sealer. lifting off the panel. He contacted with Richard Steffen the manufacturer of the product and they would not warranty the repair. They said he did not follow OEM procedures, which stated a coat of epoxy primer was needed to be applied prior to the application of the seam sealer. I just want you to be warned before you apply this seam sealer to bare metal.
Fig. 17
Fig. 12
Year in Quotes
Fig. 16
Make sure you clean the primed surface with a good wax and grease remover such as Acrysol (Fig. 16). Using your thumb to put the tape in place and not cleaning the surface
Sound deadener (Fig. 17) is a two-part material used for noise, vibration and harshness. It can be used to fill large gaps, but I teach using it as an adhesive between the outer door skin and intrusion beam. Work time is about an hour and it is a non-expanding material that works well on horizontal as well as
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with John Yoswick Fig. 13
Two-part seam sealers (Fig. 13) are used just like the single component. They have a faster drying time than single-part sealers, but cost more. Control flow sealers are used in areas where a flowable self-leveling type seam sealer is required, as Fig. 15 The next type of seam sealer is it flows up to 2 in., then cures, pre- in the form of tape (Fig. 15). Comventing further with flow. Self-leveling Karyn Hendricks sealers are recommended for roof mon locations of use are the hood seam sealing and on drip rails and hem, door hem, deck lid hem and trunk opening seams. A fast drying, quarter panel arches. There is no dry non-sag, high build sealer is used for time so you can paint immediately. all other areas that need seam sealer. Do not stretch the tape as it is
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vertical applications. You will need a foam base to apply this material. I recommend use on sail panels on quarter panels and around the gas door pocket.
flexible foams and rigid foams.
comes in direct contact with bare aluminum in the presence of moisture and oxygen. A chemical reaction occurs and aluminum will start to corrode, and it will not stop. If a coating, such as primer, is applied over the aluminum after the corrosion process has started, the corrosion process is known as filiform corrosion. (See Fig. 20).
Fig. 20 Fig. 19
Fig. 18
Sound deadening pads (Fig. 18) are used on door skins, floor pans and quarter panels. They stiffen up a panel to help with noise reduction and vibration. Vibration can lead to an opening of a panel and moisture can get in, which could result in the formation of rust. Automotive foams are used for NVH control and, in the case of structural foam and rigidity, in place of using a steel reinforment. There are
These two-part materials are designed to eliminate panel flutter, water leaks, wind and noise, and duplicate OEM sound deadening on sheet metal. They eliminate oil-canning of door skins, hood/deck lids, roof panels, rear quarter assemblies and sail panels. Do not substitute it with commercial single-part foam found at home building supply stores, which is highly flammable and attracts moisture to expand. You will need to remove the foam from areas that will be welded. If the material catches on fire, cyanide gas and carbon monoxide will be released.
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Panel adhesives (Fig. 20) are now considered a corrosion protection item. When the adhesive is applied, it forms a barrier so moisture cannot get in between the joints. Toyota has limited the use of adhesives to only weld bonding, a combination of resistance spot welds and glue, which are listed in its specific model repair manuals. Toyota (CRIB 158) does not approve of panel bonding as a substitution for welding. A final note on corrosion and aluminum: as you are aware by now, aluminum does corrode. The first kind is galvanic corrosion, which occurs when bare steel
Fig. 20a
The other type of corrosion occurs naturally. When bare aluminum is exposed to oxygen and moisture, a barrier coat known as aluminum oxide (Al3O2) forms on the surface. This material will not burn off—it melts at 3725 degrees F, whereas aluminum melts at 1220 degrees F. It causes porosity in the weld site. Adhesive, body repair pins and paint do
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not stick to it, and that is why it is necessary to remove before welding, painting and adhesive application.
surface of the aluminum fender. Besides the iron particle beginning to rust, galvanic corrosion started under the rust particles. What would happen if I primed the fender? A big comeback.
Fig. 21, Sand with 180 grit DA Fig. 23
Fig. 22, Clean with a good wax and grease cleaner. Note the aluminum (black soot) on the towel
Continued from Page 36
Mark Olson • Quality control forms, intake, pre-delivery and authorizations fully signed. • All blanks on forms filled out or N/A on them. • A checklist of all file items to do a final quality check of file before closing file for storage. • All photos taken of all stages. In closing, Olson shared, “There’s a lot here, and it takes a lot to sink in because it requires a culture shift. This is what VECO does—help you set processes—but the reality is that you don’t need me to do it; it just has to be done. Take baby steps by implementing one or two things at a time. It only takes one problem to put you out of business and destroy everything you’ve worked so hard for!” For more information on VECO Experts, visit http://vecoexperts.com/. The 2020 NORTHEAST Trade Show will be held virtually Aug.
The next set of pictures show how to perform a recommended cleaning process in a clean environment. As I stated earlier, I was sanding the body of a vehicle that I took down to bare metal. I used the same DA and the sandpaper from the steel body to sand away the paint and primer on the aluminum fender. When I was finished with the fender, I put it outside, and look what happened after one week. (See Fig. 24). Metal particles were transferred from the dirty DA sandpaper to the 21-23. Using a dedicated link on the event website (aaspnjnortheast. com), registered attendees will enter their email address and be able to visit exhibitors’ virtual “booths” online, where they can view product information and videos and schedule virtual meetings with vendors. The show hours will mirror the original schedule: 5 to 10 p.m. Friday, Aug. 21; 10 a.m. to 5 p.m. Saturday, Aug. 22; and 10 a.m. to 3 p.m. Sunday, Aug. 23. The next Collision P.R.E.P course will be available Aug. 27 and will feature John Shoemaker of BASF as he presents, “Positioning Your Business for Sustainability Among Constant Change.” Additional courses are scheduled for Sept. 30 and Oct. 22. For more information on the educational opportunities available, or to register, visit wmaba.com/collision prep/. www.autobodynews.com
UPDATED DAILY
Fig. 24, Clean with a good wax and grease cleaner. Note the aluminum (black soot) on the towel
At https://scrs.com/wp-content/ uploads/2018/01/2016-scrs-guideto-complete-repair-planning-revised-11-16.pdf , you will find a complete list of non-included items needed for repairing aluminum. Check out I-CAR and its offerings on corrosion protection classes. Kent Automotive, 3M, Fusor and SEM have online classes on their products, and Kent has in-house training as well.
Continued from Page 34
More Best Practices line that, you’ve greatly reduced time spent on a process for which your shop can’t bill. I can’t write about parts without mentioning one of the mistakes I see some dealership management make. At some dealerships, the body shop isn’t given financial credit for parts sales. I think this a bad idea for several reasons. I think it reduces the likelihood that someone within that shop is responsible for following up on parts credits, for example. It also could lead to less than ideal repair-vs.-replace decisions; if those making parts decisions are paid on commission, and the shop gets no credit for a part sale, they may choose to repair a part when replacing would be the better decision for the repair. Do you have questions related to parts? Want more ideas and best practices? Reach out to me, and check out our parts-related videos when you subscribe to our free YouTube channel (https://tinyurl.com/AdviceYouTube).
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National Associations with Stacey Phillips
Stacey Phillips is an award-winning freelance writer and editor for the automotive industry. She has 20 years of experience writing for a variety of publications, and is co-author of “The Secrets of America’s Greatest Body Shops.” She can be reached at sphillips.autobodynews@gmail.com.
SCRS Open Board Meeting Highlights Include Presentations About Pressing Industry Topics The collision repair industry recent- focus,” he said. “We all feel fortuly had the opportunity to attend the nate that SCRS has a role of support Society of Collision Repair Special- for its members and we have taken a ists (SCRS) open board meeting, held lot of great pride in doing that.” virtually in July. During his executive director’s “The open meeting was for report, Schulenburg shared some of anyone wishing to learn more about the COVID-19 resources the organithe current state of the association’s zation provides on the SCRS website activities and pressing industry top- (https://scrs.com/covid19-resources), ics,” said Aaron Schulenburg, ex- which includes information about workplace preparation and health, ecutive director. Open to association members and financial aid and relief. and non-members, the meeting in- He also mentioned the organicluded updates and presenzation’s involvement with tations from SCRS staff and other entities and industries committees outlining curto help drive the industry rent initiatives. The agenda forward. These include noalso featured guest presentable groups such as the tations and comments from American Society of Assoindustry colleagues. ciation Executives, the U.S. John Eck, GM Chamber of Commerce and The following is a sumcollision manager mary of some of the highthe National Federation of lights from the meeting, which includ- Independent Business, as well as newed a presentation about GM’s ADAS ly-formed coalitions like the Ameridocument, information about data ca’s Recovery Fund Coalition. privacy and the SCRS award-winning “We are working to identify ways to help the small businesses we repBlueprint Optimization Tool (BOT). At the start of the meeting, resent and the information we could Schulenburg announced SCRS would bring to the marketplace,” he said. During the open board meeting, be holding a live electronic vote of board members for the first time. John Eck, collision manager at GM, Following the meeting, the winners and Chris Blackmore, GM program were announced. They included the manager, shared information about incumbent, Amber Alley of Barsot- GM’s Advanced Driver Assistance ti’s Body and Fender; Tony Adams Systems (ADAS) support document of Weaver’s Auto Center; and post-collision inspecand John Mosley of Clinton tion. The four-part ADAS docBody Shop. All three will sit ument outlines the answers on SCRS’s board of directors for the next three years. to questions that arose as a “We had five outstandresult of GM’s attendance ing candidates,” said Brett at the VeriFacts Automotive Bailey, SCRS chairman Brett Bailey, SCRS summit in February. The of the board. “The wealth sections include system dechairman of knowledge that each of scription, component locathem has is off the charts. Whoever tion, calibration and slow calibration. wins the election in those three spots “Several in the industry pressed will do a great job.” us to help identify ADAS terminolo Since the start of the pandemic, gy, abbreviations and component loSchulenburg said the situation has cations as well as how to calibrate,” impacted every one of its member said Eck. businesses. As a result, the organiza- This technical document, Doction has strived to offer guidance and ument ID #5577683, is available assistance to members. with GM Service Information (SI) “It certainly has been something and also as a free PDF document on that has taken a significant amount of GM’s website: https://www.genuine
gmparts.com/pdf/techinfo/gm-driver “You want to make sure that the -assistance-systems-aid.pdf. right security wording and legal doc Blackmore then talked about GM’s umentation is in place in all those collision inspection process. agreements to not only protect your collision center, but “We recognized that the requirements process we laid all the vendors you work with, the customer and the data proout for a collision are exvider,” he said. tremely labor-intensive and He advised shops to look vehicle invasive,” he said. “We’ve been working on at what he referred to as sereviewing that process and Chris Blackmore, GM curity detection and response program manager document since January.” capabilities. “You want to work with partners This involves talking to oth- er OEMs and working closely with who are proactively looking to ensure that there is nothing egregious taking GM’s internal engineering team. He outlined GM’s draft concept place, data is always being protected, in regard to post-collision inspection, and providers have a security officer which includes the steps for visual in- in place or are audited by a third-parspections and affirming diagnostics. ty organization to make sure data seIf approved, a final document will curity is the No. 1 priority,” he said. be available to the industry He then offered recommendations on what to look with details and photos. Schulenburg said SCRS for in a security partner: fields numerous concerns from members in regard to ▪ Third-party certification data privacy. ▪ Annual investment in en “Data protection is a hanced security very important issue right Brandon Lauer, vice ▪ Storage solutions that abide now,” he said. “We believe president of business by GDP laws that electronic commerce development and ▪ Team members dedicated client experience for needs to take place, but we to security ClaimsCorp. should be able to count on the ▪ Full transparency of data companies that we are working with usage that it takes place responsibly.” ▪ Deletion practices He then introduced Brandon ▪ Auto Claims Economy industry Lauer, vice president of business de- knowledge velopment and client experience at ▪ Strong data transfer and protection ClaimsCorp., who talked about the processes proactive steps businesses can take ▪ Data usage agreements in regard to data privacy. Lauer offered tips on how shops At the close of the meeting, Schulencan protect their businesses. First, burg shared information about the award-winning SCRS Bluehe stressed the importance of print Optimization Tool always asking for consent and (BOT), powered by NuGen authorization from customIT, an OEC company. ers. Next, he said companies should evaluate their solution “We worked with Nupartners. This includes askGen IT due to their treing where the data is stored, mendous development rewho has access to it and Pete Tagliapietra, sources and shared vision business development in what we could accomhow it is transferred. leader at NuGen IT, Lauer recommend- an OEC Company plish with the BOT,” said ed leveraging data storage Schulenburg. providers for multiple solutions and The BOT was the recipient of a carefully reviewing all agreements 2020 SEMA New Product award and that require data sharing. See Meeting Highlights, Page 50
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Continued from Page 30
98th Soldier Wins what they may be looking for in an employee. It wasn’t just somebody who is the best car builder in the world with skills, but somebody who was a team player, was passionate about it and could fit in there. “The fact that I had more to offer than technical skill was what pushed me to the top,” said Fanelli. “In the finale, KevDogg [shop foreman Kevin Schiele] told me, ‘The reason why we are picking you is that you are very skilled and talented, but your passion for cars and your desire to learn—I can teach anybody to weld, but I cannot teach people work ethic and the drive to want to learn and get better, and that is something I see in you.’” And in that moment, everything changed for Fanelli. He was offered the opportunity to work at Kindig-it Design in Salt Lake City. That meant a lot of change for this New York ROTC instructor/Reserve company commander. Fanelli said he was not only
ready for the change, but in fact, he had been seeking it. Though he truly enjoyed working with the cadets, he knew it was something he would not do forever. And, his time as the commander for Echo Company was drawing to an end. So several months prior, the U.S. Army Reserve soldier had applied to the Federal Bureau of Investigation. As the FBI process was taking months, and nothing seemed to be happening, Fanelli admits to feeling lost prior to the dream job offer. “I felt like I had become directionless,” explained Fanelli. “[Getting the Kindig-it Design job] changes things in the sense that I am doing something full time that I am passionate about, instead of just floating through life the way that I felt I was, sort of directionless and not sure who I was and what I was supposed to be doing. So it gives me a lot of confidence.” Fanelli joked that maybe the delay in the FBI application process worked out just perfect for him in hindsight. “Ironically, the same day that I got the job with Kindig-it, I got a call
from the FBI saying that they were ready for me to move onto the next phase exam. I had been waiting for six months at that point, after passing a few other tests, and almost forgot about it.” Working for the FBI would have been fun and cool, but it didn’t quite hold his passion as much as cars. So the dream opportunity at Kindig-it Design is really a significant moment in his life, said Fanelli. “This is life changing. It really is. It means so much to me…I wasn’t sure I’d ever, one, be good enough to do something like this in the car industry; and two, I wasn’t sure if working in the car industry would spoil my passion,” he said. “You know, sometimes you do something every day, and as much as you love it, it kind of becomes a job. So I didn’t want to take something I love so much and turn it into a daily grind and become just whatever with it,” he said. “I hope it’s not just the honeymoon phase for me, but every single day that I go to work here, I am really enjoying it.” Relocating for his dream job has even come with some addition-
al perks. As a part of the Kindig-it Design crew, Fanelli will be part of the upcoming fall show, Season 7 of “Bitchin’ Rides.” And, while getting settled into a new city and state, the soldier was able to find two roommates who work in the car industry as well. “So I am living my car life almost 24/7,” laughed Fanelli. Stumbling upon this too-goodto-be-true job, and everything aligning just right with it, has put Fanelli in a place he never thought he find, but he couldn’t be happier to be there. “Since I got to the show, I didn’t want to leave and go back to my house in New York. It was just so amazing for me to be here, be involved in this and doing this,” he said. “I never thought I would find a career that I would really care that much about. It’s like the old saying goes, people say, do what you love and you will never work a day in your life. “I always felt like, that’s just an old saying and maybe I will never find that. But I actually feel that way at work for the first time ever.” We thank DVIDS Hub for reprint permission
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ge 50 autobodynews.com / SEPTEMBER 2020 AUTOBODY NEWS 43
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with Victoria Antonelli
In Reverse with Gary Ledoux
Gary Ledoux is an industry veteran with 48 years’ experience in the automotive and OEM collision parts industry. His column appears exclusively in Autobody News. He can be reached at YesterWreck@yahoo.com
The Advent of the Computer Age In January 1980, BYTE Magazine The mini-computer was then announced in an editorial “the era of hooked up to a telephone line, a call off-the-shelf personal computers has made to one of 19 IBM computers arrived.” spread around the country. Two and a with Gary Ledouxhalf minutes later, the estimate printand Apple Tandy (RadioShack) had already been selling computers ed out on a dedicated printer at the for more than a year and the soon- body shop. to-be ubiquitous IBM PC, which The cost of doing all that was would set the standard for some time about $10 per estimate plus the cost to come, would be introduced in Au- of the call—if it had to be long disgust 1981. Individuals’ lives and the tance. Most calls were said to be lobusiness world at large would soon cal. be changed forever. ADP also entered the field in with Stacey Phillips Beginning around 1982, a lot mid-1984 with the introduction of of ink was spent within the collision “Tele-Estimating,” a computerized industry trade magazines addressing estimating system handled over the computerization and how and why phone allowing a shop to use comthe industry should embrace this new puterized estimating without having medium. to buy the computer. One collision industry maga- “Simply call a special toll-free with Attanasio zine noted, “As we moveEd through the number and read off the damage ‘80s, shop owners around the coun- codes from a completed AUDATEX try are discovering a new tool for get- worksheet, and within minutes your ting and keeping a competitive edge: estimate is processed, printed and computers. If you’ve never taken a distributed.” look at these at these smart machines, A spot survey conducted by a you’re in for a pleasant surprise.” The trade magazine and published in Dearticle went on to explain the differ- cember 1982 indicated that of 600 with Bruce Roistacher ence between hardware and the new body shops surveyed across the counemerging world of software. try, 101—17%—had a computer sys Another trade magazine arti- tem. Of those that did not have one, cle looked at three different comput- 20% said they were considering buyer systems designed specifically for ing one, while 80% said they would body shops. One was called Auto Re- not consider buying one. Then as now, pair Management Systems. One was change comes hard to the collision remade by Kennedy Communications pair industry. with Gary Ledoux One respondent noted that he had and sold for $29,900; that’s $79,600 in 2019 dollars. And one was produced purchased a computer system to help by Triad Systems of Sunnyvale, CA. run his shop but the monthly cost of The magazine devoted an entire maintaining the system far exceeded article to the ADP/Audatex estimat- its usefulness. In January 1985, a trade magaing system and how easy and effi- cient it was. Another article asked “Is zine ad for Digitree Systems of BoulYour Shop Ready For A Computer der, CO, offered a complete body System” and provided a 15-question shop management software system check list to help the reader decide. including estimates, job costing, re But the latest in technology came pair orders and full accounting with from a company with called Mitchelmatix. payroll for $1,995. Together with a Stacey Phillips A trade magazine article noted shop computer of the purchaser’s choice, estimators loved their estimating man- a shop could computerize for less ual but now Mitchellmatix was going than $5,000 ($11,946 in 2019 dolto make them easier to use by inserting lars.) a bar code into the book. The bar code By mid-1986, a trade magazine was then read when a computerized article noted, “Like it or not, we are wand was passed over the strip by now living in the computer age. For the estimator. many years, computers have been
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used for various business applications and we find them more and more in each aspect of our daily lives. You probably can’t remember when your monthly department store bill was not prepared by a computer. In fact, if all the computers now in use were suddenly shut down the whole world would be thrown into chaos.” Despite this obvious statement, many shops had still not computerized. The article was followed by an ad for Team Management Network computers featuring a “portable computer,” forerunner to the laptop, which could be brought out to the car to complete an estimate, then reconnected to the main computer system. According to an article published in the fall of 1986, 32% of all body shops would seriously consider installing a computer system within the next year. That means 20,000
shop owners were asking, “What can a computer do for my business?” The article suggests the No. 1 priority for shop owners should be computerized job costing. A January 1987 article about computerized estimating systems noted, “Although the traditional role of computers in business tends to be in bookkeeping and finance, a properly written estimating program can provide the starting point for a whole new level of efficiency and profitability.” A three-page spread in a January 1987 trade magazine offered short descriptions of computerized estimating systems and body shop management computer systems from 16 companies, including S & S Development Systems, Tru-Time Systems, Inc., and Keep It Simple Software and Cad Design Systems. It seemed everyone and their See Computer Age, Page 50
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National News with Ed Attanasio
Ed Attanasio is an automotive journalist based in San Francisco, California. He can be reached at era39@aol.com.
CCC Photo Estimates and AI-Supported Claims Spike in Response to COVID-19 recent spike is likely indicative of a new normal as we’re seeing greater use of digital by carriers that have been in market and new insurers coSisk online with digital solutions.” ming CCC also reports a similar trend in estimates written using CCC® Smart Estimate, the world’s first AIguided estimating solution. Smart Estimate applies AI and estimating logic to photos captured with Quick Estimate. Sisk CCC’s Senior Vice President of Product Management Jason Verlen has extensive experience in the software industry, with specific expertise in product management, big data and analytics. Before joining CCC in May 2015, Verlen spent five years at IBM, where he was VP of big data with Victoria Antonelli analytics. “The use of AI-supported claims has accelerated from steady adoption by industry leaders to a massive increase in use and adoption by the industry at large,” Verlen said. “Our data, and the conversations we are CCC’s Senior Vice President of Product Management Jason Verlen reported usage Ledoux of CCC® having with customers, strongly with the Gary Quick Estimate, the company’s mobile photo suggests that this point in time will estimating solution, has more than doubled mark a digital revolution in claims.” from January to April of this year in response “We’re seeing every industry to COVID-19 embracing new technologies, rethinCCC’s statistics show the rapid ad- king how they work, and focusing option of digital technology is in di- on personalizing experiences for rect response to social distancing and their customers. The insurance inGaryinitiated Ledouxdustry is no different.” work-from-homewith protocols to combat COVID-19. The compa- By creating an easy-to-use sysny’s industry data indicates the insu- tem for customers, insurance adrance industry recently surpassed 3 justers and shops alike, Verlen has million estimates initiated leveraging seen all three parties using more and photo technology, since tracking be- more photo estimates than before. “The adoption rate was already gan in 2018. The company also reports the going up, but then the pandemic turwith Stacey Phillips percentage of claims processed ned it into a complete transformation,” ® through CCC Quick Estimate, its he said. “Shops are more concerned mobile photo estimating solution, now about safety for its customers more than doubled from January to and employees for obvious reasons. April, as carriers are accelerating More and more insurers are asking use and adoption of digital tools in for our mobile photo estimating soresponse to COVID-19. lution and shops realize that they’re “Industry use of photos for met- going to get more work by making it with Ed Attanasio hod of inspection has been growing part of their processes.” and insurers are seeing benefit to both Those who are adopting the syscycle time and customer satisfac- tem now will likely use it for the long tion,” said Susanna Gotsch, direc- term. Verlen said. tor, industry analyst for CCC. “The “It’s providing a vastly better At any point, a piece of technology can go from being discretionary to essential, and in many cases, this is what’s happening now with photo with Chasidy Rae estimating within the collision repair industry. Recently, CCC Information Services, Inc. (CCC) reported photo estimates and AI-supported insurance claims have expanded at a record pace exceeding double-digit growth through May of this year. with Chasidy Rae Many shops that used to think of photo estimates as an option are now making them the norm for a wide range of reasons.
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and safer consumer experience and we’re getting more and more users every month,” he said. “We know from history that people will use technology to adapt for whatever reason, and then don’t change back. The pandemic has made photo estimating systems more relevant than ever before and shops that were reluctant to use them are now embracing this technology.” Another reason CCC’s photo estimating is quickly gaining in popularity is the fact the technology is better and the public is more comfortable using it on a daily basis. “There was a little friction two to three years ago because the first generation of any technology is always going to be inferior to the technology it replaces,” Verlen said. “One of the main issues back then was the quality of digital cameras in cellphones, but you look at them now and they are amazing. The enhanced camera ca-
red applications for repair, total loss and casualty claims management. Using mobile, AI and IoT together with its industry platform, CCC connects the broader auto insurance ecosystem supporting more than $100 billion in transactions each year. In June, CCC announced the availability of CCC® Quick View, a photo-guided vehicle inspection solution. Quick View enables auto underwriters to efficiently and affordably complete vehicle inspections virtually by offering policyholders a mobile app to easily capture vehicle photos. Once photos are received, CCC’s proven AI-enabled photo analytics and Damage Detection Heatmaps® are applied, allowing insurers to assess vehicle condition, including the identification of pre-existing damage. Quick View also makes it easy for insurers to assess the presence of custom equipment. Policyholders can capture and share photos at their convenience typically in five minutes. Early use of Quick View by a large, national insurer shows marked improvements in cost, speed and the identification of pre-existing damage. Specifically, Quick View reduced costs by 75% over CCC’s statistics show the rapid adoption of digital technology manual inspections, led to is in direct response to social distancing and work-from60% of inspections being home protocols initiated to combat COVID-19 completed in less than 24 pabilities lead to greater clarity, and hours and identified pre-existing dawe’ve applied technology to guide mage on more than 15% of assessed users in taking the right pictures, so vehicles. picture accuracy has improved, ad- “Insurers are looking to balance ding a whole new level of credibili- the need to understand risk with the ty, which is so important, especially ability to efficiently and consistently for shops that are using it for the first conduct vehicle inspections,” said time.” Naved Siddique, CCC’s group vice CCC offers the industry’s only president, insurance services group. end-to-end digital auto insurance ex- “Quick View offers policyholders perience, from telematics data used a guided experience to make photo by insurers for policy quotes and pre- capture easy, while AI and heatmaps mium discounts, to incident manage- help insurers with their virtual vement, where telematics can be used hicle assessments. to alert an insurance carrier after a “Quick View has additional incrash event, to photo- and AI-poweSee CCC Photo Estimates, Page 60
46 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com
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autobodynews.com / SEPTEMBER 2020 AUTOBODY NEWS 47
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with Stacey Phillips
Techs of the Future with Stacey Phillips
Stacey Phillips is an award-winning freelance writer and editor for the automotive industry. She has 20 years of experience writing for a variety of publications, and is co-author of “The Secrets of America’s Greatest Body Shops.” She can be reached at sphillips.autobodynews@gmail.com.
The Importance of Creating Lifelong Learners and Implementing Hands-on Efficiency Training Over a year ago, Jeff Smith, a collision repair instructor at the Northeast Arkansas Career and Technical Center, reached out to me about the overwhelming shortage of technicians. As a result of our conversation, I initiated a new column for Autobody News magazine called Solving the Tech Shortage, which has since received an award. At the time, shop owners and managers faced a shared challenge: how and where to find new technicians. My intent was to come up ways for the industry to discuss ideas on how to solve this problem. Since then, our industry has encountered new unexpected challenges due to the pandemic. In light of the recent changes in shops across the country, I felt it was appropriate to rename the column to “Add name of column” and focus on ways body shops can help recruit, develop and retain technicians for the future. I encourage you to reach out to me with any ideas you would like to share with others in this forum. Workforce development and technician recruitment remain a top priority for repair shops across the country. Aaron Schulenburg, executive director of the Society of Collision Repair Specialists (SCRS), said there are some unique initiatives currently taking place in the industry. “The reality is the gap we have is far too wide for any one program to simply wipe away,” said Schulenburg. “The more opportunities there are to pull people into this industry, bring them up to speed with what they need and get them ready to be producing on the shop floor, the more the industry will benefit.” During the SCRS open board meeting in July, the association invited two educators from Ranken Technical College and Matrix Trade Institute to share information about the programs they have established and how they are making a difference. Creating Lifelong Learners at Ranken Technical College
A few years ago, John Helterbrand recognized many of the students graduating from the automotive collision repair program at Ranken Technical College in Missouri couldn’t find a
programs and wanted to learn more “The idea behind the automoabout how they keep students moti- tive program is to make somebody vated. productive on Day One,” said Hel “The OEMs do a very good job terbrand. This may include teaching of what I call ‘culture experience,’” students about tear down methods, he said. detailing or R&I. Industry training A pilot project was then is provided from organizations such initiated at Ranken College I-CAR, SP/2 and ALLDATA. using the best practices A set of tools is also given to from the OEM programs. It each of the students. consists of five semesters of “If we are going to put our learning, which includes a students to work, we need to make semester of aluminum train- sure they have tools,” said Heltering. brand. “We don’t want them digAs part of Ranken’s pro- ging in other people’s toolboxes. gram, students are paired with They need to have something they a mentor. Together, they feel is theirs.” follow an operator game In addition, students learn about John Helterbrand, right, department chair of the automoplan, outlined in a booklet shop culture and develop interviewtive collision repair program at Ranken Technical College, with students Spencer Woodall and Robert Burkett that walks them through the ing skills. The goal is to find a place learning process. The intent for them to work in the industry afjob. Although they had successful- is to keep track of what is accom- ter the first eight weeks of hands-on ly earned their associate’s degree, plished, so neither the mentor nor training. were eager to work and had a good the student becomes overwhelmed. Helterbrand said Ranken Techniwork ethic, the department chair of the program said they weren’t being hired by the collision repair industry. “As an educator, that’s a big problem,” said Helterbrand. As a result, he set out to make some changes. Helterbrand reached out to the school’s advisory board, and then talked to students to learn about their concerns. He soon found From helpful direction to assistance with your next order of retention was one of the main issues. Genuine Volkswagen Collision Parts, our team is well read on “Students felt they didn’t fit into ways to make your job easier. a shop’s culture or were making a difference; they were essentially lost SO. CALIFORNIA WASHINGTON in the business model,” said HelterGalpin Volkswagen University Volkswagen North Hills Seattle brand. “We’re all so busy doing pro888 840-8416 206-634-8200 cesses, we forget we’re people.” Fax: 818-778-2090 Fax: 206-547-1581 www.galpin.com M-F 7am-6pm Worst of all, according to Helparts@uvwaudi.com terbrand, he found employers were www.universityvw.com NO. CALIFORNIA often shortsighted and convincing Dirito Bros. Walnut students they didn’t need an educaCreek Volkswagen tion. Walnut Creek 925-934-8459 “For a student, who has low self Fax: 925-934-0786 esteem, that’s detrimental for their parts@dirito.com success because they always feel like they aren’t completing something,” said Helterbrand. Contact your local Volkswagen dealer or visit Wholesale.VWServiceandParts.com to place Helterbrand also reached out to your Genuine VW Collision Parts order today. several OEMS in the industry with internships programs, including Toy“ Volkswagen” and the Volkswagen logo are registered trademarks of Volkswagen AG. ©2020 Volkswagen of America, Inc. ota, Honda, GM and Ford. He found retention was very high within these
48 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com
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cal College and other accredited technical colleges and high schools must ensure students are receiving high quality education so they are marketable when they graduate. “The industry plays a very big role in this,” said Helterbrand. “We
Two students at Matrix Trade Institute mapping a vehicle with one of the institute’s blueprint/ technical writing stations
have to be able to help students prepare themselves for the industry.” Working together, his hope is they create lifelong learners who aspire to be part of the industry for the long term. More information about the pilot program is expected to be announced in late summer 2020.
Implementing Hands-on Efficiency Training at Matrix Trade Institute Dustin Peugeot, CEO and co-founder of the Matrix Trade Institute, said it’s critical to look at workforce development and technician training through the lens of a student. “If we forget that, whatever kind of education or training we provide won’t resonate with the student,” he said. The Matrix Trade Institute was established two years ago in Beachwood, OH, and is currently expanding to Detroit. “We’re the new kid on the block but fortunately, we have done more things right than wrong and built some nice momentum,” he said. Peugeot said that too often, employers find that entry-level technicians don’t have the proper training or skills needed to be effective and productive on the shop floor. As a result, Matrix assists employers retain and grow the next generation of technicians. Peugeot said the goal is to create an environment where shops ultimately hire fewer employees, by boosting productivity and creating a cohesive culture.
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the effort to make that as appealing as possible, not only for trainees, but also for the people in their lives who need to support and be proud of their decision.” He stressed the importance of investing time and energy into the development of current employees. The first step is talking to employers about the various ways they can encourage their teams to become more involved in their own development and plot a career path, based on training, education and growth. By taking this approach, Peugeot said employees will never have a reason to leave the business, because they are being provided with all of the skills required to do their jobs effectively. The next step is revitalizing employees by investing in their skills and growth, offering specific skills training and increasing production. Ultimately, Peugeot said this allows shops to recruit differently and find employees to focus on specific functions that work well in the business and increase throughput. For shop owners looking to find
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The following dealerships are eager to serve your needs. Call your local Subaru collision parts specialist today! autobodynews.com / SEPTEMBER 2020 AUTOBODY NEWS 49
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Analysis Shows PA Has 2nd-Most Coronavirus Restrictions Among U.S. States by Dave Lemery, The Center Square
For several months, a debate has raged in Pennsylvania between Democratic Gov. Tom Wolf and the Republican majorities in the state Legislature over whether the administration’s coronavirus restrictions are appropriate or too restrictive. Lawmakers passed a number of bills in recent months seeking to overturn some of the measures imposed by Wolf and Secretary of Health Dr. Rachel Levine, only to see Wolf veto most of those bills. With Republicans lacking the support needed to overturn a veto, the restrictions have remained for as long as the administration deemed them necessary. Now, a new analysis by the financial services website WalletHub that ranks the states by their COVID-19 restrictions has placed Pennsylvania firmly near the top. The Keystone State landed at No. 2, second only to California in the number of constraints imposed on the population. WalletHub has been compil-
Continued from Page 44
Computer Age brother was jumping on the computer bandwagon. Many systems were designed to run on an IBM XT or AT computer system or Tandy system. Some did not require the hardware system to have its own hard drive. Making the right choice was very confusing, especially for those people with no background or knowledge of the computer world. And those who did have some knowledge were quick to point out the system purchased today could be obsolete in a year, further scaring shop owners. By January 1988, many shops had accepted the inevitable and computerized their shops, but many were still on the fence. Those that made the leap found, much to their delight, learning the management programs was not that difficult. And once mastered, shops didn’t know how they lived without computerization. Computer systems of the period could have included not only a shop management system but also estimating software. At that time, more
ing state rankings for restrictions since May, and Pennsylvania has tended to be one of the most restrictive states in each iteration. But this week’s update saw the state’s highest placement yet. The rankings were compiled using 19 metrics, including face mask requirements, travel restrictions, the pace of business and school reopenings and more. WalletHub talked to a number of outside experts about best practices for reopening the economy, including Vlad Tarko, a professor at the University of Arizona’s Department of Political Economy and Moral Science. Tarko argued that given human nature, reopening economic activity a bit on the early side was probably inevitable. But that didn’t mean there were no options available to limit any negative effects. “Main things that can be done to mitigate the problem, given premature reopening: substantially more testing, accelerated medical developments, responsible local political and business leadership
than 20 different brands of collision shop-related software were available, including shop management and estimating systems. One computer advocate noted, however, that most shop owners bought a computer for the wrong reason—to write estimates. He noted the real value in a computer was job costing—knowing how much money was made on each individual job. The concept of job costing would take some time to sink in. An early 1988 ad for Digitree computers noted the popular computer was now being shipped with the “Mitchell Connection,” an automatic estimating program containing the entire text of the Mitchell crash estimating guides The ad noted the Digitree program required an IBM or compatible computer with MS DOS 3.1, 640K RAM and a 40MB hard drive, pretty standard stuff for the times. A 40MB hard drive! Imagine! More space than one will ever use! The 40 MB hard drive was obsolete in a fairly short time, causing people to buy compression programs for their software, making the entire system unstable.
on preventing super-spreading events, and deregulating various economic activities in order to allow production chains to adjust faster,” Tarko wrote. “Governments should provide more substantial, and quicker, grants and prizes for COVID-related medical developments. They should also subsidize the drugs and vaccines, once they are developed, and other things, like masks, but abstain from price controls [which would be counter-productive.]” So far, during the pandemic, Pennsylvania has seen more than 120,000 diagnosed coronavirus infections and more than 13,700 deaths linked to COVID-19. Meanwhile, the most recent jobless numbers show a 13% unemployment rate, more than double what the state saw before the economy shut down. We thank The Center Square for reprint permission.
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Despite the burgeoning computer industry, a trade magazine article in the summer of 1988 discussed various uses for a new tool in the body shop—the fax machine, ideal for, among other things, placing parts orders. The article noted, “The fax machine is here to stay, and most successful collision shops will have fax machines in use in the near future.” The fax concept had been around for years but only commercially acceptable and viable since the early 1980s. By the end of the decade, computers equipped with the proper software could create an estimate, job costing, create work orders, order parts, create estimate supplements, analyze data, log technicians on and off a job, create technician progress reports, maintain parts and materials inventory, create work flow, perform accounting procedures and do word processing.
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AAPEX 2020 to Be Virtual Experience AAPEX 2020, scheduled for Nov. 3-5 at the Sands Expo and Caesars Forum Conference Center in Las Vegas, will not be held as an in-person tradeshow event this year due to the current state of the COVID-19 pandemic and related governmental prohibitions and restrictions on gatherings, businesses and travel. Instead, AAPEX will provide a virtual/digital experience with many of the show’s same elements presented digitally. The virtual event will be held the week of Nov. 3, the same week as the originally planned event. Additional details will be available Aug. 19 For more information, visit www.aapexshow.com or e-mail info@aapexshow.com. On social media, follow AAPEX at #AAPEX20. Source: AAPEX
Continued from Page 42
Meeting Highlights 2020 SEMA Global Media award. Schulenburg said the windows-based application is an automated version of the Guide to Complete Repair Planning, providing collision repair facilities with an intelligent, easy-to-use estimate analysis tool. “It immediately identifies labor operations, line items and customizable charges that could be overlooked on an estimate,” he explained. “Based on the feedback and insight we’ve received, we’ve identified a very successful utilization of the tool in identifying the opportunities being missed and the financial impact for the end user,” said Pete Tagliapietra, business development leader of NuGen IT. Live demos of the BOT are being held every Wednesday at 2:30 EST. An access code is available on the SCRS website: https://scrs.com/bot/. Visit https://scrs.com/events/ to learn more about the next SCRS open meeting and visit the website for membership information.
50 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com
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VISIT INNOVATIVETOOLS.COM TO VIEW VIDEO DEMONSTRATIONS AND TO FIND A DISTRIBUTOR NEAR YOU autobodynews.com / SEPTEMBER 2020 AUTOBODY NEWS 51
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SEMA Survey: Industry Outlook and Sales Projections Continue to Improve by Kyle Cheng, SEMA
Since the beginning of April, SEMA Market Research has been tracking how businesses within the specialty-equipment industry have navigated through the disruption over the past few months. Overall, our industry continues to return to more normal operations and is increasingly more optimistic about their sales for the rest of 2020. In a recent survey conducted July 24–30, approximately 95% of all companies said they were mostly business as usual or only impacted in the short-term. Nearly half (45%) stated they were business as usual, compared to only 17% back in April. The number of companies reporting more severe disruptions have continued to decrease over the past few months as well. Companies are growing equally optimistic about their sales. Today, nearly half of all companies expect higher or at least the same amount of sales as last year. That is a significant jump from April, when only 20% of companies said
SEMA current outlook
SEMA sales projection
that. Overall, most companies expect to finish the year better, at least the same, or with only a slight decline in sales compared to 2019. Want the latest data and trends in the specialty-equipment industry? Check out the newest reports from SEMA Market Research: 2020 SEMA Market Report: The 2020 SEMA Market Report provides a comprehensive look at how the products your company sells are purchased and installed. Also included is the most upto-date information on parts buyers, key industry trends and forecasts, and insights into the vehicles currently on the road. SEMA State of the Consumer Re-
GM Not Happy with Facebook, Quits Ads on Platform by Jacob Oliva, Motor1.com
This day and age, social media platforms have become one of the biggest, if not the biggest, channels for advertising and reaching target markets. If before, the television was the go-to place for advertisers, the rise of the internet has increased time spent on social media platforms, making it an attractive way to sell products and brands. And this is true globally. On a study conducted this year, there are 1.4 billion active users on Facebook daily, each spending an average of 58 minutes on the platform. More than half of these users range from 18 to 34 years old. We reckon, with quarantine in place in several countries, including the U.S., because of the pandemic, the time spent on the platform could have increased naturally. However, General Motors isn’t too keen on the effectiveness of Facebook as an advertising platform. In a report by Automotive News, The General is unhappy with the way Facebook handles hateful content in connection to the auto-
maker’s brands. With that said, GM reportedly is withdrawing its advertising efforts on the social media platform. The withdrawal includes other social media and messaging platforms under Facebook, including Instagram and WhatsApp, among others. In a statement, GM said the company isn’t satisfied with the progress that Facebook has made. This prompted the company to pause its media investment with the platform. “We are encouraging them to move faster to implement meaningful change so that we can quickly return to a safer digital space that mirrors our brand values,” the American automaker added. GM isn’t the first automaker to withdraw advertising on Facebook. The U.S. division of Ford and Honda have also stopped doing so, along with other commercial brands like Ben & Jerry’s. Ford, however, will resume its spending on YouTube and Pinterest.
port—July 2020: In this report, the SEMA Market Research team explores the current state of consumers within the U.S. and their outlook for the future. This quick
snapshot looks at how consumers are emerging from coronavirus lockdown, including recent driving patterns, retail behavior and how they are interacting with the specialty-equipment industry. All of these reports, and much more, are available for free download at www.sema.org/research. We thank SEMA for reprint permission.
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KEARNY MESA HYUNDAI San Diego 4797 Convoy St.
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We thank Motor1.com for reprint permission.
52 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com
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autobodynews.com / SEPTEMBER 2020 AUTOBODY NEWS 53
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Fiat Chrysler Blasts GM’s Attempt to Revive Racketeering Lawsuit, Calls It ‘Despicable’ by Eric D. Lawrence, Detroit Free Press
Fiat Chrysler Automobiles pushed back Aug. 10 against General Motors’ attempt to revive its racketeering lawsuit, two days after FCA’s former lead labor negotiator, convicted in the UAW corruption scandal, compared GM’s tactics to those of disgraced Sen. Joe McCarthy’s anti-communist witch hunts. The legal drama pitting the two automakers against one another is now in its ninth month despite U.S. District Court Judge Paul Borman’s dismissal of the case in July. Perhaps instructive was a new order Aug. 10 from Borman noting that he is not seeking another reply from GM. GM had ratcheted up the allegations last week, saying it had found new evidence of offshore accounts in the Cayman Islands, Switzerland, Luxembourg and other countries designed to fuel a bribery scheme to harm GM and claiming that ex-GM board member Joe Ashton, who is awaiting sentencing in the federal probe, was actually a paid mole. GM’s original lawsuit, filed in November, claimed FCA corrupted the bargaining process, costing GM billions of dollars, in an effort to hurt GM and force a merger, which never happened, of the two companies. Alphons Iacobelli, the former labor negotiator who later went to work for GM and made the McCarthy comparison, and other FCA officials caught up in the corruption probe are defendants, too, but GM also referenced others, including Ashton, who was a former UAW vice president, and two ex-UAW presidents. FCA, not surprisingly, said essentially that GM should not get another bite at the apple. And in keeping with the intrigue offered in GM’s effort to have its case reinstated, FCA offered its own bit of color and said GM has simply gone too far. “GM’s proposed amended complaint reads like a script from a third-rate spy movie, full of preposterous allegations that FCA paid not one, but two, ‘mole(s)’ to infiltrate GM’ and ‘funnel inside information to (FCA)’ using money ‘stashed’ in a ‘broad network’ of ‘secret overseas (bank) accounts.’ ... None of that is
true. That GM has extended its attacks to individual FCA officers and employees, making wild allegations against them without a shred of factual support, is despicable,” FCA said in its response Aug. 10.
The company followed up with a statement that “GM’s proposed amended complaint is the latest example of the lengths it is prepared to go to, attacking a competitor that is winning in the marketplace with yet more baseless accusations. As we have said from the date this lawsuit was filed, it is meritless and we will continue to vigorously defend ourselves.” FCA also highlighted the stakes for both companies at a time when the automotive industry is under tremendous strain and FCA is working toward a merger that would make it part of an entity larger than GM. “GM’s attempts to tarnish FCA’s reputation and that of individual FCA officers and employees will not distract us from our mission of providing customers with outstanding and exciting cars, trucks and SUVs or from completing our landmark combination with [PSA Group,]” FCA said in a statement provided by FCA spokesman Jeff Bennett. GM said it stands behind its pleading. “FCA’s corruption of the collective bargaining process remains undeniable—a federal investigation is ongoing and there have already been multiple guilty pleas. New facts uncovered through GM’s investigation which FCA tries to discount—including offshore accounts in multiple countries—implicate numerous individuals and make GM’s RICO case even stronger,” according to a GM statement provided by spokesman David Caldwell. “GM seeks to uncover in court
the full extent of harm the FCA bribery scheme caused GM. Nothing in the defendants’ replies counters the significance of these allegations and the direct harm the defendants’ corruption caused GM, and the court should amend its prior judgment and reinstate our case.” The UAW, which is not a defendant, not only said it had no knowledge of the offshore accounts, it forwarded an angry letter from Ron Gettelfinger, a former union president, who said GM was forcing him to break his silence. Gettelfinger, who has not been implicated in wrongdoing as part of the wide-ranging federal probe, was nevertheless named once in the recent GM filing, as in “payoffs through these foreign accounts to Ron Gettelfinger.” But Gettelfinger denied GM’s claims, calling them a “malicious and utterly baseless attack.” “I have never had control over any financial account in any foreign country, nor has any member of my family. Further, neither I, nor any member of my family, have ever re-
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ceived one cent from a foreign account like GM claimed,” Gettelfinger said. In addition to Gettelfinger, exUAW President Dennis Williams, who has been implicated as an unnamed union official in court papers but not charged, was referenced by GM. In addition to the fight between the automakers, the case has been noteworthy because of the way Judge Borman had attempted to have it resolved. At one point, he ordered the CEOs of GM and FCA, Mary Barra and Mike Manley, respectively, to meet, but that did not happen. Borman had indicated that the case would be a waste of resources if it were to proceed, and the country, buffeted by the COVID-19 pandemic and the eruptions of anger over systemic racism following the death of George Floyd at the hands of Minneapolis police, needed to heal. We thank the Detroit Free Press for reprint permission. Finish It Like a Masterpiece th Genuine Part with Parts.
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54 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com
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Tesla Invites Insurance Actuaries to Help It Create a ‘Revolutionary’ Insurance Company by Andrew G. Simpson, Insurance Journal
Tesla, which has been testing an insurance product for its drivers in California, is preparing to build an insurer, one CEO Elon Musk says will be “revolutionary.” And he’s inviting actuaries to join his cause. “I would love to have some high energy actuaries, especially. I have great respect for the actuarial profession. You guys are great at math. Please join Tesla, especially if you want to change things and you’re annoyed by how slow the industry is. This is the place to be. We want revolutionary actuaries,” Musk said on a call with analysts on July 22. According to Zachary Kirkhorn, Tesla’s CFO, the company wants to harness the data from its telematics on its cars and drivers to build the new insurance operation beyond California. “Where we want to get to with Tesla Insurance is to be able to use the data that’s captured in the car, in the driving profile of the person in the car, to be able to assess correlations and probabilities of crash and be able then to assess a premium on a monthly basis for that customer,” he said.
He said Tesla is nearly finished with testing its California telematics product and hopes to be filing that in several more states by the end of the year with the goal of going nationwide. Musk said accuracy of information is “at the heart of being competitive” with insurance. The choice is between assessing drivers “looking in the rear-view mirror” or assessing them individually, “looking ahead with smart projections” and being able to point to what actions they can take to reduce their insurance. “It’s like… if you want to pay more for insurance, you can. But if you want to pay less, then please don’t drive so crazy,” Musk said, adding, “Then people can make a choice.” He said understanding the insurance expense, such as $15,000 to fix a fender, can actually be helpful to the carmaker, allowing it to adjust the design of its cars to how repairs are done and lessen the cost.Musk has long maintained that car insurance rates should fall as driver-assist and self-driving technology become standard. We thank Insurance Journal for reprint permission.
MSO Symposium Going Virtual
Subaru Reports July Sales
The Automotive Service Association (ASA) is pleased to announce the ninth annual MSO Symposium will still take place the week of Nov. 9. “We’re just going to do it virtually and at no cost for attendees,” said Ray Fisher, president and executive director for ASA. Fisher said ASA has been preparing for a virtual event since late May in case changes had to be made due to the COVID-19 pandemic. The virtual program will be open to the entire industry and allow attendees who may not normally attend to learn about the MSO market. MSO Symposium Week will begin Monday, Nov. 9, and conclude Friday, Nov. 13. The event will contain the same style sessions as in previous years but will be delivered in single-session installments five days in a row. Each daily session will be 60 to 90 minutes. There will be updates over the next few weeks and months. Source: ASA
Subaru of America, Inc. reported 51,458 vehicle sales for July, a 20% decrease compared with record July 2019. These results reflect the impact of the COVID-19 global pandemic and the uncertainty surrounding economic recovery. Following 11 consecutive years of sales records, Subaru reported year-to-date sales of 318,572, a 21% decrease compared to the same period in 2019. July marked the third consecutive month of 50,000plus vehicle sales for the automaker. As the top performing car line by volume, Forester sales increased 4% in July compared with the same month a year ago. WRX/STI posted a 6% increase, while BRZ posted a nearly 60% increase compared to July 2019. Source: Subaru
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Kia.com NO. CALIFORNIA Concord Kia Concord (888) 811-3058 (925) 685-2952 Fax M-F 8am - 5:30pm Sat 9am - 1pm
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56 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com
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Reservation Numbers Reveal Rivian R1T Has 30,000 Buyers Waiting by Gustavo Henrique Ruffo, Inside EVs
This article starts with a big “thank you” to readers of Inside EVs. We asked them to tell us their reservation numbers for the Rivian R1T and R1S after a video from Detached Garage showed us how to obtain it. We thought we’d have a hard task getting the real amount of preorders, but that was spared, thanks to Skyler Williams and John King. The answer is not 43. It is approximately 30,000, even if the reservation numbers are now around 56,000. How? Williams was the one who discovered the method for getting the reservation order number. He posted it on a thread at RivianForums. com on July 28, and also on Facebook. King made some engaging projections based on the numbers they obtained from other forum members. The explanation for the real numbers is something Williams observed from the numbers he managed to get: some jumps in the numbers that were not natural. “The reservations jump from 20,000 to almost 40,000 between Dec. 22 and Dec. 26, 2019. No way it could have been legitimate,” Williams said. “There was another 5,000 jump in May in a matter of just a few Continued from Page 49
Lifelong Learners the next generation of the workforce, Peugeot encourages them to set up their businesses in such a way that they are considered the best landing spot for a recruit, regardless of their education. “We have to look within before we can start complaining about Millennials or work ethic or people wanting to get into the trade,” he said. Currently, Matrix offers 20-week
days. There’s a chance these jumps were due to order ‘edits,’ but I am not certain of the exact cause. “The interesting thing, and the reason I know the jumps are artificial, is that the numbers of the jumps correspond to the number of orders taken before them, i.e. 19,000 orders before December 2019, and 5,000 orders from December 2019 to May 2020. Definitely no coincidence.” The first people to reserve their Rivian cars were apprehensive because they would not be the very first to receive their EVs, but that may have to do with the Shopify reservation system. “Rivian used Shopify for the preorders,” Williams said. “It is standard for Shopify to start order numbers at 1,000.” Williams has a formula for people who want to know where they are on the waiting list: if your preorder number is below 21,000, subtract 1,000; if it is above 21,000 and below 45,000, subtract 20,000. If it is above 50,000, subtract 25,000. The 21,000 milestone was achieved before Dec. 26, 2019. Numbers around 45,000 showed up by late May, and we are now at about 56,000. That explains the 30,000 preorders Williams believes Rivian has. King helped ease anxiety
among reservation holders. He made timetables showing when the current reservations will get their cars based on the projected production of Rivian. If it starts delivering the pickup truck by July 2021 and producing 20,000 per year, as promised, it will let everyone who orders an R1T receive their cars by August 2022, according to King’s calculations. That happens because he works with a more precise number of preorders: 24,832. Williams is more careful and says his figures are based on big assumptions. In another scenario, in which Rivian increases production by 1,000 units every six months, King predicts that all cars ordered so far will have been delivered by April 2022. King made another graph that shows the progress of the reservations related to the investments Rivian received. There is no separate number for the R1S. Of the 17 messages we have received with Rivian reservation numbers, five were for the electric SUV, and the numbers were similar to those the R1T preorders present, which tell us Rivian is not separating them. The most recent reservation for the R1S was above 55,000, just like the R1T preorders.
It would be nice to check the proportion of R1S clients compared to R1T customers, but only Rivian would be able to clarify all this in the most precise way possible. The question is if the company is willing to do that, especially when you compare the 30,000 reservations for the Rivian R1T/R1S with the more than 600,000 Tesla Cybertruck preorders we last reported. If that is 20 times as much, the reservation fee for the Rivian vehicles is also 10 times higher, which is a factor to consider. The 30,000 people who decided to give Rivian $1,000 may be more confident of their decision than all the people who placed $100 for the Cybertruck. On the other hand, Rivian reservation holders can have their $1,000 back at any time. Cybertruck prospective clients either buy the electric pickup truck or say goodbye to their $100. We have contacted Rivian to get the exact number of reservations. We also want to check if it can disclose how many are for the R1T and how many for the R1S. We’ll keep you posted if the company is willing to talk.
programs in collision repair and refinish, automotive maintenance and service advisor training, all of which focus on a hands-on efficiency-based curriculum. Students typically intern
Similar to the program at Ranken College, participants receive a tool set and are shown how to organize it. Rather than relying on outdated
viduals to perform, feel valued and grow within their internships. The majority of the time, Peugeot said the internships turn into full-time employment. Peugeot said it’s critical to help the industry become a better place to onboard employees and develop employees who work hard, show up on time and want to work. “We can’t blame the students of this generation,” he said. “We have to look within and find out how we can become better employers, recruiters and growers of talent.”
“We’re the new kid on the block but fortunately, we have done more things right than wrong and built some nice momentum,” — Dustin Peugeot after the first two or three weeks. Peugeot said students are seen as productive members of the business the first day of an internship.
textbooks, the programs focus on modern technology, such as interactive, game-style learning simulation. They have found this enables indi-
We thank Inside EVs for reprint permission.
USAA Returning Additional $270M USAA, the country’s fifth largest property-casualty insurer, is returning an additional $270 million dividend to auto insurance policyholders. This follows earlier announce-
ments that USAA would provide dividends totaling $800 million to its members as a 20% credit on three months’ worth of premiums. This new, additional dividend will reflect 10% of up to two
months’ worth of premiums, and will be provided to all auto insurance policyholders with policies in effect within the months of June and July. In total, USAA has now com-
mitted to returning $1.07 billion in dividends to all auto insurance policyholders due to continued fewer drivers on the road. Source: USAA
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CCC Photo Estimates herent value as vehicle photos can be integrated with CCC’s claims solutions, making them readily avai-
When CCC’s patented Damage Detection Heatmaps® are applied, shops and insurer can easily assess a vehicle’s condition, including pre-existing damage
lable for review by insurers should a physical damage claim arise in the future,” Siddique said. “We’re excited to apply our mobile, AI and heatmap capabilities to the inspection process, supporting the broader needs of our insurance customers.” CCC Quick View empowers drivers to carry out photo collection digitally and at their convenience. Insu-
rance carriers can use digital photos to be more productive and effective in determining the condition of a new policyholder’s vehicle. CCC Quick View offers features such as guided photo capture, which enables consumers to receive a Quick View invite, prompting and guiding them through photo collection and submission and geo-coding that verifies where photos were taken, helping identify garage location. It also enables users to take photos that can be integrated with CCC’s claims solutions, making them easily available for comparison if a physical damage claim is initiated under the applicable policy in the future, allowing carriers to potentially mitigate prior damage claims.
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Nikola Scores Landmark Order For 2,500 Battery-Electric Garbage Trucks by Mark Kane, Inside EVs
Up to 1,200 cans/charge
Nikola Corporation announced a “landmark” order for 2,500 battery-electric refuse trucks for Republic Services, one of the largest waste collection companies in the U.S. The deal is for a minimum of 2,500 vehicles with an option for up to 5,000 total, which is really two orders of magnitude beyond anything we saw in the U.S. so far. According to the press release, it’s the largest single order in the waste industry. The Nikola Refuse (that’s the name apparently) trucks will be based on the battery-electric Nikola Tre truck for Europe (entire package including batteries, controls, inverters and e-axle). The brief specs show that it will be able to take up to 1,200 cans per charge.
Nikola boss Trevor Milton said sharing the Tre platform will allow Niokola to “drive the cost down for both programs by using the same parts.” With 1,000 HP, the Nikola Refuse is expected to outperform the conventional diesel and natural gas counterparts, as it will be able to go up hills with full loads “without issue.” The plan is to “likely” start onroad tests in early 2022 and full production shortly after with deliveries in 2023. Nikola is to produce both the chassis and body—previously Republic Services was usually forced to buy those things separately. For comparison, the production of Nikola Tre trucks will start in 2021.
Nikola Refuse specs: Up to 150 miles (240 km) of range Up to 720 kWh battery Up to 1,000 HP of power
Hurricane Isaias Insured Losses Estimated to Top $4.2B in U.S. and Caribbean by Danielle Ling, PropertyCasualty360
Early insured loss estimates for Hurricane Isaias are in days after the storm rocked the East Coast, knocking out power for millions and creating significant property damage from the Carolinas to New York. Isaias became the second hurricane of the season to make landfall in the U.S., touching down Aug. 3 in Ocean Isle Beach, NC, after hitting the Caribbean. Isais previously made landfall in the Dominican Republic as a tropical storm before hitting the Bahamas as a hurricane. On Aug. 10, Karen Clark & Company (KCC) issued an early insured loss estimate for Hurricane Isaias, evaluating losses in both the U.S. and the Caribbean. Based on its hurricane reference models, KCC estimates the insured loss from Hurricane Isaias will be around $4 billion in the U.S. and $200 million in the Caribbean. This estimate includes the privately insured wind and storm surge damage to residential, com-
mercial and industrial properties and automobiles, KCC says and does not include NFIP losses. Isaias created havoc all along the Atlantic coast last week. Strong winds knocked out power for over 3 million residents, leaving millions in New York and New Jersey in the dark for almost a week.
The Category 1 storm made landfall in North Carolina on Aug. 3 with maximum sustained winds of 85 mph, bringing torrential rains, storm surge, damaging winds and tornadoes. The Mid-Atlantic and Northeast recorded wind gusts of 60 to 70 mph as the core of Isaias passed through the region. Downed trees and pow-
er lines caused structural damage to properties, crushed automobiles and disrupted transportation services throughout the affected area for several days. The Caribbean, Puerto Rico, the Dominican Republic and the Bahamas were subjected to powerful winds from Isaias, tearing down trees and power lines. In Puerto Rico, around 350,000 customers lost power and many communication towers were rendered inoperable. Areas of the Bahamas impacted by Isaias were among the regions devastated by Hurricane Dorian last year. Worsening Isaias’s impact in these areas, not all repairs needed after Dorian had been completed by the start of this hurricane season. In the wake of Isaias, roof damage and structural damage from downed trees were observed in commercial and residential buildings, according to KCC’s loss report. We thank PropertyCasualty360 for reprint permission.
We thank Inside EVs for reprint permission.
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60 SEPTEMBER 2020 AUTOBODY NEWS / autobodynews.com
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Asbury Announces Record Q2 Results Asbury Automotive Group, Inc., one of the largest automotive retail and service companies in the U.S., reported net income for the second quarter 2020 of $49.6 million and adjusted net income (a non-GAAP measure) of $48.7 million. This compares to net income of $54.9 million and adjusted net income of $45.9 million in the prior year quarter. “We delivered a very strong quarter and proved out the resilience and the flexibility of our business model,” said David Hult, Asbury’s president and CEO. “Our focus on gross profit combined with our cost restructuring efforts allowed us to remain pro-active and committed to long term growth by moving forward with acquiring 12 Park Place luxury franchises in the Dallas-Fort Worth market under more favorable terms than the prior agreement,” Hult continued. “With the addition of Park Place, Asbury will be a stronger, more diversified company.” Source: Asbury Automotive Group
CES 2021 Is All-Digital
SEMA Show Canceled
The Consumer Technology Association (CTA)® is excited to share that CES® 2021 will be an all-digital experience. With the growing global health concerns about the spread of COVID-19, it is not possible to safely convene tens of thousands of people in Las Vegas in early January 2021 to meet and do business in person. An all-digital CES 2021 will allow the entire tech community to safely share ideas and introduce the products that will shape our future. You’ll be able to participate in all the awe-inspiring moments of CES wherever you are in the world. We are designing a unique experience for the tech industry. Mark your calendars for the first week in January and be on the lookout for more exciting news about CES 2021. We plan to return to Las Vegas for CES 2022, combining the best elements of a physical and digital show.
SEMA, the Specialty Equipment Market Association, announced Aug. 5 that due to COVID-19 and concerns event facilities and services will be unavailable, the SEMA Show will not be taking place in 2020.
Source: CTA
While both event organizers and industry members have been working tirelessly to deliver an outstanding SEMA Show in November, mounting uncertainty has rendered continuing with the event inadvisable. SEMA expects the decision will bring much needed clarity to an uncertain picture and will help exhibitors, attendees and partners plan accordingly. Recent SEMA Show survey results indicated interest in a possible virtual tradecshow with related
live elements. SEMA will be working with industry members to determine interest levels on specific alternatives. “The SEMA Show is committed to furthering businesses in the automotive specialty equipment market, and to providing manufacturers and buyers with the best opportunity to connect, promote new products and discover new trends,” said Chris Kersting, SEMA president and CEO. “We appreciate the spirit, hard work and innovation our industry puts into the SEMA Show each year. While we are disappointed circumstances prevent us from hosting the Show in November, we look forward to getting everyone together in 2021 for another outstanding event.” Full refunds for SEMA Show exhibitor booth deposits and attendee registration fees will be issued. Updates will be posted to www. SEMAShow.com. Source: SEMA
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ARA Takes Summer Road Trip Virtual, Annual Convention to Follow Suit by Chasidy Rae Sisk
The Automotive Recyclers Association (ARA) planned its inaugural ARA Summer Road Trip for July 2325, with the intention of connecting up-and-coming industry leaders with experienced auto recycling veterans through tours of several ARA member facilities. The Road Trip was to be an evolution of the association’s Future Leaders of Automotive Recyclers Educational Summit (FLARES), established in 2018. The tour was scheduled to begin in Chicago, but unfortunately, in the days leading up to it, Chicago Mayor Lori Lightfoot issued an emergency order requiring two weeks of self-quarantine for travelers from 15 different states due to COVID-19 concerns. Although ARA was forced to postpone the Road Trip out of precaution for members’ health and safety, ARA Director of Member Relations Vince Edivan, who had planned to act as host of the trip, was able to safely travel to Chicago, since his home state of Virginia was not on
the restricted list. Edivan took the tour virtual, posting pictures and videos to the organization’s social media accounts to allow would-be attendees to join him for the road trip experience. Edivan began his road trip on July 23 by visiting CAR Auto Recyclers in North Manchester, IN, and Legal Chop Shop in Fort Wayne, IN. Over the following days, he visited Auto Parts City in Gurnee, IL, and Rockford’s Auto Parts in Rockford, IL, as well as Bionic Auto Parts & Sales in Chicago and Northlake Auto Recyclers in Hammond, IN. Edican also dined with the owners of ABC Auto Parts in Riverdale, IL, owned by Jim Watson, ARA past president, and his brother, Joe Watson, current president of the Auto & Truck Recyclers of Illinois (ATRI.) “All locations are either CARand/or Gold Seal-certified automotive recycling facilities, having achieved the top tier of certification for general business practices, environmental and safety issues, and customer service offered by ARA and recognized by the industry,” Edivan shared. “It was a rewarding experience for all,
as the ARA members who graciously agreed to open their doors to their peers were able to still reach the ARA membership at large through videos and postings on ARA’s social media platforms.” Sandy Blalock, executive director of ARA, added, “While the challenges presented by the COVID-19 pandemic made the widely-attended Road Trip unrealistic, ARA was able to adapt and leverage the reach of social media and technology to bring ARA members together and share knowledge. “Overall, it was a great opportunity for ARA to get back out and visit face-to-face with some of our great Illinois and Indiana members, and ARA looks forward to rescheduling the Road Trip as soon as safely possible,” Blalock said. ARA has also made the difficult decision to shift its 77th Annual Convention & Exposition, scheduled for Nov. 11-14, to a completely virtual event. “Ultimately, the health and safety of the membership and staff is our top priority,” Blalock said. “After many discussions, serious consideration,
and with the safety of all attendees at the forefront, we have decided to re-direct all our efforts into transitioning the 77th Annual ARA Convention and Exposition into a virtual conference. We were hopeful that this year’s convention could remain a live event, but the current state of affairs simply presents too much uncertainty and risk at this time.” “For 76 years, the ARA Annual Convention and Exposition has been the gathering place for the professional automotive recycling industry and an incredible place to network, learn and conduct business,” said ARA President Scott Robertson. “ARA is the voice of the professional automotive recycling industry and it is our duty to provide information, education and opportunity to automotive recyclers from around the world—even in the midst of a global pandemic. “Yes, it will look different, but it will still be the extraordinary experience that our attendees have come to expect year after year.” For more information on ARA and the upcoming 77th Annual Convention & Exposition, visit a-r-a.org.
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Webinar Highlights the Importance of OEM Certification by Emmariah Holcomb, glassBYTEs.com
“You’re making the investment today for the return down the line,” said Connor Smith, CARSTAR original equipment manufacturer (OEM) manager, as he began describing the value in auto glass businesses gaining OEM certifications in an industry webinar. The webinar, The Importance of OEM Certification, was hosted Aug. 11 by the Collision Industry Electronic Commerce Association (CIECA) and took a closer look at the long-term benefits available to the industry. Smith shared his insight on why now is the time for businesses to start looking into becoming OEM certified, which certifications are the most beneficial to shops, what the return on investment (ROI) looks like once gaining certifications and what the future of certifications look like. Automotive technology plays a large role in why Smith thinks “now is the time to look into OEM certifications.” During the webinar, Smith
mentioned some of the related challenges associated with newer-model vehicles. “Everyone knows your standard Corolla is more high tech now than it was 10 years ago,” said Smith. “All of the advancements and safety-marketed features makes repairs more challenging, especially when you factor in the
future. He stressed the importance of always having a good relationship with your local dealers. “The first thing you should do is research various certification requirements and other needs,” said Smith. “Be aware that some certifications will require dealer sponsorships—this is why building a relationship with them is key.”
“There’s one consistent thing, the OEs are here and they aren’t going away,” — Connor Smith training. The best way to get OEM certifications of any type is through training.” When it comes to which certification shop owners should consider, Smith had a simple but direct answer: “Business owners should choose the one that they have the most equipment for and that doesn’t need a huge investment to start.” He advised industry business owners to look at their local dealerships and inquire if they need or have a body shop. This, according to Smith, can lead to a possible partnership or sponsorship in the
There were a number of attendees concerned about the ROI associated with gaining specific OEM certifications. Smith responded to their concerns by stating, “This is a long-term game and you should think of this like a 401(k) for your business; it’s wrong to want shortterm gains from these certifications.” Although the cost associated with certifications is high up front, according to Smith, there are several areas for future growth. By choosing this type of investment for your business you could gain
Honda is Asking Office Staff to Work on Assembly Line by Kurt Verlin, The News Wheel
Are you currently waiting on the delivery of a Honda you ordered? When it arrives, it may have been assembled by one of Honda’s accountants. According to a report from local radio station WOSU, white-collar employees at Honda’s plant in Marysville, OH, have been asked to fill in for a rapidly dwindling blue-collar workforce.
Honda is still scrambling to regain normal inventory levels after its factories were shut down between March and May, and it can’t backfill assembly line positions fast enough to recover. “Regardless of whether or not you wanted to, you could be subject to it,” said a Honda employee
who wished to remain anonymous. “They took volunteers first, but my understanding was they didn’t receive many volunteers for this activity, so then they made it mandatory.” WOSU was able to procure an email in which a Marysville general manager outlines why Honda employees working in the research and development, purchasing and accounting departments were requested to work on the factory floor. Chief among the reasons were COVID-19 and the $600 benefit that unemployed workers are receiving until the end of July. Though Honda is taking precautions—daily temperature scans for employees, mandatory masks and the ability to test for COVID-19 on-site—it confirmed it has recently seen an increase in cases across North America. Honda’s anonymous worker believes that whenever an assembly line worker gets sick, they’ve been in contact with 40 other workers. People in the regular assembly line workforce are also absent for other COVID-19-related reasons,
such as finally taking the time to receive elective surgeries they had initially postponed because of the
pandemic, and dealing with the medical, familial and other impacts brought on by the coronavirus. According to Jamie Karl of the Ohio Manufacturers Association, Honda’s Marysville plant already needed workers before the pandemic, which has only made the situation worse. Honda says it is targeting “sometime in August to return to proper staffing levels,” but with the COVID-19 situation only getting worse in the U.S., it is difficult to imagine how the automaker will pull that off. We thank The News Wheel for reprint permission.
additional technicians, marketing support from the OEs, which include an influx of brochures as well as digital content, and more. “The potential for additional techs could also get your business additional cars within the year as well, you just have to keep reminding yourself that it’s a big investment upfront, but a minimal maintenance investment,” Smith said. Going Forward According to Smith, the future of OEM certifications are uncertain, but they are a big factor in the “right now.” “There’s one consistent thing, the OEs are here and they aren’t going away,” said Smith. He also stated these types of certifications are becoming a standard which may lead to issues with future repairs if your shop or technicians aren’t certified. “I honestly think it’s worth the investment to keep your business,” Smith concluded. We thank glassBYTEs.com for reprint permission.
NICB: Thousands Left to Rebuild After Isaias As Hurricane Isaias leaves a path of destruction in its wake, the National Insurance Crime Bureau (NICB) warns everyone as floodwaters recede, many flood-damaged vehicles are left. This provides an opportunity for fraudsters to dupe innocent car buyers. Dishonest dealers can buy flooded vehicles, clean them up and sell them to unsuspecting buyers. Many of these vehicles come on the market after natural disasters. NICB recommends buying from a reputable car dealer; to check the car thoroughly looking for water stains, mildew, sand and silt under the carpets, headliner and behind the dashboard; and to look under the hood for signs of oxidation. Pull back the rubber “boots” around electrical and mechanical connections for these indicators. Ferrous (containing iron) materials will show signs of rust; copper will show a green patina; aluminum and alloys will have a white powder and pitting. Source: NICB
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