Autobody News November 2011 Western Edition by Autobody News

Western Edition California Nevada Arizona

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VOL. 29 ISSUE 11 NOVEMBER 2011

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Caliber Collision Moves Headquarters to Texas, Acquires ‘911 Collision’ in Arizona and Nevada Big changes are in store this month for one of the country’s biggest multiple shop operators (MSOs): Caliber Collision Centers. Caliber Collision Steve Grimshaw will be relocating the company’s corporate headquarters from Irvine, California to Lewisville, Texas—a suburb in the northern area of the Dallas-Fort Worth Metroplex. “Our relocation to Texas allows us to consolidate management spread across a number of locations in Cali-

fornia and Texas,” said Steve Grimshaw, President and CEO of Caliber Collision Centers. Caliber plans to move into their leased 16,397 square foot space at 401 E. Corporate Drive in Lewisville, Texas in mid-November. Caliber will move because of Dallas-Fort Worth’s affordable metropolitan area, central location, business-friendly environment and large, diversified workSee Caliber, Page 49

See also ‘Profile of the Evolving Collision Repair Markeplace’ on MSOs, by Romans Group, p. 46

Health Care Panel at:

NACE/CARS 2011 Moderator, ASA’s Bob Redding

Terri Seefeldt, Rogers Benefit Group

See preview at: autobodynews.com Don Seyfer, Seyfer Automotive

Jim Houser, Hawthorne Auto Clinic

An auto service-oriented Health Care Panel at NACE/CARS revealed surprising misconceptions, passionate disagreement, divided opinions and competing priorities for Health Care and how it should be paid for and managed in America. A three-part series on Health Care and its likely impact on shop owners begins next month.

Brock Bulbuck, The Boyd Group

Steve Grimshaw, Caliber Collision

Cathy Bonner, Service King

Rollie Benjamin, ABRA Auto Body and Glass

CEOs of Four of the Largest MSOs in the Industry hold first-time MSO Symposium at NACE/CARS See MSO Insights, Page 44

The opening general session at NACE/CARS, introduced by Mitch Schneider, CARS Chair, and Ron Nagy, NACE Chair, (r). Autobody News has extensive coverage of the show at: www.autobodynews.com/ events/nace-2001.html Stay up-to-date at this year’s SEMA show with Autobody News. Visit http://www.autobodynews.com/ events/sema-2011.html for more SEMA show coverage. The 2011 SEMA show will occupy the Las Vegas Convention Center from October 31 to November 4 and attendance numbers continue to climb as the show draws closer. The show boasts over 2,000 exhibiting companies already registered for booths, more than 500 of which are exhibiting for the first time. The ever-popular Paint, Body and Equipment section will also return this year, showcasing companies who offer products, services and equipment suited for the collision repair professional. See page 62 for I-CAR and SCRS RDE Schedule.

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Contents

COLUMNS Amaradio - There is No Such Thing as a ‘Bad Decision’ in Business . . . . . . . . . . . . . . . . 41 Attanasio, Pro-Spray - Busy Shop Clearly Sees Benefits Working with Pro-Spray Solvent & Waterborne. . . . . . . . . . . . . . . . 27 Attanasio - How to Use Five Different Forms of Social Media to Gain Customers . . . . . . 28 Chess - SEMA’s Repair Driven Education and Government Regulations . . . . . . . . . . . . . 66 Franklin - Choosing a More Profitable Market . 14 Insurance Insider - Can the Collision Industry Support Two Major Trade Shows? . . . . . . 33 Weaver - Dealing with Angry Customers and Growing ‘Alligator Skin’. . . . . . . . . . . . . . . 39 Williams - A Relatively Young Audi Dealership Makes Quality Pay Off . . . . . . . . . . . . . . . 68 Yoswick - SCRS Affiliate Groups Help Members Address Legislative and Regulatory Issues . 20 NATIONAL 2011-2012 Chevrolet Corvettes Recalled for Rear Hatch Hinges . . . . . . . . . . . . . . . . . . 38 A Profile of the Evolving Collision Repair Marketplace . . . . . . . . . . . . . . . . . . . . . . . 46

Publisher & Editor: Jeremy Hayhurst General Manager: Barbara Davies Assistant Editor: Erica Schroeder Contributing Writers: Tom Franklin, David Brown, John Yoswick, Lee Amaradio, Rich Evans, Janet Chaney, Toby Chess, Mike Causey, Tom McGee, Ed Attanasio, Chasidy Sisk Advertising Sales: Joe Momber, Sean Hartman (800) 699-8251 Sales Assistant: Kristy Navarro Art Director: Rodolfo Garcia

AkzoNobel . . . . . . . . . . . . . . . . . . . .11 Audi Wholesale Parts Dealers . . . . .68 Autoland Scientech . . . . . . . . . . . . .39 Automotive ID . . . . . . . . . . . . . . . . . .44 BASF . . . . . . . . . . . . . . . . . . . . . . . .17 BMW of Vista . . . . . . . . . . . . . . . . . .42 BMW Wholesale Parts Dealers . . . .53 Buerge Chrysler-Jeep-Dodge . . . . .23 Carlsen Volvo . . . . . . . . . . . . . . . . . .34 Cebotech/Tecna . . . . . . . . . . . . . . . . .4 Chief Automotive . . . . . . . . . . . . . . . .9 Classifieds . . . . . . . . . . . . . . . . . . . .70 Completes Plus . . . . . . . . . . . . . . . .44 Crash-Writer . . . . . . . . . . . . . . . . . . .20 Crevier BMW . . . . . . . . . . . . . . . . . .24 Crystal Glass . . . . . . . . . . . . . . . . . .41 Diamond Hills Auto Group . . . . . . . .52 Diamond Standard . . . . . . . . . . . . . . .8 Downtown Motors of LA (Audi, VW, Porsche) . . . . . . . . . . .49 Drew Hyundai-Volkswagen . . . . . . .48 DuPont . . . . . . . . . . . . . . . . . . . . . . . .5 Elk Grove Toyota . . . . . . . . . . . . . . .62 Enterprise Rent-A-Car . . . . . . . . . . .67 Equalizer Industries . . . . . . . . . . . . .50 Ford Wholesale Parts Dealers AZ, CA, & NV . . . . . . . . . . . . . . . .25 Galpin Motors . . . . . . . . . . . . . .32, 40 Garmat USA . . . . . . . . . . . . . . . . . . .28 Gema . . . . . . . . . . . . . . . . . . . . . . . .26 Glenn E. Thomas Chrysler-Jeep-Dodge .15 GM Wholesale Parts Dealers . . . . . .61 Goliath Carts . . . . . . . . . . . . . . . . . . .6 H & S Auto Shot . . . . . . . . . . . . . . . .28 Honda-Acura Wholesale Parts Dealers . . . . . . . . . . . . . . . . . .36-37 Hyundai Wholesale Parts Dealers . .59 Infratech . . . . . . . . . . . . . . . . . . . . . .14 Kia Motors Wholesale Parts Dealers .57

Serving California, Nevada and Arizona, Autobody News is a monthly publication for the autobody industry. Permission to reproduce in any form the material published in Autobody News must be obtained in writing from the publisher. ©2011 Adamantine Media LLC. Autobody News P.O. Box 1516, Carlsbad, CA 92018 (800) 699-8251 (760) 721-0253 Fax www.autobodynews.com Email: news@autobodynews.com

Western

AAIA ‘Shop of Tomorrow’ Vehicle Service at AAPEX . . . . . . . . . . . . . . . . . . . . . . . . . 51 AAPEX Learning Forum to Provide 30 A/M Programs . . . . . . . . . . . . . . . . . . . . . . . . . 51 ALLDATA Expands Integration with Electronic Parts Catalogs . . . . . . . . . . . . . . . . . . . . . 64 ALLDATA Training Center to Exhibit at AAPEX. 40 Allstate and Progressive Agree to Settle Patent Litigation . . . . . . . . . . . . . . . . . . . . 59 AM Tow Package Wiring Harnesses for Hyundai/Kia Recalled . . . . . . . . . . . . . . . . 38 At NACE, State Farm Announces Change to Shop Locator to Allow Ranking Based on Internal Performance Score, Will Use ‘PartsTrader’ for DRPs . . . . . . . . . . . . . . . 63 California Man Guilty of Selling Counterfeit ALLDATA Products . . . . . . . . . . . . . . . . . . 64 CARSTAR 2011 Holds National Teleconference At Annual Seattle National Conference . . . 18 Chrysler to Invest $165 Million in Body Shop at MI Plant . . . . . . . . . . . . . . . . . . . . . . . . 65 Despite Poor Economy, Auto Sales Remain Strong . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Dollar Thrifty Halts Sale Process, Hertz Still Interested in Acquisition . . . . . . . . . . . . . . 24 DuPont Custom Finishes to Exhibit at SEMA ‘11 . 10 DuPont Exhibit at SEMA Show Live Paint Demonstrations . . . . . . . . . . . . . . . . . . . . 60 EPA Federal Office Response to SCRS Letter on 6H Rule . . . . . . . . . . . . . . . . . . . . . . . . 65 Fiat 500 Top IIHS Safety Pick . . . . . . . . . . . . 65 Florida and Michigan AAA Clubs Join Forces, Now 2nd Largest . . . . . . . . . . . . . . . . . . . 59 Girl Scouts Gear Up at NACE for Collision Hub’s Tools for Success. . . . . . . . . . . . . . 26 GM Introduces Industry-First Front Center Airbag . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Houston Auto Body Assn Says Tell TX DOI Your Labor Rates . . . . . . . . . . . . . . . . . . . 61 I-CAR Repairability Summit: Don’t Section Ultra-High-Strength Steel . . . . . . . . . . . . . 69 IRS Offers Employers Tax Relief if Workers Reclassified . . . . . . . . . . . . . . . . . . . . . . . 60 Kristen Felder Nominated for Car Care Council “Aftermarket Woman of the Year” Award. . 10 LKQ Founder Donald E. Flynn Passes Away . 65 MBUSA CEO Lieb Ousted . . . . . . . . . . . . . . . 65 Mitchell Partners with Enterprise Rent-A-Car, Integrates with Update Promise.com to Deliver Services via RepairCenter™ . . . . . 59 Mitchell RepairCenter™ Standardizes Special Materials Repair Data within TechAdvisor, Single Source Access to Multiple OEMs . . 64 MSOs Share Insights During First-time Symposium at 2011 NACE . . . . . . . . . . . . 44 NABC Nominees for 2012 Board of Directors Announced. . . . . . . . . . . . . . . . . . . . . . . . 60 Nationwide Insurance Buys Harleysville Group. 61 Polk Execs Speak about Aftermarket at AAPEX . 40 Polk Execs Speak about the Aftermarket at AAPEX . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 State Farm Offers to Settle Three of Gunder’s Customers’ Lawsuits . . . . . . . . . . . . . . . . 32 U.S. Deer-Vehicle Collisions Fall 7 Percent . . 51 Virginia Branded Title for Water Damage Settles at $2500. . . . . . . . . . . . . . . . . . . . 60 Women's Industry Network Awards Two Scholarships to NACE . . . . . . . . . . . . . . . 42 World’s Oldest Running Car Fetches High Price at PA Auction. . . . . . . . . . . . . . . . . . 70

Indexof Advertisers

REGIONAL ABRA Auto Body & Glass Expands Glass Operations with Location in Phoenix, Arizona. 6 Arizona Dust Storm May Have Caused 7 Car Wreck . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Arizona’s Lax Driver-Test Rules Lure Foreigners . 6 CA Airbag Law Signed Into Law by Governor . 4 CA Dealers Now Required to Sticker Salvaged Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 CA Insurance Commissioner Dave Jones Seeks Legislation to Oversee Insurance Annuities . 8 CAA San Diego to Host its Annual Holiday Event in Nov. . . . . . . . . . . . . . . . . . . . . . . 24 Caliber Collision Centers Adds North Hollywood Shop. . . . . . . . . . . . . . . . . . . . . 6 Caliber Collision Moves Headquarters to Texas, Acquires ‘911 Collision’ in Arizona and Nevada . . . . . . . . . . . . . . . . . . . . . . . . 1 California Law Protects Claims From Disabled Insureds. . . . . . . . . . . . . . . . . . . 23 Collision Repair Standards on their Way, Industry Veteran Alerts . . . . . . . . . . . . . . . 12 Cook’s Collision Centers Adds Two New Locations . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Dennis Grau of Exide Technologies Appointed to CA/NV/AZ Automotive Wholesalers Association (CAWA) Manufacturers’ Advisory Council . . . . . . . . . . . . . . . . . . . 23 Driving and Texting Ban Takes Effect in Nevada. 6 Foremost Insurance Upgrades Auto Program in Arizona. . . . . . . . . . . . . . . . . . . . . . . . . . 8 Golden State Collision Centers Gives Back to Community with Harvest Festival . . . . . . . . 8 Roseville, CA, Company in talks to buy Carmichael Honda in Citrus, CA . . . . . . . . . 9 San Diego Chapter of the California Autobody Association (CAA) Hosts Frank Terlep of Summit Software Solutions for Digital Marketing Meeting . . . . . . . . . . . . . . . . . . . 4 Santa Clara CAA Hosts 18th Annual Golf Tournament . . . . . . . . . . . . . . . . . . . . . . . 16 Sierra Vista, AZ Gets Red Light Cameras. . . . 14 Southern Polyurethanes Inc. Retains House of Klear for Southern California Distribution. . 18

LKQ . . . . . . . . . . . . . . . . . . . . . . . . .71 Malco . . . . . . . . . . . . . . . . . . . . . . . .19 Matrix . . . . . . . . . . . . . . . . . . . . . . . .22 Mattei . . . . . . . . . . . . . . . . . . . . . . . .52 Mazda Wholesale Parts Dealers . . .63 MINI Wholesale Parts Dealers . . . . .66 MOPAR Wholesale Parts Dealers . .43 Moss Bros. Chrysler-Jeep-Dodge . . .7 Motor Guard . . . . . . . . . . . . . . . . . . .12 Nick Alexander BMW . . . . . . . . . . . .13 Nick Alexander MINI . . . . . . . . . . . .72 Nissan/Infiniti Wholesale Parts Dealers .56 Paint EX . . . . . . . . . . . . . . . . . . . . . .18 PPG . . . . . . . . . . . . . . . . . . . . . . . . . .2 Pro-Spray . . . . . . . . . . . . . . . . . . . . .21 RBL Products . . . . . . . . . . . . . . . . . .50 RealParts.com . . . . . . . . . . . . . . . . .35 Replica Plastics . . . . . . . . . . . . . . . .65 Riverside Metro VW-Honda-HyundaiNissan-Mazda . . . . . . . . . . . . . . .58 Safety Regulation Strategies . . . . . .63 SATA Spray Equipment . . . . . . . . . .16 Shingle Springs Nissan-Subaru . . .54 Shop-Pro Equipment . . . . . . . . . . . .29 Sierra Chevrolet-Honda-Mazda-Subaru .46 Southern Polyurethanes, Inc. . . . . .45 SprayZone.net . . . . . . . . . . . . . . . . .30 Star-A-Liner . . . . . . . . . . . . . . . . . . .33 Steck Manufacturing . . . . . . . . . . . .10 Subaru Wholesale Parts Dealers . . .51 Timmons VW-Subaru . . . . . . . . . . . .47 Toyota Wholesale Parts Dealers . . .69 VeriFacts . . . . . . . . . . . . . . . . . . . . . .42 VIM Tools . . . . . . . . . . . . . . . . . . . . .64 Volkswagen Wholesale Parts Dealers .60 Volvo Crash Wholesale Dealers . . .62 Weatherford BMW . . . . . . . . . . . . . .31 Zurada Law Group . . . . . . . . . . . . . .34

www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 3

San Diego Chapter of the California Autobody Association (CAA) Hosts Frank Terlep of Summit Software Solutions for Digital Marketing Meeting The San Diego chapter of the California Autobody Association (CAA) held their monthly members meeting on September 27 at 7p.m. at Tom Ham’s Lighthouse in San Diego. The meeting’s guest speaker was Frank Terlep of Summit Software and Mobile Solutions. Frank’s focus was digital marketing and how shops can better use digital marketing to capture more cars, customers and revenue. Digital marketing produces exact, measurable results and allows customers to reach a more targeted audience than traditional marketing efforts. The cost is also dramatically lower than that of traditional marketFrank Terlep ing. Frank’s presentation focused on how to use email, web, mobile and text services and social media to accomplish marketing for shops. “82% of consumers will purchase a product or service from a company when marketed to consistently for 24 months,” said Terlep. The first order of business for shops to start taking advantage of the large amount of ‘digital consumers’— people who regularly use digital markets—is to increase their web presence. Terlep talked about a few ways to go about doing this including using social media sites, review and location sites, and creating a company newsletter; however the number one way should be to have a complete and

engaging company website. “Treat your website like your online lobby,” said Terlep. Terlep also encouraged shops to start actively collecting email addresses and mobile numbers from customers in order to better reach them throughout the job process. According to Terlep emails are a great way to folllow up on unsold estimates as well. Terlep also touched on using mobile phones to communicate with the increasing amount of people who regularly use them. Terlep’s is not talking about calling these mobile numbers— he’s talking about texting. Terlep said shops can text a customer about their vehicle status, emergency communications, promotions and short surveys. Mobile texts also have a 7 to 10 percent response rate, which is a large return on investment when you consider the amount of effort required to send a text, according to Terlep. Reaching out to mobile phone customers also means thinking about having an app created for your business. Read more about Terlep’s app success with Nigro’s Auto Body in Philadelphia, PA, by searching Nigro’s on www.autobodynews.com. “Shops need to start thinking like a retailer,” said Terlep. Terlep was adamant about shops making their customer experience closer to that of a retail store, which is the experience most customers are more familiar with. Terlep also talked about using social media to market shops. He suggested that shops only use Facebook

CA Airbag Law Signed Into Law by Governor

California Gov. Edmund Brown has signed into law CA S.B. 869, legislation that amends current law regulating automotive repairers. The new law amends the Automotive Repair Act. It provides that an automotive repair dealer who prepares a written estimate for repairs that includes the replacement of a deployed airbag and then fails to restore the airbag, as specified, is guilty of a misdemeanor punishable by a $5,000 fine, one-year imprisonment in a county jail, or both the fine and imprisonment. Because this legislation would establish a new crime, the bill would create a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act.

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and other social media sites to educate, post activities, create contests and post specials and reviews about their businesses—not to sell to their followers. According to Terlep 82 percent of customers select a shop based on reviews, so checking and managing your shop’s Yelp page is critical. Terlep talked about using surveys to create your own reviews on your personal website. He said that most shop surveys are entirely too long and wordy for customers. Terlep said the only two questions that really must be on a survey are “What did you think about us?” and “Would you refer us to friends or family?”—”That’s all you need,” said Terlep. Lastly Terlep touched on using ecoupon sites and posting your own specials and deals on your website and social media to draw in more repeat business. He used an example of texting “Half price detailing until noon tomorrow” to your database of mobile numbers when having a slow after-

noon at your shop. He said with that 7 to 10 percent return on investment from texts you should have some business come in on that slow afternoon. Using coupon sites like Groupon and Living Social are also a great way to get customers in for maintenance type work and get them to know you and your shop, according to Terlep— this way they are more likely to choose your business when they have a collision. Effectively using the database your shop already has from existing customers is a great way to increase sales. “It is much easier to get repeat business than it is to get new business,” said Terlep. Terlep recommended that shops spend 80 percent of their marketing efforts and budgets on digital marketing. “You need to fish where the fish are,” said Terlep. For more information please visit www.summitsoftwaresolutions.com.

NACE Booth #N531 SEMA Booth #11041

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Arizona’s Lax Driver-Test Rules Lure Foreigners

Arizona has become a magnet for foreigners who find it easier to get a driver’s license than in the states where they live, according to Claims Journal. It’s a development that’s raising public-safety and national-security concerns. Arizona has more permissive rules than any other state governing who can get a license, how they can get it and how long the license is valid before it expires. Hundreds of people come to Arizona from stricter states seeking driving credentials. The Arizona Republic reports that immigrant-rights advocates say Arizona provides an essential service for people who are in the country legally, often as refugees. They know how to drive a car but are unable to get a license in their home states because they can’t pass a written test in English and translators aren’t allowed.

Arizona Dust Storm May Have Caused 7 Car Wreck

A dust storm is moving through Arizona and may have caused a seven-car wreck on Interstate 10 that injured 13 people, according to Claims Journal. Hector Vasquez, a meteorologist with the National Weather Service, says the dust storm isn’t all that dense and hasn’t caused the agency to issue a dust storm warning because visibility was at between 1 and 5 miles. Other dust storms this summer have reduced visibility to less than a quarter mile. The storm began near Tucson and was heading toward Phoenix. Vasquez says Interstate 10 near Picacho Peak got a “direct hit” from the storm and may have caused an accident that backed up traffic for miles. The Arizona Daily Star reports that the seven-vehicle wreck included two tractor-trailer rigs, and that dust prevented helicopters from transporting patients for a while. Five people were taken by ambulance to local hospitals.

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Caliber Collision Centers Adds North Hollywood Shop

Caliber Collision Centers, a multishop operator of 84 collision repair facilities, announced October 3 its continued expansion in the Los Angeles area with the grand opening of a newly renovated 12,000-squarefoot state-of-the-art collision repair facility located in North Hollywood, Calif. The MSO operates shops in Texas and California. “We continue to expand our capacity in the Los Angeles area to meet the growing needs of our customers and insurance clients across the largest automobile market in the U.S.,” said Caliber Collision Center CEO Steve Grimshaw. “The opening of this newest Los Angeles location further supports Caliber’s continued expansion plans while offering our auto insurance clients best-in-class operational consistency, customer focus and cost management.” Added Caliber Collision Center COO Mark Sanders, “The addition of this new North Hollywood location further expands our penetration in California as we continue to grow into being the collision repair provider of choice in every community we serve.” For more information visit www.calibercollision.com.

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Cook’s Collision Centers Adds Two New Locations

Cook’s Collision Centers, a Northern California-based collision repair operation, on Monday announced the addition of two new locations in Napa and Fairfield, CA. The Napa location, formerly Hanlee’s Volkswagen-Subaru Body Shop, will serve the California communities of Napa, Yountville, St. Helena and Calistoga. The Fairfield location, formerly Les Scarlett’s Body Shop, will serve the California communities that border the corridor joining the San Francisco East Bay with Sacramento, according to Cook’s Collision Centers. Cook’s Collision Centers now operates 18 locations.

Driving and Texting Ban Takes Effect in Nevada

The new NV law banning talking on a hand-held cell phone or operating an electronic device while driving took effect Oct. 1. When the state Legislature passed the bill earlier this year, Nevada joined eight other states to prohibit all drivers from using a hand-held cell phone. Nevada also is among 34 states to ban text messaging for all drivers. Starting Jan. 1, violators will be slapped with fines—$50 for a first offense, $100 for a second and $250 for a third violation within a seven-year period.

6 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com

ABRA Auto Body & Glass Expands Glass Operations with Location in Phoenix, Arizona

ABRA Auto Body & Glass, a Minnesota-based damaged vehicle repair company and industry leader, announced on October 3 the opening of a new glass division repair center in the Phoenix suburb of Peoria, Arizona. The facility is located at 16784 North 88th Drive and increases the total number of ABRA repair centers to 109 in 12 states. Jim Richardson, ABRA’s Vice President of ABRAAuto Glass stated, “We’re excited to move into the Phoenix market. ABRA is expanding to meet the growing needs of vehicle owners and our insurance partners in the community. ABRA is committed to make it convenient for customers to find an ABRA Auto Body & Glass repair facility no matter where they happen to live or work.” The glass repair facility is equipped with all the latest technology to maintain high standards and assure top quality repairs. Staff technicians have extensive experience and receive ongoing stateof-the-art industry training. “We plan to add several new ABRA collision centers in the

Phoenix-Scottsdale area in the near future,” said Tim Adelmann, ABRA’s Executive Vice President of Business Development. “Through acquisition or by converting existing vacant properties into collision repair centers we’re confident our collision and glass service will impress both the vehicle owner and our business partners.” The company is continually working to become greener and environmentally friendly and participates in neighborhood activities and local events which continually enhance the community. ABRA’s mission is to be the premier auto body and glass company in America by repairing damaged vehicles right the first time, on time while providing an exceptional customer experience. For more information please visit www.abraauto.com.

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Foremost Insurance Upgrades Auto Program in Arizona

Foremost Insurance Group has upgraded their enhanced auto program which became available in Arizona in June, according to Insurance Journal. The Foremost program features new discounts, increased coverage options and improved online processing features. The Foremost Auto program also now features the following upgrades: ● A continuous insurance discount based on length of time an insured was with their most recent insurer. This discount is automatically verified through a third party report and requires no follow-up. ● Accident forgiveness for accidents with Foremost where the total payout is less than $500. ● The option to “go paperless” when the customer agrees to receive the policy and billing documents via a valid email address. ● Online enhancements including an improved web rater, new vehicle and ownership questions to help get more accurate quotes and rates, enhanced help text on IAProducers.com, and VIN pre-fill at the beginning of the quoting process.

Golden State Collision Centers Gives Back to Community with Harvest Festival

Golden State Collision Centers will hold their annual Harvest Festival on November 15 from 5:30 P.M. – 7:30 P.M. at the MSO’s Orangevale, CA location. This mixer will serve to benefit the Twin Lakes and Orangevale Food Banks, as well as providing local businesses an opportunity to network together. The collision center is the beneficiary of the Orangevale Chamber’s $500 ‘Chamber Gives Back’ grant, which will be presented to the food banks, along with all canned and non-perishable food items collected from October 1 through November 15th. The MSO will be collecting food donations from October 6 through November 15. Simply drop off your food items at Golden State Collision Center’s Orangevale location located at 9439 Greenback Lane, Orangevale, CA. If you are unable to drop off donations, please contact Rebecca Endres at (916) 580-5637 or rendres@goldenstatecollision.com and she can drop by your business to collect your donations.

8 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com

CA Insurance Commissioner Dave Jones Seeks Legislation to Oversee Insurance Annuities

The California insurance commissioner is urging Gov. Jerry Brown to sign into law legislation that seeks to increase oversight of insurance annuities. Approved handily by the Assembly and Senate chambers last week, the two-bill package headed for Brown’s desk is aimed at protecting consumers from potential abuse in the marketplace, said Insurance Commissioner Dave Jones. He noted that in 2010, Californians spent $20.7 billion on annuities. Assembly Bill 689 would require insurers to set standards and procedures to ensure annuities purchased, exchanged or replaced by a consumer are indeed suitable for them. The proposal seeks to expand on requirements set forth in the 2010 National Association of Insurance Commissioners’ (NAIC) Annuity Suitability Model Regulation, a bill analysis noted. Jones said seniors are sometimes targeted by unscrupulous insurers and their agents selling annuities not suited for the consumer.

“After several years of failed attempts to pass similar legislation, I’m pleased that we prevailed in getting this annuity suitability legislation passed to protect hard-working consumers and vulnerable seniors from abuse and exploitation of harmful financial investment transactions involving annuities,” Jones said. Assembly Budget Committee Chair Bob Blumenfield (D-San Fernando) introduced the bill, which would add Article 9 (commencing with Section 10509.910) to Chapter 5 of Part 2 of Division 2 of the Insurance Code. The second annuities-related measure, A.B. 793, would prohibit unscrupulous insurance agents and brokers from participating with, employing, or making referrals to an individual involved in the sale of reverse mortgages, with the sole purpose of cross-selling inappropriate and unsuitable non-casualty insurance products such as an annuity.

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Roseville, CA, Company in talks to buy Carmichael Honda in Citrus, CA A fast-growing Roseville-based auto sales company is closing in on another big acquisition, according to the Sacramento Bee. The California Superstores Automotive Group is buying Carmichael Honda from longtime owner Norris Rancourt. Rancourt confirmed that talks are under way but says nothing is finalized. Rancourt opened his business in 1962, selling Honda motorcycles. When Honda started making cars a decade later, he became one of the company’s first U.S. dealers. In his youth, Rancourt raced motorcycles. Now 77, he says he’s “obviously looking toward retirement.” Carlos Hidalgo, head of the California Superstores operation, is a longtime local dealer who now has 11 dealerships stretching from Folsom to Los Angeles.

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CA Dealers Now Required to Sticker Salvaged Vehicles California automobile dealers must start labeling salvaged vehicles with a red warning sticker under a new law signed Sept. 26 by Gov. Jerry Brown. The new law also requires dealers to use electronic vehicle registration for all car sales and allows dealers to charge consumers more to recoup added costs. Under most states’ laws, a salvage vehicle is a vehicle that has been wrecked or damaged to such an extent that it is considered too expensive to repair. In almost all cases, salvage title is given to any vehicle that has sustained damage worth 75% or more of its value. Requirements are going to vary by state. In Florida, a car has to be damaged to 80% of its value before the accident. Vehicles in Minnesota are considered salvaged when they are declared “repairable total loss” by an insurance company, were worth at least $5,000 before the damage or are less than six years old. The title, license plates, and a required fee are submitted to the state Department of Motor Vehicles (DMV)

and a Salvage Certificate is issued for the vehicle. Although many salvage vehicles are expertly repaired, some vehicles: are not properly repaired and/or tested and may be dangerous to operate and have been repaired with stolen parts. In California, if the California Highway Patrol or DMV determines the vehicle or its parts have been stolen, the vehicle cannot be registered and the vehicle or parts will be seized. All sellers, including dealerships, are legally required to disclose the vehicle’s salvage title and history, but the law is difficult to enforce, especially when cars come in from another state. Both the California New Car Dealers Association and consumer advocates backed the new law. “No other state can match the built-in protections and convenience awaiting Californians,” Peter Welch, president of the state’s dealers association, said in a statement. “Like every small business, dealers want to focus on customers instead of paperwork.”

About half of California’s dealers already participate voluntarily in the electronic registration system. Under the new law, they will be able to increase the maximum documentation charge from $55 for sales and $45 for leases to $80 for both. Even with that jump, document charges in California will be the second lowest allowed in the nation. Registrations also will be processed much faster. Consumers will wait only a month for their license plates, instead of as long as six months under the current system. Consumers also will benefit from the new warning sticker requirements. California is the first state in the nation to adopt that mandate. All newand used-car dealers must post a red sticker on any used car flagged in a federal database as junked, salvaged or flood-damaged. “Consumer advocates have long sought the protections offered in this bill,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety. “For the first time, auto See Salvage Titles, Page 10

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Kristen Felder Nominated for Car Care Council “Aftermarket Woman of the Year” Award Collision Hub Founder and CEO, Kristen Felder was recently nominated for this year’s Car Care Council Women’s Board “Aftermarket Woman of the Year,” an award that honors women in the aftermarket for their dedication and service to the industry. The winner will be announced at the 14th Annual Car Care Council Women's Board Reception on November 1; 5 p.m. 6:30 p.m. at the Sands Expo Center in Las Vegas, Nevada during the annual Specialty Kristen Felder Equipment Market Association (SEMA) tradeshow. “Our Women’s Board ‘Aftermarket Women of the Year’ awards are a way for us to applaud exceptional women in the aftermarket S for their dedicated service, as well as to recognize women who are going above and beyond to make a difference in the industry,” said AAA’s Ruth Ehlinger,

president of the Car Care Council Women’s Board. “I have always been passionate about education and supporting women in the industry as a Women’s Industry Network board member, an Akzo Nobel Most Influential Woman and the founder of Collision Hub,” said Felder upon receiving the nomination. “Collision Hub was created as a safe space for all parties in the automotive industry to come together and collaborate towards transformation and positive change.” For more information about the Car Care Council Women’s Board, visit women.carcare.org or e-mail womensboard @carcare.org. For more information about Collision Hub, visit www.collisionhub.com or contact Elizabeth Blackman at Elizabeth@collisionhub.com.

DuPont Custom Finishes will participate at the annual Specialty Equipment Market Association (SEMA) tradeshow in Las Vegas, NV. The show will be held at the Las Vegas Convention Center, Nov. 1 - 4. DuPont Custom Finishes, exhibiting in booth #22789 in Hot Rod Alley, Central Hall, will feature DuPont™ Cromax® Pro, ChromaPremier® and Hot Hues™ custom paint products. Industry airbrush and pinstripe artists will be showcasing their skills with live demonstrations in the booth using DuPont™ Cromax® Pro waterborne products. Vehicles on display in the booth will include a 2012 DuPont Calendar winning ’61 Chevy Impala, owned by Tim Brown of Jacksonville, FL; a ’71 Challenger owned by Bob and Karon Zeitler and painted by John Riehn of John's Autobody and Paint. Imperial, MO; and a ‘50 Fleetline built by Tim Strange, owner of Strange Motion Rod & Custom Construction and host of PowerBlock TV series Search & Restore. Strange will make appearances to sign autographs in the booth 10a.m. to 12p.m. on Wednesday, Nov. 2 and 1p.m. to 3p.m. on Thursday, Nov. 3. The SEMA Show takes place at

the Las Vegas Convention Center. In addition, the SEMA Show provides attendees with educational seminars, product demonstrations, special events, networking opportunities and more. The SEMA Show is a trade-only event. For additional details about the show, or to register to attend, visit: www.semashow.com. More information about DuPont Cromax® Pro Waterborne, Hot Hues custom finishes or ChromaPremier® paint products is available by visiting www.pc.dupont.com or by calling 1800-GET-DUPONT. DuPont has been bringing worldclass science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGO’s and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment. For additional information about DuPont and its commitment to inclusive innovation, please visit: http://www.dupont.com.

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Salvage Titles

dealers will be required to provide vital information about a vehicle’s safety, reliability and worth before consumers even start negotiating.” The California Department of Consumer Affairs has found that more than 700,000 structurally damaged and 150,000 salvaged vehicles are returned to streets and highways every year without a safety inspection, and pose a potential hazard to all of the state’s motorists The State of California “brands” its titles. These brands indicate the vehicle’s past history: ● Salvaged: Vehicles marked with a “salvaged” brand were involved in an accident or incurred considerable damage from another source, such as a flood

or vandalism. This brand includes previously dismantled (junked) vehicles. ● Original Taxi or Prior Taxi: Vehicles formerly used “For Hire” which usually have high mileage. ● Original Police or Prior Police: Vehicles formerly used by law enforcement and which usually have high mileage. ● Non-USA: Vehicles manufactured for use and sale outside the United States which have been converted to meet Federal and California safety and emissions standards. ● Warranty Return or Lemon Law Buyback:Vehicles which have been returned to the manufacturer under California’s Lemon Law. ● Remanufactured; Vehicles constructed by a licensed remanufacturer and consisting of used or reconditioned parts. These vehicles may be sold under a distinctive trade name.

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Collision Repair Standards on their Way, Industry Veteran Alerts by Ed Attanasio

It’s a looming specter in the collision repair industry’s immediate future with potentially serious repercussions. We’re talking about Collision Repair Standards, and they will have more influence over the auto repair and claims industry than any single factor in its il-

Featured speaker Dale Delmege (left) and Ron Arth, Manager of George V. Arth & Son in Oakland visit at the September meeting of the East Bay CAA chapter

lustrious history, according to Dale Delmege, an industry spokesperson with more than three decades of collision experience. Delmege spoke on September 20th to the membership of the East Bay Chapter of California Autobody Association at Scott’s Seafood Restaurant in Walnut Creek, Calif. “We are at a critical crossroads and some of the most powerful forces in our industry either don’t know it or are picking the wrong route with collision repair standards,” Delmege said. “One way or another, the standards issue will affect every player in this industry, either adversely or positively.” Devising collision repair standards has been a long ongoing conversation without any results or other action for several reasons, Delmege said. “It’s a complex situation, be-

Jim Boyle, owner of Regal Collision Repair in Vallejo and Peter Locke, collision tech program coordinator at Contra Costa College catch up at the East Bay CAA chapter meeting in September

cause it involves the body shops, the techs, the OEMs, the insurers and the end users. It’s a tug-of-war with economic and psychological factors

thrown in. On any given day, the insurance companies, OEMs and body shops are pulling mightily in different directions, but repair standards would alleviate a lot of this tension.” Delmege cited the standards scenario that took place two years ago in the U.K., where all of the parties involved provided input to establish their repair standards. “The shops, OEMs and insurance companies in the U.K. worked together in a voluntary industry study that led to what’s now called PAS125. The government said they were going do it if the industry wouldn’t do it on their own, so they were motivated to act. Now, it’s an easier industry to make a living in, because they created an unmovable anchor and set some standards. Now the mysteries concerning body repairs are gone and there’s less fighting among the parties involved.” If we don’t do the same in this country, the government will take the reins and no one is likely to be satisfied with that idea, Delmege explained. “If we can’t co-exist in this business environment and do it ourselves, we could encounter a national regulatory frenzy. We’ve seen it done too many times before in other industries.” There is a window of time currently available, but if we don’t act quickly, it’s likely we’ll see a ton of class action suits and the uncertainty will further aggravate the already bumpy relationship between the body shops, OEMs, insurers and policyholders.” ‘Collision repair standards are way overdue’ was the takeaway message Delmege left the CAA Chapter audience with. “Other industries have specific standards they use every day, such as in machining, for example. If you’re a machine shop, each part you make is accompanied with a step-by-step set of specifications, describing the methods in careful detail, so that the machinist knows how long it should take to make it and what it will cost. Collision repair doesn’t have this oversight, and all that does is create confusion.” “Without defined repair collision standards, there are too many questions and not enough answers,” Delmege said. “People buy insurance to feel safe and responsible and when they get in an accident, they logically expect that their vehicles are returned to pre-accident condition. How many cars drive away from a body shop with at least one deviation from an allegedly safe and compliant repair?

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There aren’t definitive answers, because we have no standards.”

At the conclusion of the meeting, Michael Govette, branch manager for Finish Master in Concord (at center) distributed the model trucks for their 14th Annual Toy Truck Competition, to Bill Andrews, auto body and paint technology instructor at College of Alameda (at left) and Dan Welsh, co-owner of Crocketts Premier Auto Body in Pinole (at right). The event will be held on November 15th at the Blackhawk Auto Museum in Danville, Calif.

Reporting as an observer, Delmege has visited more than 400 body shops in North America since 1989. Following a career which included various roles in sales and marketing at Black and Decker, and VP Marketing for IngersollRand Automotive Tools from 1989 to

1994, Delmege served as Senior Vice President Sales, Marketing and R&D, and subsequently Executive Vice President Operations, at Mitchell International, the auto claims repair information provider. Prior to its sale he was also a principal in AutocheX, which measures customer satisfaction following a collision repair. In 1994, Dale Delmege founded the Chelsea Group to assist auto claims businesses. Since then his company has served the collision repair and auto claims industry in a wide range of capacities. Delmege is also a founder, past director and Chairman of the Collision Industry Electronic Commerce Association (CIECA), and a founder and past director of the National Auto Body Council. He is a Lifetime Member of the Society of Collision Repair Specialists, one of two such honors ever conferred on a non-shop owner. Mr. Delmege produced and facilitated the widely acclaimed VeriFacts Invitational Symposiums in 2009, 2010 and 2011, featuring claims industry CEO’s and Auto Claims VP’s of Allstate, Progressive, Esurance, State Farm and USAA.

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On Creative Marketing

Tom Franklin has been a sales and marketing consultant for fifty years. He has written numerous books and provides marketing solutions and services for many businesses. He can be reached at (323) 871-6862 or at tbfranklin@aol.com. See Tom’s columns at www.autobodynews.com under Columnists > Franklin

Choosing a More Profitable Market with Thomas Franklin

These days going to the movie theater can be very expensive. Theater owners have come to realize that former patrons now get their films online from services like Netflix. To compensate for the loss of these customers, they have begun to add luxury amenities like select seating and personalized service in the auditorium. And of course the price of a ticket has skyrocketed, in my area to around $14.00 for a ticket. Sadly, in this economy, lower-income car owners have also migrated to cheaper paint and body providers. Shops like “One Day Paint and Body” are getting much of the business that quality shops used to get to keep their technicians busy and keep paint purchase volume up. It may be time for shop owners to take a hint from theater owners and more thoroughly focus on higher income prospective customers. Many shops already do aim their marketing at higher end European vehicles like BMWs and Mercedes, but the range of vehicle choices has also increased greatly. The Korean automakers have begun to claim a larger share of the market. Like theater owners, a shop owner has to ask, “What special amenities will get all better quality car-buyers to choose my shop over any other?” Many shops have already focused on pampering their customers. They go beyond proving a rental car to taking the rental car to the customer and having a lock box for keys so the customer can drop off the rental car at the shop after hours. A shop may also

choose to cover the difference in cost for a luxury rental vehicle. A luxury lounge with big TV, WIFI, computer games for kids and up-scale refreshments are already commonplace. Many shops offer a car wash and interior clean. For higher end customers, shops may even include exterior and interior detail. But who pays for all of these amenities when insurance companies are working to reduce what they will pay for? Like theater owners who raise the price of tickets, astute shop owners are realizing the need to offer more selfpay options even for insurance pay jobs. Unlike theater owners, they can’t ask for $5.00 for a box of popcorn or a cold drink. More ingenuity is called for. Time is a major concern for many vehicle owners, so one new specialty called “Cosmetic Car Repair” includes an in-house bumper repair kit that can sometimes enable the shop to turn out a bumper repair in just a few hours. This eliminates outsourcing costs and also delivers the rapid repair the customer wants. Another aspect of the same system is a more sophisticated version of paintless dent repair. Once again, speed of repair is the special value. Although cosmetic car repair is a specific system, other cosmetic improvements may be desired. Many shops have a contract with a vehicle graphics provider who will do pin striping, clear car bras and more. Another dimension of the luxury theater game is a focus on providing select films specifically chosen for an audience with those preferences. Invi-

tation-only showings have already begun. If a shop has managed to capture sufficient information about customers, it may be in a position to do invitation-only showings. For example, as baby-boomers age, there are more handicapped drivers. A showing of power lifts, power running boards and special driver’s seat modifications could bring in previous customers who were, or have become, handicapped. Prior customers whose children are reaching driving age may respond to an invitation to see blackbox driving controls and speed governor systems. Parents of younger children are more concerned with child car seats. These must be placed properly to provide maximum protection. Manufacturers of products like these may be willing to send a representative to the shop to do an invitation-only demonstration for customers with small chil-

dren. More than a million pets are killed every year in vehicle accidents. Pet restraints and other controls are not only another add-on a shop can offer pet owner customers, but if a shop has collected customer information about pets, an invitation-only presentation of pet control products is possible. As a shop gets more involved in providing a few luxury accessories, significant opportunities open up to go beyond repairs and become an information provider. Like the child car manufacturers or distributors, these accessory providers have a wealth of representatives eager to go out to generate business for their companies. All you, as the shop owner, have to do is send out the invitations and provide the space and perhaps a few refreshments. In a sense, you become the new theater owner in a business once limited to collision repair.

Sierra Vista, AZ Gets Red Light Cameras

Sierra Vista’s first red light photo enforcement camera is clicking away. Redflex systems will be installing at least four more cameras at city intersections, according to Claims Journal. The cameras will catch drivers who run red lights, even if they are turning left or right. The cameras will also take pictures of drivers who go more than 10 miles per hour over the speed limit. KVOA-TV reported that drivers who are caught in the first 30 days will only get a warning in the mail.

City officials say Sierra Vista is not out to make money. All the money goes to Cochise County Justice Courts. Redflex will make $45 on each of the first 150 paid tickets, and $35 after that. Redflex only makes money if the offender pays the citation. The city can cancel the contract if accidents do not improve by 25 percent in the first year.

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Santa Clara CAA Hosts 18th Annual Golf Tournament by Ed Attanasio

Golf is a difficult game, but running a body shop is even harder. So, logically you would think that playing golf would be an easy task for people working in the collision industry. Evidently, it’s not the case.

From left, Ron Vincenzi from Oakland Auto Body, Randy Greenblat, Auto Collision Center, and Joe Culbertson, Nor Cal Vada Equipment tell tall golf stories at the SCC-CAA’s annual golf tournament at Cinnabar Hills

Golf balls were raining down like sunshine on a beautiful day when the Santa Clara Chapter of the California Autobody Association hosted its 18th Annual Golf Tournament at the Cinnabar Hills Golf Club in San Jose, California in late August. The only

problem was—most of the balls were landing in the bushes, on golf paths and in surrounding trees. With 75 golfers primed to attack this beautiful course overlooking Coyote Canyon, body shop personnel, vendors, industry icons and friends were quickly humbled by the course’s undulating greens, tight fairways and bottomless bunkers. Cinnabar Hills is an award-winning course consisting of 27 holes, but 18 were more than enough for the participants, according to Rob Snow, SCC CAA member and former officer. “It’s not about the golf, fortunately,” said Snow, who owns Monterey Collision in San Jose. “It’s about hanging out with people you respect and work with. Getting a nice crowd for this tournament is a big deal and maybe it tells us that we’re coming out of this recession and looking for better days.” Tobias Padilla from Hertz was the main force behind the event. “It was a strong turnout and everyone had a great time,” Padilla said. “We all work very hard in this industry, so

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great and I want to thank everyone who volunteered their time to make it a big success.” The biggest Tiger Woodslike moment of the day took place when Young Ko, the owner of KS California Auto Body in San Jose nailed the closest to the pin, when his From left, Ron Neilson, Active Auto Body; Shawn Saidi, ball landed less than a foot Active Auto Body (SCC-CAA Chapter President); Chad Iken, Enterprise Rent-a-Car (SCC-CAA Chapter Secretary); from the 17th hole. The modAlex Ornelas, Toyota of Palo Alto and Steve Sturken, est gallery (three squirrels and Sturken Auto Body unwind after a big day of golf a pigeon) gasped at the majeswhen we get a whole day to enjoy a tic shot and Ko is undoubtedly still sport like golf, it’s a much-needed talking about it. break. The people at Cinnabar were Ko’s name also appeared in the victorious foursome that captured the tournament, with Vince Rojas from Annex Color & Supply, associate Jeff Parker and Joe Bugisle from BASF. With a good share of birdies sprinkled in with a passel of pars, this foursome took the title From left, Martin Auto Color featured an amazing foursome, and walked away with consisting of Monte Merritt, Julio Castillo, Don Dutra, (Golf Cothe coveted title. Chair) and Dave Pillado

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CARSTAR 2011 Holds National Teleconference At Annual Seattle National Conference CARSTAR held their annual National Conference for 2011 in Seattle, WA, from September 24 through 27. The conference drew in around 400 industry members and franchisees. During a teleconference leaders of the multiple shop operator (MSO) offered insights into their future plans for growth over the next few years. CARSTAR’s CEO, David Byers, who was added to the team as of this year, started the conference by highlighting where CARSTAR is presently. Byers said the MSO is on track to reach total sales of at least $600 million, and that according to industry averages for independent shops, individual CARSTAR franchises make about twice as much per year. Byers also talked about how the MSO has been able to continue to grow thanks to continued industry consolidation since the company’s inception in 1989 and an increasing trend of insurers moving towards using MSOs. At the Conference Ryan Keller was named the new head of Business

Development, and he is expected to help the MSO open 40 to 50 new stores in the next year. This is 2 to 3 times more growth than the MSO has been able to produce over the last few

left to right: Stacy Bartnik, VP, Field Services; Bill Garoutte, AVP, Marketing; Ermie Lakey, VP, Purchasing; Ryan Keller, VP, Franchise Development; Dan Young, VP, Insurance Relations; Brad Rein, Director of IT; Bing Wong, CARSTAR Canada; Michael Macaluso, CARSTAR Canada

years. This dramatic increase in growth is expected because of a renewed focus on acquiring new stores and adding a lot of new staff, according to Byers.

Southern Polyurethanes Inc. Retains House of Klear for Southern California Distribution

Southern Polyurethanes Inc (SPI), manufacturer of clear coats, primers and other products for 17 years, has continued to expand its' distribution network with the addition of House of Klear as the exclusive distributor of the full SPI product line for Southern California. Last year SPI achieved a 35% annual growth in sales over the previous year due in part to the addition of new distributors. House of Klear, a division of Young International, is focused on bringing superior refinish materials to the Southern California market. "After a successful 1 year product evaluation with key shops, we are very excited to be offering such a quality product line to our current customers and of course those shops we have yet to meet. I believe we are providing shops the opportunity to improve the quality of their refinish work at the same reduce their materials costs" said John Young, House of Klear managing director. "Our customers have confirmed that the SPI products are truly among the industries best and one of the best kept secrets in the business. House of Klear is experiencing tremendous sales growth and the customer base is

Dan Young, Senior Vice President of Insurance Relations mentioned that part of CARSTAR’s success can be attributed to the way their franchises are set up. Although each store is a

growing rapidly. I think times are very tough for many shops and finding products that improve quality and reduce costs is a good formula. We invite quality production shops, restoration shops and individual painters to try SPI and see the difference," continued Young. SPI product include Universal, Euro and Production Clear Coats, 2K Regular Build, High-Build and Turbo High-Build Primers, 2K Sealer, Epoxy Primer, Plastic Adhesion Promoter, Waterborne Wax & Grease Remover, Polar Accelerator, Liquid Flattening Agent and Urethane Reducers. Please visit www.SouthernPolyurethanes.com for more information.

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shartman@autobodynews.com

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CARSTAR franchise, there remains one owner at each location and this enables the franchises to self-manage and have a single point of contact for insurers and customers per franchise.

Stacy Bartnik, Vice President of Field Services also talked about the MSO’s continued efforts to grow existing stores as well. She mentioned training existing shops on lean processes so they can improve cycle and touch times. Gerald Wicklund, Owner of Wicklund’s CARSTAR was also on the teleconference. His franchise was the first franchise of CARSTAR and he is the second generation owner. He talked about the Conference’s focus on educating their franchises about effective marketing and website and social media management. Wicklund also mentioned that the military appreciation efforts his franchise makes have been very effective marketing tools for his business. “25 to 30 percent of my customers that come in the door have done their own research before I write the estimate,” said Wicklund. Wicklund’s CARSTAR was also honored with the Outstanding CSI Award at the conference this year. For more information please visit www.carstar.com.

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Industry Insight with John Yoswick

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

SCRS Affiliate Groups Help Members Address Legislative and Regulatory Issues State and regional associations—that together represent more than 2,000 body shops—participated in the sixth annual “Affiliate Leadership Conference” organized by the Society of Collision Repair Specialists (SCRS) and held near Chicago in mid-September. SCRS Chairman Aaron Clark said the event is designed to help the national association gather input from its state affiliates on its direction and efforts, as well as to help those groups work with one another and with the national organization. The affiliate groups reported on their recent and upcoming legislative efforts, their interactions with shop and insurer regulators, and other activities and issues in which they have recently been involved. In Montana this past spring, for example, Governor Brian Schweitzer

signed into law a bill, sponsored by the Montana Collision Repair Specialists, that prohibits a insurer from “unilaterally disregard(ing) a repair operation or cost identified by an estimating system” that the insurer and shop have agreed to use to determine the cost of repair. Bruce Halcro, a Montana shop owner and president of the association, said getting the state auto dealers’ association involved in backing the legislation was part of what helped push it through the legBruce Halcro islature, where it narrowly failed just two years earlier. The Montana association this year had also backed a bill that would have allowed body shops and others – rather than only consumers—to file

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complaints with the state insurance commissioner’s office. That bill was overwhelmingly approved 97-3 by the Montana House, but died in a Senate committee. Jordan Hendler, executive director of the Washington Metropolitan Auto Body Association (WMABA), said that this was the second year the association battled efforts in Virginia to raise the threshold of damage requiring a flood-damaged vehicle to receive a branded title from $1,000 to $5,000. Proponents—including a state legislator whose vehicle was totaled after the sunroof of his vehicle was left open in a r a i n s t o r m — a rgued that the threshold had been Jordan Hendler set decades ago, and was unrealistic given inflation and

the increased value of vehicles. Hendler said her group tried to point out that today’s vehicles have far more electronics than cars had decades ago, and that no consumer should unknowingly buy a vehicle that has had thousands of dollars in water damage. In the end, she said, the threshold was raised to $2,500. Hendler said the association is also working with the Virginia Department of Environmental Quality on a possible shop registration program that could prohibit the largequantity sale of automotive paint to anyone other than registered shops. A sales tax issue has recently arisen in Indiana, according to Tony Passwater, executive director of the Indiana Auto Body Association. A shop in that state contacted the association after a sales tax audit resulted in a $13,000 assessment plus penalSee SCRS, Page 22

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SCRS

ties for failure to collect and remit sales tax on items such as sandpaper and tape consumed in the repair of vehicles. Passwater said the auditor relied on a document that refers only to dealers of new cars and trailers. “There’s no possible way you would infer it had anything to do with a collision repair facility,” Passwater said. “The very last section says a dealer must pay sales tax on shop rags and towels and consumables that are not billed to the customer.” He said he is discussing the matter with the state revenue department in a effort to clarify and resolve the issue. Ron Stamm of the Automotive Service Council of Kentucky said his group expects to make a third attempt next year to push for consumer notification legislation in that state. The association-backed bill, which has narrowly missed making it through the legislative process this year and last, would require insurers to include notification of a consumer’s right to

select a repair shop on the bottom of printed estimates, and to tell the consumer of that right prior to explaining any direct repair program. The Texas Senate this past March approved a bill to establish an advisory board of shop, insurer, and public representatives to provide recommendations on the regulation of auto insurance in that state, But tthe bill never gained traction in James Brown the Texas House, according to James Brown of the Houston Auto Body Association. Likewise the Senate passed (but the House did not) a bill that would have required insurance companies to provide written notice to both shops and consumers explaining how their payment policies and claims procedures differ between direct repair facilities and non-direct repair facilities. The bill also would have required insurers to provide to shops, upon request, a written explanation of the requirements to become a DRP facility with that insurer. It also would

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have made county mutual insurers— which account for about 45 percent of the Texas market—subject to state anti-steering and consumer choice laws (from which they remain exempt). More recently and even closer to home for the Houston association, Brown said his group is opposing (in its current form) new shop and auto recycler licensing requirements being considered by the Houston City Council. The proposal sets out new disclosure and documentation requirements, and establishes an 11member “automotive board” appointed by the mayor (and not necessarily including a collision repair shop representative). While the proposal includes no minimum requirements for equipment or training, it has detailed rules regarding fencing around the business property, and makes it unlawful for “grass or vegetation to grow to a height of more than nine inches above the ground.” Brown said there is a lot to like in the 28-page proposal, and he applauds the council’s effort to deal with the businesses—including shops connected with towing storage lots—

that “hold vehicles hostage” and charge exorbitant fees to release a vehicle that a consumer wishes to move to another repair facility. But, he said, some of the mandates—such as requiring customer signature on any supplement over $100, and storing (at customer request) old part sfor up to three days to return to the customer—are just too cumbersome. His group is also concerned that the proposal essentially gives insurers, as the “authorized agent” of the consumer, the same rights as the owner of the vehicle. In an unrelated effort, Brown said the Houston association recently had a shop labor rate survey conducted by an independent third-party. Shops are being urged to notify state insurance regulators if an insurer is unwilling to pay the shop’s posted labor rate by taking a photo of the posted rate and emailing it along with the estimate at the lower rate (with customer and claim information omitted) to the Texas Department of Insurance. “Right now they’re just collecting those and we’re laying the groundwork,” Brown said.

In addition to discussing ways to address issues that many of the state groups are facing, the affiliates also discussed some of the issues SCRS is pursuing, including a survey to insurers about their policies on parts usage, and interaction with the Environmental Protection Agency regarding interpretation and enforcement of its new refinishing regulation.

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

Dennis Grau of Exide Technologies Appointed to CA/NV/AZ Automotive Wholesalers Association (CAWA) Manufacturers’ Advisory Council

Dennis Grau has been appointed to the California/Nevada/Arizona Automotive Wholesalers Association’s (CAWA) Manufacturers’ Advisory Council (MAC), representing Exide Technologies. His office is in Phoenix, Arizona. He was appointed by Chair of the Board, Mary Davis, NGK Spark Plugs of Sacramento, California. “We are pleased to welcome Mr. Grau into the leadership of CAWA and look forward to his participation and contributions to the Association and the industry we represent out west”, said Davis following the ap-

pointment. Davis went on to say that “we are pleased that he has stepped forward in volunteer service to the Association”. CAWA is an automotive aftermarket trade association, which represents auto parts jobbers, warehouse distributors, retailers, manufacturers and manufacturer representatives in California, Nevada and Arizona. The Association provides education, legislative, regulatory and business support to the industry and its membership. It is one of the largest trade associations of its kind in the United States and recognized as a

leader in the automotive aftermarket industry. For more information please visit www.cawa.org.

California Law Protects Claims From Disabled Insureds A new California law helps level the playing field for consumers fighting disability claim denials with insurance companies. Signed by Gov. Jerry Brown Oct. 3, the new law voids discretionary clauses in disability, health and life insurance that give insurers sole discretion to interpret the policies and decide if policyholders are entitled to benefits. The use of discretionary clauses has become particularly troublesome for disability insurance policyholders. “Discretionary clauses have been increasingly relied upon by insurers to reject legitimate claims for disability insurance when a consumer becomes disabled,” Insurance Commissioner Dave Jones said. “Insurers know that many consumers will give up their claim and that those who challenge the claim denial face a very high legal burden to overcome the denial since the discretionary clause vests sole discretion in the insurer to decide if the consumer is disabled.” Jones said the new law gives consumers an even chance to prove they are entitled to disability and other insurance benefits. The law, authored by Senate Insurance Committee Chair Ron Calderon, D-Montebello, and sponsored by Jones, goes into effect Jan. 1, 2012.

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Dollar Thrifty Halts Sale Process, Hertz Still Interested in Acquisition Car rental firm Hertz Global Holdings still wants to buy Dollar Thrifty Automotive Group, despite missing a deadline to make a final offer, and is chasing antitrust approval for a takeover of its smaller rival, according to Reuters. On October 11, Dollar Thrifty said it failed by end-October 10 to flush out any final takeover bids that met antitrust concerns, and planned to go ahead as a stand-alone company. However, Dollar Thrifty, which has been at the center of an 18-month tug-of-war between Hertz and rival Avis Budget, said it would consider any changes to Hertz’s offer or any other offer that might be made. “We remain interested in acquiring Dollar Thrifty. We remain focused on receiving an FTC consent decree,” Hertz spokesman Richard Broome told Reuters, referring to the Federal Trade Commission. “That’s the first step in the process.” Dollar Thrifty is seen as the last big prize in an industry that has consolidated in recent years, but its takeover has been uncertain as this would leave three players dominating more than 90 percent of a U.S. car rental market worth close to $21 billion in 2010. The market leader is privately-held Enterprise. One of Dollar Thrifty’s biggest shareholders said it was highly likely Hertz would win antitrust approval and would push to get a deal through early. The shareholder asked not to be identified due to the sensitivity of the issue.

He noted that Avis, which dropped out of the bidding last month citing volatile debt markets and its recent $1 billion acquisition of its European arm, has the potential to return to the bidding fray in a few months when it has paid down its debt. Dollar Thrifty had come up with October 10’s deadline as it sought to speed up the bidding race between Hertz and Avis, but the ultimatum lost its edge once Avis withdrew, he said. In August, Dollar Thrifty CEO Scott Thompson said the long-pending deal had kept the company from moving forward on growth initiatives and, last month, he wrote to both Avis and Hertz asking for their

final written proposals by October 10. Dollar Thrifty decided that continuing the sale process—with uncertainty still over regulatory approval—would be costly and time-consuming, said a person close to the situation, who was not authorized to speak to the media. Hertz has a tender offer open to Dollar Thrifty shareholders that values the company at around $1.92 billion. Thompson said his counterpart at Hertz called him on October 7 to reaffirm the company’s commitment to pursuing a deal. “... the fact remains that they have not made a proposal that addresses our

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board’s requirements,” Thompson said. Hertz was always seen as more likely to win regulatory clearance as it serves the high-end market, and is already in the process of selling its lowcost Advantage brand. But Hertz will have to raise its $66.21 per share offer to somewhere in the region of $75 a share, the Dollar Thrifty shareholder said. Tulsa, Oklahoma-based Dollar Thrifty reiterated its third-quarter outlook, and said it would soon start a $400 million share buyback program, buying back around $100 million worth of shares per quarter over the next four quarters.

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The San Diego chapter of the California Autobody Association (CAA) will hold their 7th annual holiday event on November 5 at Tom Ham’s Lighthouse in San Diego from 7p.m. to midnight. This year’s holiday event will be hosted by close-up magician and game master Barryn Vaughn. The cost of the event is $45 for members, family and friends before October 31. After October 31 the cost is $50. For the cost of the ticket attendees get a buffet dinner, (1) 50/50 raffle ticket, dancing, and a fun-filled night of holiday escapades. Raffle prizes will be drawn throughout the night, the 50/50 raffle will be drawn at 10:30p.m. For more information call Hop Sanchez at 760-275-9246.

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Girl Scouts Gear Up at NACE for Collision Hub’s Tools for Success tory of DuPont with Petra Schroeder, the chemistry of paint and color with Laura Yerkey of ProSpray, advanced software and new technologies from CCC’s Susanna Gotsch, scholarship opportunities with the Women’s Industry Network, and more. Following the NACE Tools for Success tour, Collision Hub hosted a Women’s Panel sponsored by LKQ and moderated by Eileen Sottile, which featured: ● Kristen Felder—Founder and CEO, Collision Hub ● Denise Casperson— Manager, ASA Collision Division ● Audra Fordin—Owner, Great Bear Auto Repair and Auto Body Shop, Flushing, NY ● Stacee L. Royce—Laboratory Manager, Paint Applications and Local Girl Scouts were able to tour the NACE floor and get a taste of the collision repair industry in Masking Systems, 3M Collision Hub’s second annual Tools for Success Automotive Aftermarket Div. program ● Petra Schroeder—Brand Development Manager Standox, Dupont portunities available to young women Performance Coatings in the collision repair. ● Victoria Jankowski—P&C Claims The girls learned about frame Consultant, State Farm and President equipment and measurement systems of WIN with Bob Holland of Chief, the his-

With over 100 girls registered and nearly that number in attendance, Collision Hub’s second annual Girl Scouts: Tools for Success program was a huge success. For the event, the Girl Scouts of Citrus Council in Orlando came to the NACE show floor for an hour of conversations with leaders in the industry about the incredible op-

26 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com

Girls heard from these incredible women about everything from their personal journeys into the industry to words of advice going forward. Collision Hub offers this program as a way to connect with the leadership pipeline that is the Girl Scouts and to possibly light the spark that will one day usher them into the industry as our future CEOs, Marketers, Painters, Lobbyists, Technicians, Mechanics, Shop Owners, Engineers, Chemists, Industry Analysts and more. “In addition to their time on the NACE floor visiting selected company booths, we were able to introduce these dynamic young women to the work of the Women's Industry Network and the National Autobody Council's Recycled Rides Program,” said Kristen Felder, Collision Hub Founder and CEO. “We believe that October 8, 2011 was yet another step towards a wonderful career exploration and mentoring program between the Girl Scouts of America and the collision repair industry at large.” Tools for Success was Presented By Enterprise Rent-A-Car with the

Women’s Panel Discussion and lunch Provided By LKQ. Other event sponsors included: Chief Automotive Technologies, 3M, PPG, VeriFacts Automotive, AutoBody America, AkzoNobel, Fix Auto, DuPont, CARSTAR, Mitchell, Esurance, Pro-Spray Automotive Refinishes, Automotive Service Excellence and CCC Information Services. The Girl Scouts is reforming its mission to incorporate an emphasis on engineering, science, and technology and are seeking avenues to achieve this goal. As the collision repair industry continues to seek ways to recruit new talent and creative methods for connecting with costumers, Collision Hub hopes to offer access to a truly untapped demographic. Tools for Success offered a unique opportunity for leaders in our industry to speak with a premiere group of goal-oriented and intelligent young women and capture their potential as future leaders and consumers as well as the support of each scout’s extensive personal network as potential customers and champions of the collision industry.

Busy Shop Clearly Sees Benefits Working with Pro-Spray Solvent & Waterborne by Ed Attanasio

As the owner of Icon Collision in Memphis, Tennessee, Tim Russell runs a body shop that fixes approximately 210–230 cars every month, does $6 million in business annually and oversees six busy divisions—including two detailing businesses, a PDR department, a glass division, a retail collision branch and a wholesale body shop. Specializing in highend luxury vehicles, Icon works with several Memphis-area car dealerships that don’t have their own collision centers, such as Lexus of Memphis, Wolfchase Toyota-Scion, Performance Toyota and Wolfchase Dodge, Chrysler Jeep. Russell needs a paint system that will produce top tier paint jobs each and every time, either waterborne or solvent, depending on the job. That’s why he’s pleased to be using both of Pro-Spray’s paint systems—the Solvent Basecoat and the H2O Waterborne Basecoat. Russell, now 51, worked for sixteen years at a Memphis dealership group running their collision center and servicing their eight dealerships. When the group was sold to a large company, the climate changed rapidly. Russell wasn’t happy with the new corporate environment, so he decided to start his own shop. Icon Collision was opened in 2006 and the business grew at an alarming rate. The shop did $80,000 in sales the first month and doubled that the second month. Today, the business grosses roughly $500,000 every month. When Russell opened the doors at Icon six years ago, he initially signed with another paint company. “In the end, I left them because their color matches were not accurate enough. We just weren’t able to hit on a lot of the colors. They brought in their managers and it got to where I couldn’t even hit white pearls for Lexus cars anymore and it got embarrassing. So, we started looking around for a better solution.” Russell sat down with Mike Aguirre from Color Connection, who he had known for quite some time and who was now representing ProSpray. They met with Todd Berry, Pro-Spray’s local distributor and Phil Rich, Pro-Spray’s territory sales manager and went through the advantages and savings associated with the Pro-Spray products. As they say, the proof is in the pudding, so Russell and his crew tested and retested the products.

SHOP & PRODUCT SHOWCASE Icon Collision Services Location: Memphis, TN

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Recalls Russell, “One day, I couldn’t get a match on a Lexus we were painting, so I called Mike at Color Connection and said can you match this color?” He said, ‘we can butt match it.’ I told him, ‘get down here and if you can butt match these panels, we’ll talk.’ He gave us the Pro-Spray paint and without tinting or mixing, we hit it right the first time. I thought that was pretty incredible.” “All of the Pro-Spray people came here to the shop and we talked to them. I looked at the pricing and realized it’s about 40 percent less than what I was paying with the other company. I could also see that they hadn’t done a price increase in three years, while our other paint company was raising their prices about 6–10%, or even more, every year.” Other benefits became clear the more he looked at Pro-Spray. “I analyzed Pro-Spray’s clear coats, because that is always one of the main things I look at. I like high solid clears, and they have 52% high solid clear, with the competition coming in at 48%. It doesn’t look like a big difference, but if I can get a better clear at a lower price, why not? “The major things we were concerned about were the color matches and the protection provided by the clear coats. It’s not rocket science. If it’s prepped properly, it will last. We’re more concerned with the color match and the clear.” Hitting on color matches with Pro-Spray also got his attention, Russell explained. “Hey, I‘m not expecting every paint manufacturer to

match every color every time, because it just isn’t going to happen. There are times you’re going to have to tint, for various reasons, and that’s a reality. But, Pro-Spray definitely impressed me and I made a deal with them. We started with ProSpray in late 2009 and we’ve been spraying it ever since.” Adopting Pro-Spray was a gradual yet fairly drama-free process, Russell said. “We started by using their solvent product and about six months ago we added their waterborne line. They brought in their people and we didn’t have to send anyone to a school, so it was convenient. They had five people here for a full two weeks with the solvent and two people here in the shop with one week for the waterborne. We added the waterborne because more and more of these newer models are painted with waterborne. Right now he’s painting more cars with solvent, but that may change, Russell stated. “I have both systems in place and I’m letting my painters decide. They’re picking 90% solvent right now, because they’re comfortable using it and right now it takes them 15-20% longer using the waterborne. So, I’m going to have to make a decision soon on whether to make a full changeover to waterborne or use both. My guys get paid flat rate and the more cars they paint means more money in their pockets. Everyone hates change, but we like the Pro-Spray H2O waterborne, so once we can get faster at using it, the transition will be easier to make.”

Icon Collision in Memphis, Tennessee, is currently using both solvent and waterborne products by Pro-Spray in his busy shop. They’re painting more than 200 cars monthly.

Owner Tim Russell values Pro-Spray’s colormatching capabilities, as well as its attractive pricing and the quality of the finished product.

Pro-Spray Automotive Finishes Phone: (800) 776-0933 email: info@prosprayfinishes.com website: www.ProSprayFinishes.com www.ProSprayH2O.com

www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 27

Social Media for Shops

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

How to Use Five Different Forms of Social Media to Gain Customers with Ed Attanasio

I mentioned social media to a body shop owner recently and, to my surprise, he was almost hostile to the concept. There seems to be a very localized group in the collision industry that really understands social media and this guy was not one of them. “Why would I put my shop on Facebook?” he said. “I don’t have a lot of customers who are teenage girls!” I told this gentleman that Facebook and most other forms of social media aren’t being used exclusively by teenage girls. Facebook’s 800 million members aren’t all teenagers, and they certainly aren’t all girls. Last month’s NACE meeting featured a keynote speaker, Chris Brogan, who’s a social media guru accustomed to talking to large automotive groups like those attending NACE/CARS, and the GM Dealers of Canada, for example.

What’s going on here? Why would some shops and associations spend valuable time instructing on social media while others can’t run away from it fast enough? David Moore, the owner of CollisionBuilder.com, a company that designs web sites and develops social media plans for body shops and related businesses, has seen a recent spike in body shops getting involved in several forms of social media. “It’s unavoidable,” Moore explained. “Three or five years ago, having a company web site was enough, but now your shop’s customers are using more and more social media. It’s not just for students or people in their 20s anymore. Corporate types, senior citizens, your employees and your competitors are using it and in many cases, several times daily. To keep in touch with your clients on a regular basis and attract new ones, more and

28 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com

more body shops are gravitating toward sites like Facebook, Twitter, LinkedIn and even Youtube, with solid results.” One of the early adopters of social media in the collision industry was Wren’s Body Shop in Douglasville, Georgia, a company that repairs 160 cars monthly, employs 20 people and does approximately $3 million in annual sales. Owner James Wren jumped into the social media game with both feet several years ago and it’s paid off for him in a big way. “I know for a fact we’ve received a good amount of business through our involvement in Facebook and LinkedIn,” Wren said. “Sometimes we get several new customers every month and the social media keeps us in touch with our past customers. We’re still doing the other forms of advertising, but now we’re focusing more on social media. All it costs us

is our time, so it makes a lot more sense. Facebook has been great for us getting new business. LinkedIn has been booming for us recently and we’re definitely interested in using Youtube to get exposure for a video we produced.” Facebook and LinkedIn are ideal vehicles for body shops or professional organizations, such as the California Autobody Association, to keep its members informed and in the loop about news and events. Rather than getting an avalanche of e-mails from you, people interested in your business can check in for updates along the way. It’s not as disruptive as email because you don’t have to worry about spam. When your neighbors and peers see your social media posts, it adds immediate value to your message, and the interaction among the group can rapidly build. See Social Media, Page 30

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Continued from Page 28

Social Media

The first thing you need to do in order to start a social media plan, (in my opinion), is to create a Facebook page. Then, invite friends to your page and spread the word. Get your employees, customers and vendors who use Facebook to invite their friends as well. This will enable you to contact anywhere from hundreds to thousands of people just be tapping into your employees’ friends’ lists. For a direct approach, it’s very easy to find specific people by searching for them on Facebook and sending them a message through the link that’s under their profile picture. What types of information should you post about your shop? Well, pretty much anything and everything to create ongoing online conversations among your friends. Did you recently repair a rare or classic vehicle? Did some of your techs win an award for their job performance or recently complete some I-CAR courses? Does your painter have an amazing hot wings recipe (forward it to me,

please)? These are the types of things that will keep your circle of friends engaged and continually checking out your social media. Make it fun and readable and people will come back again and again. The process with LinkedIn is basically the same, but focusing more on your professional contacts. With any form of social media, setting it up is a big step, but administrating and maintaining it is also crucial. Too many shops start doing it because their competitor down the street is doing it, but eventually they let their social media sit dormant. People think “If I build it, they will come” but that couldn’t be further from the truth. Ideally, you should have a person dedicated to keep the dialog flowing and your social media up-to-date, with at 2-3 new posts monthly. The advantage of Twitter is that anyone out there in cyberland can find your shop. I suggest putting the name of your city in your Twitter address (like @joesbodyshopsanjose) so that people can find you searching that way. Hopefully, if you’ve been tweeting for sometime already, you already have a considerable Twitter commu-

nity assembled, but if not you can rapidly build one by letting all of your current and former customers, vendors and associates about your new Twitter account, by sending notifications to everyone on your e-mail list. Blogspot.com (others are blogger.com, wordpress.com, tumblr.com) is an easy site to use for setting up and maintaining a blog for your shop. Blogs are stronger than ever before and they provide advantages over web sites, because they can easily be updated on a regular basis. Think of a newsletter concentrating on your shop. Blog readers will anticipate and expect fresh information. Give customers helpful tips; talk about your paint, parts and equipment vendors (they appreciate it) and continually sell your brand. It’s fairly easy to publish a blog and by leveraging it and linking it to your main web site, you’ll get major mileage out of it. To learn a lot quickly about blogging, there are a ton of books and online tutorials. But, trust me—blogs are easy to create. If you know how to attach a photo or cut and paste text, you’re already there. Finally, Youtube can help you to attract people to your company. Shoot

some video of the shop, interviewing your managers or your techs and counter people. You can even interview your vendors and/or customers, but get them to sign releases first. And then post the videos on Youtube, linking them to your social media, including your blog and your web site. One suggestion is make your videos less than two minutes in length, because studies show that people have very short attention spans and won’t sit through anything longer. A step beyond a blog would be a more dedicated phone app which provides a service but also helps customers find your shop such as those created by shops like Nigro’s in Philadelphia. See last month’s Autobody News or go online to check this out. Hopefully we’ve outlined some basic forms of social media for you to use to promote your business, attract new customers, strengthen your relationships with your existing customers and make money. All it takes is time, a rudimentary knowledge of software and the willingness to induct yourself into the new age of customer-focused advertising.

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State Farm Offers to Settle Three of Gunder’s Customers’ Lawsuits Following Ray Gunder’s charge alleging altered documents that show State Farm’s manipulation of their market survey of rates and allowances, State Farm has elected to pay the charged amounts of Gunder’s Auto Center and avoid further discovery of its business records. See sidebar. In seeking discoverable information pertinent to three separate lawsuits by three of Gunder’s customers (of which Gunder was acting on behalf of each customer through power-ofattorney) State Farm’s refusal/failure to provide the requested documentation within the time-frame provided resulted in a court’s order compelling the nation’s largest personal auto insurer to comply and present the subpoenaed records ‘or else.’ As a result, State Farm first made overtures of a global settlement to avoid further litigation (and discovery) by inviting Gunder’s to mediate the more than 30 pending lawsuits pressed against them on behalf of Gunder’s customers for claims including, but not limited to Tortious Interference against State Farm employees including Larry

A Bit of History in Gunder’s Case Against State Farm

Swearengin and Bob Davis as well as Breach of Contract and Bad Faith claims against State Farm Insurance. While guarded, Ray Gunder agreed and thus the Contempt of Court hearing scheduled for September 22nd was postponed and mediation was scheduled for October 6th, 2011. On September 27th, Gunder received notice that State Farm would provide full payment for the amounts outstanding on the three lawsuits which were pending which included the issue of Contempt of Court. ● Raymond Ellsworth Gunder [Wincey] v. State Farm Florida Insurance Company Case No.: 53-2008SC005094-0000-00, County Court, Polk County, FL Initial amount at issue $163.31 ● Raymond Ellsworth Gunder [Miller] v. State Farm Florida Insurance Company Case No.: 53-2008SC005093-0000-00, County Court, Polk County, FL Initial amount at issue $124.48. ● Raymond Ellsworth Gunder [Dewey] v. State Farm Florida Insur-

These claims on behalf of customers of Gunder’s Auto Center are part of a long legal history between the auto center and State Farm. In early 2010 Gunder filed a claim against State Farm for Tortious Interference and Slander following disparaging comments allegedly made by employees of the insurer to their customers regarding the body shop. “This entire matter hinges on whether any insurer, including State Farm, can merely target a repairer and have the right to say anything they wish with the intent to harm the repairer and disparage their good name in an effort to interfere with the relationship between the repairer and their customer; so long as the insurer does not breach the legal limit referred to as ‘Expressed Malice’, said Ray Gunder, owner of the shop, in a statement last May. The suit has gone through the appeals process multiple times since the initial complaint was filed. Most recently, in April of 2011, the U.S. Court of Appeals for the Eleventh Circuit upheld a lower court’s order granting summary judgment in favor of State Farm in Gunder’s claim of

See State Farm Offers, Page 34

slander and tortious interference with a business relationship against the nation’s largest personal auto insurer. In June Gunder filed an appeal of the decision with the U.S. Supreme Court. “After considerable thought, counsel and discussion with family and close friends, and as a result of recent activities on other pending cases against State Farm, I decided to proceed with submitting what is referred to as a Petition for Writ of Certiorari to the United States Supreme Court requesting their review and opinion of the lower court’s ruling,” Gunder said. “As we continue to ‘pound that rock,’ I see we are standing on a substantial amount of gravel…and as I’ve said before, we’re all-in and we’re too close to quit now and will continue until we either prevail or exhaust all opportunities to do so.”

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The Insider is a corporate-level executive with a Top 10 auto insurer in the U.S.. Got a comment or question you’d like to see him address in a future column? Email him at Auto.Insurance.Insider@gmail.com

Can the Collision Industry Support Two Major Trade Shows? with The Insurance Insider

“The Insider” is an auto insurance company executive who wishes to remain anonymous. This column reflects solely the opinion of The Insider in his unvarnished view of various issues impacting the collision industry.

Can NACE Survive as a ‘traveling regional trade show’? Well, it’s that time of year again: lights, slots, dice, scantily-clad women, lavish parties, casinos and NACE? Actually, it’s not—NACE is already over. In case you missed it, NACE (the International Autobody Congress and Exposition) took place in early October in Orlando, the first time it moved from Las Vegas in more than a half-dozen years. Yes, I was one of a handful of people that showed up to support the industry’s longest-standing national trade show. I have missed only four of the 29 of these annual extravaganzas,

and I wasn’t about to let a trip to sunny Florida deter me from attending. I have to admit, I was apprehensive about spending the money and time to attend two shows this year. . How this small industry can support two national trade shows (NACE and the SEMA show in November, which I will discuss in my next column) is beyond comprehension. In fact, I would say it’s not possible. Here’s my best guess: We will be back to one national industry trade show in the next three years. There’s no way that the large companies buying booth space will continue to throw good money after bad. Even aside from the poor economy, national trade shows like NACE are a dying breed. Yup, even the mighty dinosaur eventually went extinct. The once-almighty NACE is dying a slow death. Before anyone submits an obituary, please note that

the show still stands some chance of survival. Although this year’s NACE wasn’t the typical NACE we’ve been accustomed to, there was something different and positive. Aside from the fact that there weren’t a lot of people there, which made it easier to navigate the show floor, the smaller event meant my feet were intact after a few days of walking. Usually, I can hardly walk after the weekend marathon. All kidding aside, the positive news is the reality that NACE could survive and possibly reinvent itself as a traveling regional trade show. There is a small percentage of people who have attended NACE in the past few years who walk a trade show floor to find a special deal or see something new. But the vast majority of the attendees attend the show to participate in other related industry events, or to network and reduce future travel expenses by meeting with large groups

of people over a short period of time. Because this article is about sharing inside information and helping my dedicated readers gain a broader perspective, I suppose I should tell you something you probably don’t know. NACE transforming into just a large regional trade show didn’t happen overnight or by accident. It’s been a slow death. In the years leading up to its demise, the industry tried to tell organizers it was time for change. They assembled a committee of industry experts that were supposed to help guide them to “NACE: The Next Generation.” The goal: to actually create a trade show that met the demands of their customer and once again generated excitement. NACE organizers slowly changed the direction of the show, but by then it was too late. The excitement of NACE was basically reserved for those looking for a Las Vegas vaca-

www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 33

tion. Attendance plummeted. The reported show attendance became similar to an Enron annual report: There was a lot of inflated numbers and not a whole lot to support the fact that the trade show floor looked like a bocce ball court on the weekend. One would swear that they were using a dog-years multiplier where every one attendee accounted for seven [organizers said 15% more attended than last year]. Although NACE organizers made a lot of mistakes along the way and often acted with arrogance, there were other contributing factors. This is kind of like a murder mystery: There are a lot of suspects and clues, but we still aren’t sure of the killer or the murder weapon. But I think that the real killer of NACE was the SEMA show. SEMA is offering something that NACE no longer does: attendees, attendees and more attendees. Oh, and something else: attendees. SEMA can be found in the dictionary under the word “excitement.” SEMA will have about 10 times the number of attendees as NACE did this year. As far as the murder weapon, I

think it was a vote at a Collision Industry Conference (CIC) meeting in early 2010. The attendees of this conference were asked to vote when and where they would like their fall meeting to be held: keep it as scheduled in November in Las Vegas, or move it a few weeks earlier to when NACE had been rescheduled to be held. They voted for the conference to be held in Las Vegas at the same time as SEMA [by one vote—Ed.]. The rest is history and we now have two trade shows to support. That’s it for now. See you in Vegas, baby. The Insider is a corporate-level executive with a Top 10 auto insurer in the U.S. Got a comment or question you’d like him to address in a future column? Email him at Auto.Insurance.Insider@gmail.com.

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Continued from Page 32

State Farm Offers

ance Company Case No.: 5320011SC-00895-0000-LK, County Court, Polk County, FL Initial amount at issue $1,461.01. The payments included consideration for the underpaid amounts for paint & materials (supported by PMC Logic invoicing), low labor allowances and refusal to provide consideration for rarely questioned simple procedures from R&I of hardware and trim operations to refinish related processes such as car-cover, color sand and buff, etc. The initial mediation between Gunder’s and State Farm took place on the morning of October 6th and while a monetary offer (which would no doubt be considered substantial by some) was presented by State Farm’s legal counsel, it was found by Gunder to be insufficient and thus rejected. Following the mediation Gunder stated: “While I’m disappointed that we couldn’t come to an agreement; as I would very much like to put the issues behind us and be compensated fairly to restore people’s vehicles and

their peace of mind; we are encouraged to continue on with discovery and having our day in court. We have no fewer than 30 similar cases in the process of being filed on behalf of our customers; all with same or similar issues. State Farm is paying approximately $120,000 in legal fees and costs for these three cases which they have now elected to settle and will no doubt be paying substantially more in the coming months and years should things continue as in the past.” Shortly after mediation, a settlement letter came from State Farm. Review of the letter from State Farm legal counsel states in part: “After further consideration, and to discontinue the need for further litigation, State Farm has decided to tender the amounts at issue in each of the above-referenced matters, with interest.” The amounts State Farm will pay are: $163, $124 and $1,461, totalling $1748 and change. “In summary, with this letter, State Farm has paid the amount asserted by the insured to be in dispute for the above referenced claim, thereby curing any circumstance relating to any alleged improper estiSee State Farm Offers, Page 49

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www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 37

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GM Introduces Industry-First Front Center Airbag Autobody News

General Motors announced the industry’s first-ever front center air bag on September 29. The airbag is an inflatable restraint designed to help protect drivers and front passengers in farside impact crashes where the affected occupant is on the opposite, non-struck side of the vehicle. The front center air bag will be introduced on the Buick Enclave, GMC Acadia, and Chevrolet Traverse midsize crossovers in the 2013 model year. This new safety feature will be standard on Acadia and Traverse with power seats and all Enclaves. The front center air bag deploys from the right side of the driver’s seat and positions itself between the front row seats near the center of the vehicle. This tethered, tubular air bag is designed to provide restraint during passenger-side crashes when the driver is the only front occupant, and also acts as an energy absorbing cushion between driver and front passenger in both driver- and passenger-side crashes. The air bag also is expected to provide benefit in rollovers.

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GM analysis of the National Highway Traffic Safety Administration’s Fatality Analysis Reporting System database, found that far-side impact crashes, which the front center airbag primarily addresses, accounted for 11 percent of the belted front occupant fatalities in non-

GM’s industry-first front center airbag will deploy from the right side of the driver’s seat and protects the driver in side crashes

rollover impacts between 2004 and 2009 involving 1999 model year or newer vehicles. These far-side fatalities, where the occupant is on the nonstruck side of the vehicle, also represent 29 percent of all the belted

AM Tow Package Wiring Harnesses for Hyundai/Kia Recalled

Curt Manufacturing is recalling about 2,400 tow package wiring harnesses because moisture can seep into the converter module and defeat the internal circuit protection, according to reports made by Consumer Reports. This could potentially cause the module to overheat, leading to a fire hazard. Sold as an aftermarket product (not through Hyundai), the tow package wiring harnesses connect tow vehicle lighting circuits to trailer lighting circuits for 2009 through 2011 Hyundai Veracruz and Kia Sorento vehicles. The affected units that are not water tight, will have part number 56024. According to the National Highway Traffic Safety Administration, Curt Manufacturing has also identified a similar problem with the tow harnesses designed for 2009 to

2011 model year Hyundai Santa Fe SUVs. NHTSA and Curt have expanded the recall to include these models, part number 55538, believed to be installed in approximately 2,254 Hyundai Santa Fe vehicles. The safety recall to notify owners begins this month, and the tow package wiring harness will be replaced for free. Veracruz and Sorento owners who are uncertain the brand of tow gear on their vehicle should check, as it is possible that many consumers did not register their purchase and therefore would be difficult for Curt Manufacturing to reach. For more information, consumers can call Curt Manufacturing at 715-831-8713, or contact the National Highway Traffic Safety Administration at 888-327-4236, or visit Safercar.gov.

38 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com

front occupant fatalities in side impacts. “The front center air bag is not required by federal regulation, and no other air bag in passenger vehicles today offers the type of restraint and cushioning this air bag is designed to provide for front occupants,” said Scott Thomas, senior staff engineer in GM’s advanced restraint systems. The front center air bag is expected to add to the vehicles’ record of third-party crash test performance. The 2012 model year editions of these midsize crossovers have received five-star Overall and Side Crash safety ratings from NHTSA’s New Car Assessment Program, and 2011 Top Safety Picks from the Insurance Institute for Highway Safety. “The front center airbag has real potential to save lives in side crashes,” said Adrian Lund, president of the insurance Institute for Highway Safety. “GM and Takata are to be commended for taking the lead in this important area.”

November 2011 GM and technology supplier Takata developed the front center air bag over the course of three years, testing many design iterations to achieve packaging, cushioning, and restraint for a variety of crashes and occupant positions. Numerous elements of the air bag’s jointly patented cushion design address the restraint’s unique performance characteristics while considering a range of occupant sizes. “While no restraint technology can address all body regions or all potential injuries, the front center air bag is designed to work with the other air bags and safety belts in the vehicles to collectively deliver an even more comprehensive occupant restraint system,” said Gay Kent, GM executive director of Vehicle Safety and Crashworthiness. “This technology is a further demonstration of GM’s above-and-beyond commitment to provide continuous occupant protection before, during and after a crash.” More information can be found at www.gm.com.

2011-2012 Chevrolet Corvettes Recalled for Rear Hatch Hinges The National Highway Transportation Safety Administration (NHTSA) has announced a recall for 2011 and 2012 model year Chevrolet Corvettes, according to reports made by Consumer Reports.

The sport coupes have rear hatches that can separate during a collision and cause further injuries. According to NHTSA, the problem stems from faulty hinges, which may not be able to bear the weight of the sport car’s rear hatch.

These rear hatch hinges, which fail to meet federal safety standards, may have been installed in about 5,755 Chevy Corvettes from January to September of this year. General Motors is currently working to identify which Corvettes are involved in this latest recall. The company will contact owners affected by this recall to bring their cars to local dealerships where mechanics will replace both rear hatch hinges free of charge. For more information, consumers can contact Chevrolet (800630-2438) or NHTSA (toll-free: 888-327-4236) or visit the Safer Car website: www.SaferCar.gov.

Gonzo’s Toolbox

This is a new story by Scott “Gonzo” Weaver as posted on his website, www.gonzostoolbox.com. Gonzo has been serving the Tulsa area at Superior Auto Electric for over 27 years. See his book “Hey Look! I Found The Loose Nut”, which provides a Good Laugh for Mechanics of Any Age. The book is available at amazon.com. Contact Gonzo at Gonzosae@aol.com.

Dealing with Angry Customers and Growing ‘Alligator Skin’ with Gonzo Weaver

If there is one thing I find hard to deal with in this topsy turvy world of the auto repair business is the way some people will react when they are at the repair shop. It’s the way they conduct themselves at the shop when it comes time to get their car repaired. Over the years I’ve been praised, and degraded. I’ve been called a saint and I’ve been called the devil (or worse). I’ve heard the shouting and the stuff I probably wasn’t suppose to hear (walls don’t always block sound you know). After awhile you’ve heard it all before, and the attitudes that you see at the front desk become a part of the daily grind. Coping with all this is what I call; “growing alligator skin”. I try not to take things so personal, I’ll let the alligator skin handle it, and then take off my protective coat before I get back home to the wife and kids.

What gives with the need for such a thing as “alligator skin”? I believe there a several factors inherent to the automotive industry that brings on this crocodile coat of protection. Mistrust of the automotive repair world in general is what I believe is the number one factor; but what brings on that mistrust? Is it the incompetent mechanic? I doubt that is always the case. Is it the money out of their pockets which they were not expecting when they drove down the road to the repair shop? I believe it’s more in the hands of the unknowing consumer who reads and watches too many evening news reports on the unscrupulous business practices of the few out there that really are rip offs and not the normal operations of countless decent shops in this country. If you tie that into the other part of the equation it starts to make some

sense. What is that other part? The customer, their car, and what they do or don’t do with their family transportation. As I try to tell my customers; “Maintenance on a new car doesn’t do much to the value of the car or its current condition. It’s when it’s older and the miles are creeping up that all the previous maintenance pays off”. The inevitable degrading condition of the car doesn’t happen all at once, it takes time and miles for that to happen. And, sometimes some old failures will cause new failures to occur. “General Maintenance” isn’t a guy in the Army reserves, it’s something we all need to do. It is almost always overlooked, and a lot of times we will avoid or put it off, until it’s too late. That’s when the raised voices or mistrust starts at the service counter and that alligator skin becomes a necessity again.

Of course, there are always those TV scammers that will try to tell you they have the latest greatest product to aide in the diagnosing of your vehicle. Let’s not forget about the internet and the “wonderful” sources of information out there that the customer will no doubt inform you about when they show up with a complaint. I’m sure there are doctors, lawyers, and many other professional trades that know who’s the best and the worst in their field. We sometimes hear about those on the evening news, just not as often as the car repair business seems to be focused on. But cars are needed by everyone, no matter what the condition. Think about it, you may not need a lawyer tomorrow morning to get to work, but I’ll bet you’ll need your car. See Alligator Skin, Page 40

www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 39

Continued from Page 39

Alligator Skin

Educating the customer should start from the time they sign on the dotted line and purchase their vehicle. No recourse is given to educate the new owner on what needs to be done in the future with their new found horsepower. It’s up to the owner to deal with the maintenance issues and any repairs that come up. I personally have never bought a car and had the salesman walk over to me and mention, “Now you know, you’ll need to set some money aside for general maintenance and the usual break downs.” Without the needed “knowhow” the car is left to its own demise and the maintenance is left for another day. So, once you add up all these factors there is only one thing that is going to happen at the repair shop—a disgruntled owner with an issue about their car. Now we are back to the original problem, how do you deal with all of this? Start with a bit of Alligator skin, be prepared for the customer to tell you their life story about their car.

They’re going to tell you what they think no matter what you say or do. Let them get it out and keep your alligator skin intact. Stay calm, but professional. Most of the time, if you explain the diagnostic procedures and the results of the repair in terms that they can understand. Things will go a lot smoother. Sometimes I might have to go through it a few times but it’s worth the effort. So the key to this whole ordeal is to do a good job, be prepared to back up what you do with an explanation that can be understand by the typical driver. As long as you do that you can keep your wits about you and you won’t lose too much skin for your efforts. Keep in mind; it can be a little rough around the water’s edge. You may have to stand your ground and make your point known. Keep it as calm as possible and explain as best as possible. These issues usually don’t apply to the person who keeps up with their maintenance schedules or comes in on a regular basis. They understand the need and respect the work you do. It’s the ones that only show up when

their car has reached the water’s edge and can’t go an inch further without falling into the crocodile infested water. They will stammer around trying to find a way to get their car repaired without stepping off into the deep end and risk losing money, time, and their temper. We’ve all been there, and we can all understand the problems involved. Let’s not forget that explaining things can only go so far. You don’t want to have to resort to their tactics, that’s not good business. But, remember one thing, the customer is still dealing with an alligator, and they can bite back if they’re not careful.

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Polk Execs Speak about Aftermarket at AAPEX

Several Polk executives will provide aftermarket insight as part of the annual Automotive Aftermarket Products Expo (AAPEX) Nov. 1–3, 2011 in Las Vegas. Polk presentations will include Polk’s unique perspective and broad expertise in both the OEM and aftermarket segments of the industry. Tim Rogers, Polk president, will kick-off the annual AAIA Town Hall meeting with comments on five key trends Polk sees affecting the automotive aftermarket, Wed., Nov. 2 at 7 a.m. in the Venetian Hotel Ballroom. Other talks will beld that afternoon.

ALLDATA Training Center to Exhibit at AAPEX

ALLDATA has developed a new convenient training option for customers, the online ALLDATA Training Center. Launched in late August, over 400 customers have already taken advantage of this service. Demonstrations will be given in booth #3265 at the 2011 Automotive Aftermarket Products Expo (AAPEX), November 1-3, in Las Vegas. The Training Center is an interactive website where customers canlearn how to use ALLDATA products. Access is available 24/7.

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There is No Such Thing as a ‘Bad Decision’ in Business with Lee Amaradio Jr.

First let me say that there is no “right” answer to most of the challenges a collision owner faces today. Things that worked in the past will no longer cut it today and we need to constantly re-invent the wheel. I will give some examples of ways to cautiously move forward in today’s market. One example is advertising, in the past we would get a bigger yellow page ad, and maybe we would do newspaper and maybe some TV. In today’s market the consumer rarely picks up the phone book and newspaper sales are at an all time low, while TV is still questionable with DVR’s people can fast forward through your expensive 30-second commercial. Another example is purchasing equipment and your ROI. In the past a shop would buy a thirty thousand dollar frame rack or measuring system and they would be able to close a sale based on something they had that their

competitors didn’t. Today, repair standards and requirements to repair a collision have become so advanced that most decent collision facilities have the same equipment. So purchasing a large piece of equipment in today’s market most of the time offers “no” return on your investment.

Challenges Decision-making is the key to business success, and there is “no such thing as a bad decision.” As businessmen we decided to venture out on our own and start or purchase a business. No one gave us any guarantees or security blankets. We made the decision and went for it. I know I went for broke. No one stood behind me. I was on my own and I had to make decisions every moment that would set the direction of the future of my company. There was no road map then and there isn’t one now.

I have learned that when I make a decision I need to make it based on the information I have at the time. We don’t have a crystal ball to see the future but many of us tend to beat ourselves up when these decisions don’t pan out. I always remember this because, when I think back, I would normally make the exact same decision if I had the exact same information at the time. In other words, all else being equal, I wouldn’t change the decisions that I’ve made in the past. When we hire a new technician, for example, we check all their references and make sure they have all of the required training. Some turn out to be our worst nightmare. But that decision to hire someone was based on the information we had at the time. We needed someone and we hired them. We only know much later that it was the wrong person. Hiring was a good decision—but the wrong person may

have been hired. So, not making a decision is the only wrong decision here. We could never have known this tech was right or wrong unless we had ventured out and made a decision to hire them. All business challenges require decision-making—that’s our job— embrace it because its what we do. It’s who we are. Another name for a businessman should be “Master Decision Maker.” I say this because if someone asks me what my job description was I would say more than anything else its making decisions, and they are all good.

Changes In the past we made advertising decisions based on information we had then. The younger generation are all iPhone and internet savvy now and never pick up a phone book or newspaper so we are changing our advertising

www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 41

plans to accommodate this high-tech future generation. We just canceled our last phone book ad. We do more “Marketing” and leave less to chance and we are not really sure of our final destination but we do know the direction has changed. Will this be a good decision? ‘Yes,’ based on the information we have at the time (now). Similarly, we must continue to purchase major equipment (to keep up with vehicle technology), but we are no longer expecting a return on our investment. We treat it as a liability like a rent increase—something that we can’t do anything about but we need to deal with, and this forces us to run a leaner operation. In retrospect, I made a decision to expand my operation at the worst possible time, but when the decision was made it was based on the best information I had at the time. Many would say it was the wrong decision—who would expand in the middle of a recession? The answer is “no one,” not even “me,” but I didn’t know there was a recession when I expanded and, given the same set of circumstances, I would make the same decision again be-

cause it was a good decision. So remember there is no such thing as a “bad decision in business” because that’s what we do. ‘Not deciding’ is not an option. With this in mind, it may be time to go back to the drawing board and re-invent yourself. As the leader of your company take charge and make those tough decisions quickly and matter-of-factly based on the information you have at the time. Don’t look back and never second-guess yourself. Once you make a decision, move forward to the next decision—like firing that tech you now wish you hadn’t hired (because of the information you have now that you didn’t have before.) Think of yourself as a General leading your troops into battle. You need them to trust your decisions and follow you. No one wants to follow someone that is indecisive and insecure. If you don’t trust your own decision making, how can you expect anyone else to trust it and follow your lead? And quit beating yourself up (about events that turned out differently in hindsight)!

Women’s Industry Network Awards Two Scholarships to NACE

The Women’s Industry Network (WIN) awarded the group’s annual scholarship to attend NACE to the two top-placing female winners at SkillsUSA. This year’s recipients are Alexandra Domer, who placed eighth in the automotive refinishing technology category, and Elizabeth Moore, who placed 10th in the collision repair technology category. The WIN scholarship includes airfare, lodging and associated expenses, as well as a full access NACE Expo Pass provided by the Automotive Management Institute (AMI) and Automotive Service Association (ASA). Additionally, Domer and Moore were honored at the ASA sponsored industry awards ceremony on Oct. 6, and also will receive a 2012 WIN membership. After high school, Domer attended the Waubonsee Community College, where she earned two Associate Degrees in Applied Science, one in Automotive Body Repair and Automotive Technology. She graduated in the spring of 2011 and hopes to have her own collision repair facility one day.

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Moore graduated from Freedom High School in the spring of 2011, and is currently attending UTI in Houston. “The WIN NACE scholarship goes to the heart of WIN’s mission to support and encourage women who are entering the industry, particularly those in the technical ranks. Surrounded by our amazing WIN members, this scholarship has consistently been a wonderful way to introduce young women to the collision industry,” said Teresa Bolton, Director, Collision Repair Test Development, ASE who also serves as WIN’s Scholarship Co-Chair and Treasurer. For more information go to www.womensindustrynetwork.com.

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MSOs Share Insights During First-time Symposium at 2011 NACE chain in Texas, was asked what role social media plays in her company’s extensive marketing efforts. Bonner said she thinks it’s a stretch to think that people want to “socialize” with a collision repair shop, and that measuring return on an investment in social media is difficult given how infrequently the average driver needs a shop’s services. Still, she said, Facebook and Twitter are reasonable inexpensive ways to help build a brand and name awareness by helping promote, for example, Service King’s charitable efforts. Social media are how a growing percentage of the population may find your shop and understand your reputation, she said. “People want to do business not just with good-performing companies, but with companies they like,” Bonner said. “They want an emotional attachment to that company. Social media can help you develop that.” The panel was asked what, other than improved pricing, they expect from their vendors as they have grown as buyers. Rollie Benjamin, CEO of

by John Yoswick

More than 400 shops were represented on a panel discussion at this year’s 2011 International Autobody Congress & Exposition (NACE) – but only four chairs were needed on the stage. That’s because the four speakers were representatives of some of the largest multiple shop operations (MSOs) in the industry, which combined have more than 7,200 employees and annual sales topping $1.26 million.Ca The four were speaking at a new forum held for the first time at this year’s NACE in Orland, Fla., a daylong session aimed at (and open to) only MSOs. Much of the content of the panel discussions during the symposium, however, could have been equally of value to the single-location shop owner who wants to expand his or her business. During the “Lessons Learned From the Big Four” panel discussion, for example, Cathy Bonner, the president of the 47-shop Service King

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the 110-shop ABRA Auto Body & Glass chain, said his company focuses more on service than price when working with vendors. In terms of parts, for example, ABRA looks for vendors that can do more to help with cycle time by getting the right part to the shop at the right time. “We survey our people to score the vendors on what level of customer satisfaction they giving our managers running these shops,” Benjamin said. “We give a report card to the vendors.” Steve Grimshaw, CEO of the Caliber Collision Center chain, which operates 92 shops in four states, he considers what aspects of business that vendors excel in – and then looks for ways to put that expertise to work for Caliber. “Rental car companies are experts at customer service,” Grimshaw said. “I expect them to leverage that expertise to help me train my people how to be customer service experts. You have paint vendors who are experts on lean processes; I expect them to dedicate resources to help improve

our operations. There’s generally a lot of willingness on their behalf to dedicate resources to help us achieve our objectives. So it becomes more of a strategic relationship than a vendor relationship.” What are the MSOs looking for in terms of expanding into new markets or acquiring other collision repair businesses? Benjamin said his company operates company-owned shops in currently six major metropolitan areas, but 35 of its shops are franchise operations in mid-sized cities. Bonner said her company’s model is to operate large shops in high-visibility locations. The average Service King location, for example, has 13 direct repair programs – nearly twice that of most other MSOs – and does $5.4 million in annual sales. A good candidate for Service King acquisition, she said, may be familyowned like Service King, will have a similar culture, and will have room to perhaps double its sales from $250,000 to $500,000 a month. She said that although all of the See MSO Insights, Page 58

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A Profile of the Evolving Collision Repair Marketplace by Vincent Romans, Romans Group

A half decade has passed since we started tracking collision repair organizations that generate repair revenue of $20 million or greater annually. During these past five years we have seen a remarkable amount of change, not only within the collision repair and auto physical damage aftermarket industries, but also with our U.S. and world economies. July 2010 marked the “official” start of the recovery from the 2007 to 2009 recession, but it feels like a recovery in name only for many people. Our economy has been described by many economists and media pundits as being in a “soft patch.” A growing number of forecasters believe we are at risk of a double-dip recession due to the sluggish economy and a broad spectrum of increasing dynamic, complex U.S. macroeconomic and global downdraft variables that continue to influence fundamental structural change within our business, financial and government institutions with some currently identifiable and still

indeterminable impact on the collision repair, property and casualty insurance, and OEM and aftermarket auto physical damage segments. Who will lead the collision repair industry and how those leadership companies will influence the collision repair, property and casualty insurance and related auto physical damage business segments is an evolving story that is playing out at this very moment. This evolving story can be summarized by viewing it as part of a long-term continuum involving three simultaneously active industry changing phases: Contraction, Consolidation and Convergence. We have seen both long-term historical and real time contraction within the auto repair and affiliated industries. Collision repair industry contraction is due to an increasing number of complex dynamic macroeconomic and industry-related variables including, but not limited to: ● Continued overcapacity and fragmentation ● The persistently weak U.S. economy’s impact on consumer attitudes, confidence and spending habits

● The multitude of fluctuating and conflicting trends affecting collision frequency, the number of accidents and vehicle repairs ● Proliferation of vehicle accident avoidance and safety technology ● Safer drivers due to aging population, insurance company auto policy premium discount programs based on good driver/vehicle monitoring technology, accident and incident-free driver experiences, graduated teenage driver training programs, and fewer alcohol-related accidents ● The changing profile of businessto-business relationships and their interdependencies and partnership expectations on how business is and will be conducted in the future ● Globalization This contraction stimulates and accelerates market share land grab, which in turn increases the likelihood of further consolidation, which then plays out through merger and acquisition expansion. The contraction and consolidation phases open the door to a convergence of businesses across different

and similar business segments. These companies combine and integrate their organizations’ strategic interests and competencies to win and further succeed through leadership, innovation, technology, market share gains, competitive positioning, and business execution. Following are examples of convergence among some key auto physical damage segments. This type of convergence includes clear examples of merger and acquisition activity, globalization and the integration of merged technology platforms among different business segments that will continue to alter and change the landscape for the collision repair industry and related auto physical damage business segments. ♦ P & C Insurance ▪ Mapfre Insurance acquires Commerce Insurance ▪Liberty Mutual acquires Ohio Casualty and Safeco ▪ AIG acquires 21st Insurance ▪ Farmers acquires AIG/21st Century ▪ QBE Insurance - acquires Balboa In-

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surance ▪ Allstate announces Esurance acquisition ▪ Nationwide announces acquisition of Harleysville Insurance

♦ Collision Repair ▪ Boyd Group acquires True2Form ▪ Boyd Group acquires Cars Collision ▪ Service King acquires Alamo Collision ▪ Service King acquires B&B Body and Paint ♦ Paint, Body and Equipment ▪ Uni-Select acquires Finish Master

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collision repair industry is heading and what does its future look like. Since perception frequently influences reality, one guess is as good as another. However, one way that question can be answered is by following the actual numbers and by tracking the trends. This white paper provides that information for the growing $20 million-plus collision repair organization segment. We are now beginning to develop insight and understanding into another important and evolving collision repair segment that includes operators processing $10M to $20M annually. Our profile of $20 million multiple-location collision repair operators (MLOs) continues to include: ● Independent, dealership and insurance company-owned and managed collision repair operators processing $20 million or more annually within the U.S. market ● Operators with one or more locations in single or multiple geographic markets within the United States ● Professionally-managed operators providing performance-based, brandrecognized and competitively-differentiated collision repair services

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● Companies focused on achieving top-tier performance results, high customer satisfaction, and consistent and sustainable quality repairs ● Businesses that tend to pursue multiple customer segments for collision repair revenue including property and casualty insurance, automotive dealer, accident management, rental car, and direct-pay consumers We believe that the $20 million-plus and the $10 to $20 million collision repair segments will continue to grow their share relatively faster than other segments of the collision repair market. This growth will be driven by a number of variables. ● The segment’s local and multi-market footprint which offers greater consumer and insurance company choice Multi-level selling and marketing for insurer choice brand preference with access to insurance company direct repair claims ● Ongoing operational improvement resulting in increased vehicle repair quality, daily throughput and reduced cycle time ● Business service differentiation and market segmentation ● Market leadership through sustain-

able top-tier competitive performance results ● Expanded business hours of operation including multiple daily shifts, hybrid work shifts and weekends Single point of contact with operational conformity and predictable repair quality and performance outcomes ● Access to capital for business and market growth, expansion and infrastructure development ● An integrated sales and marketing approach to capturing consumer, insurance, rental, and fleet business through brand recognition, reputation, performance, and multi-level insurance company focused selling and marketing ● Mergers and acquisitions Examples of this type of accelerated growth and expansion is Boyd Group’s 2010 mid-year acquisition of True2Form’s multiple-location, multimarket business which had 37 locations and $71.0 M in annual revenue at the time of acquisition and their June 2011 acquisition of Cars Collision. With the Cars acquisition, Boyd’s U.S. business increased its lo-

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cations by another 28 repair facilities for a total, of 164 locations in North America, 127 located in 13 U.S. markets. This expanded Boyd’s network reach and operating platform and is seen as being advantageous by a number of insurance companies. These types of acquisitions and mergers will continue to influence the consolidation and right-sizing of the collision repair industry as well as increase the MLO market share in the U.S. The $20 million MLO collision repair profile used for this analysis excludes repair facilities that focus exclusively or primarily on expedited paint and cosmollision, small dent, glass repair only, mechanical only, and collision repair related primarily to auction vehicles. We do recognize that within this segment some companies continue to be in various stages of strategic growth, transformation and transition to business models approaching that of an insurance company DRP wholesale or diversified customer segment platform. Portions of this report include a specific segment of collision repair conversion and multi-segment customer-focused franchisors which we

refer to as multiple-location networks (MLNs). The MLNs included are Maaco, CARSTAR, ABRA franchising, and Fix Auto, currently a hybrid model which includes both a franchise and non-franchise brand banner network model. These organizations represent a significant market segment of the collision repair industry that we believe warrants continued tracking and monitoring. We recognize that there are various types of multiple-location networks that are not currently included here such as integrated and outsourced auto physical damage and glass networks like LYNX APD and the Innovation Group, buying networks such as Assured Performance, accident management providers such as CEI, and peer performance groups like The Everest Partners.

Key findings of our 2010 $20M MLO discovery, research and analysis include: ● The 56 $20 million MLO organizations process 10.8 percent of the $31.0 billion in collision repair revenue nationally representing $3,350 million, up from 9.1 percent in 2006.

● Within the top ten $20 million MLOs, five are independent and five are dealer groups. These top ten organizations account for 44.9 percent of all $20 million MLO production locations and 53.3 percent of all $20 million MLO revenue. ● $ 20 million MLOs have 2.9 percent of the 37,700 locations and 10.8 percent of the revenue. ● On average, the $20 million MLOs process $3.1 million per location, over four times more than the average annual revenue for non-MLO repairers of $754,949. ● Revenue for the top ten independent and dealership MLOs was $1.8 billion, an increase of $495 million over 2006’s revenue of $1.3 billion ● Our early research on the $10 to $20 million collision repair segment indicates that there are roughly 1,000 to 1,200 independent and dealer-owned collision repair businesses representing approximately 3,000 to 4,500 shops that process between $4.0 billion and $5.0 billion in revenue. When combined with our 2010 findings for the $20 million MLOs, these two segments represent a range of revenue being processed of $7.5 to $8.5 billion

through approximately 4,100 to 5,600 repair facilities. ● Training does matter for collision repairers when maintaining and expanding the scale of their business. Our research and collaboration with ICAR indicates that over 90% of the 56 MLOs have and maintain the I-CAR Gold Class Professional designation. Many of these organizations also have or are working toward increasing the number of Platinum technician designations within their employee ranks. There continues to be a wide range of opinions, anecdotal information and various government and private sector data reporting on and determining a meaningful and relevant collision repair market size. This is especially true in light of the aftermath of our last recession, the current weak economy, and the macroeconomic conditions which have influenced the accelerated loss of both dealership and independent collision repair operators in 2009 and 2010. Based on our longitudinal research and analysis involving published third-party industry sources, property and casualty insurance and See Evolving Marketplace, Page 50

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Caliber

force—all of which will support the company’s growth throughout the United States, said Grimshaw. “Our move to Lewisville provides us with an opportunity to consolidate much of our management which is currently spread across a number of locations in California and Texas,” said Grimshaw. Grimshaw also said the relocation does not indicate any change in the company’s approach to current or future markets. “Our first priority is to ensure we have sufficient coverage in our existing markets for our clients and customers. We also look to seek

new geographic growth opportunities in states contiguous to California and Texas, such as Nevada and Arizona, and finally other markets based on our client’s needs.” The planned move is aimed at supporting the company’s general focus on growth; Grimshaw said, “As we continue our strategic growth plans over the next five years, the move will allow us to consolidate the back end operaMichael Quinn tions more efficiently with future large acquisitions.” Grimshaw said that almost all employees currently working at the Irvine, CA headquarters were offered

their same positions in the new Texas location, and any associates that are not moving are still working with Caliber to ensure a smooth transition. The MSO, operator of several collision repair facilities in California and Texas, also announced on October 5 it has signed an agreement to acquire 911 Collision Centers; confirming suspicions of the merger within the industry. Recognized as one of the premier collision repair companies in the southwest, 911 Collision Centers has seven locations including four locations in Tucson, Arizona, one location in Scottsdale, Arizona and two locations in Las Vegas, Nevada. Steve Grimshaw, Caliber Collision Centers’ Chief Executive Officer

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announced, “Our acquisition of 911 Collision Centers sets a new cornerstone in Caliber’s continued expansion plans. After spending time with 911’s management team, it quickly became apparent that 911 Collision Centers provides Caliber with the perfect opportunity to enter the Arizona and Nevada markets behind a well-established, high quality brand.” “Partnering with Caliber Collision Centers will allow us to grow exponentially over the foreseeable future while sharing corporate best practices and operational efficiencies across the Arizona, Nevada, Texas and California markets” said Michael Quinn, Chief Executive Officer of 911 Collision Centers. This is Caliber Collision Centers first expansion into locations outside California and Texas and increases the company’s total number of locations from 84 to 91. Caliber Collision Centers is now one of the largest collision repair companies in America with 91 I-CAR Gold Class Professional certified collision repair centers throughout California, Nevada, Arizona and Texas. For more information about Caliber Collision Centers please see www.calibercollision.com.

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mate of damage or payment under the applicable policy, and any claim or coverage denial, claim handling or trade practice as the result of same,” the settlement continued. Ray Gunder stated further; “we’ve been sharing our legal journey with the collision repair industry and we’ll continue to do so in the hopes our successes will encourage others to consider their legal options. Meanwhile, we’ll continue to ‘Pound the Rock!’”

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Evolving Marketplace

government sources, primary and secondary research, and industry “knowledgeable and experienced,”

Source: The Romans Group LLC

professionals, we continue to ascertain that there is no one certain number that is universally recognized or accepted as being the “correct” number of collision repairers in the U.S. today. Our estimated U.S. market size for the number of collision repairers through year end 2010 is 37,700. This estimate

continues to reflect the long-term decline which began in the late 1980s. As seen in the chart below, the number of independent and dealership collision repair facilities in the U.S. has declined by 53 percent over the past 30 years. Since 2006, we see a reduction of approximately 7,300 independent and dealeroperated collision repair facilities within the United States, a 16 percent decline. Over the next decade, we believe that greater market share will continue to shift to the $20M plus MLOs, the $10 to $20M MLOs, and MLNs. Their focus will be on growthoriented strategies which deliver high-

50 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com

quality and consistent repair performance, have strong insurance and consumer brand recognition and reputation, and adapt quickly to market, consumer, and insurance needs through innovative solutions, technology and services. This market share shift will move the industry toward a less fragmented and capacity-normalized model. Using our best-efforts approach in sizing the collision repair insurance and consumer-paid auto repair claims market size, insurance-paid repairable

Source: The Romans Group LLC

claims expenditures for 2010 rose slightly to $28.3 billion from $27.7 billion in 2009. Consumer-paid claims

were relatively stable at $2.7 billion. We estimate that the combined insurance and consumer-paid claims for repairable vehicles for 2010 was approximately $31.0 billion. The total number of collision repairers within the United States continues to have value as the traditional data point for calculating market share. Repairers who operate and integrate within their business collision damage estimating and shop management systems while leveraging other claims processing and management software such as auditing, capacity utilization, scheduling and key performance metrics analysis will be the collision repair providers last standing and preferred by insurance and other claims production companies. Our analysis of MLO production market share includes three primary market definitions: the total number of collision repairers, total estimating systems and See Evolving Marketplace, Page 52

AAIA ‘Shop of Tomorrow’ Vehicle Service at AAPEX

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U.S. Deer-Vehicle Collisions Fall 7 Percent

For the third consecutive year, the number of deer-vehicle collisions in the U.S. has dropped, according to a study done by State Farm Insurance. And the downturn is accelerating. The percentage decline over the last year is nearly three times as large as during the previous two years combined. Using its claims data, State Farm® estimates 1.09 million collisions between deer and vehicles occurred in the U.S. between July 1, 2010 and June 30, 2011. That’s 9 percent less than three years ago and 7 percent fewer than one year ago. Among those states in which at least 2,000 deer-vehicle colli-

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sions occur per year, Vermont (24 percent), Michigan (23 percent), West Virginia (22 percent) and Connecticut (22 percent) experienced the largest one-year percentage declines. There were 23,000 fewer deer-vehicle altercations in Michigan alone. Michigan is second on the list of states with the highest total number of these collisions (78,304), well behind Pennsylvania (101,299). For the fifth year in a row, West Virginia tops the list of states where an individual driver is most likely to run in to a deer. Iowa remains second on the list. Deervehicle collisions are least likely in Hawaii.

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www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 51

collision repair revenue. Evolving Marketplace The National Automobile Dealers management system software users. Association, NADA, Values for these market size data estimates that 5,841 points are represented in the following dealers processed chart. $6.4 billion in repair Our summary findings concluded revenue in 2010 verthat in 2010 there were 56 independ- sus $6.6 billion in ent and dealership collision repair $20 2009. The balance of million MLOs processing over $3.3 $24.6 billion is being billion annually through 973 producprocessed by aption locations. proximately 31,859 We attempted to identify nonindependent colliproduction estimating and drop-off lo- sion repair locations. cations and base our market share on On average, the $20 production locations only. While these million MLOs $20 million MLOs represent 2.9 perprocess $3.1 million per location, over cent of the estimated 37,700 collision four times more than the average anrepair facilities nationally, they nual revenue for non-MLO repairers process 10.8 percent of the $31.0 bilof $754,949. There are many smaller lion in insurance and customer-pay independent and dealer non-MLO repairers that achieve greater-than-theindustry average annual revenue, especially those who represent and operate in the $10.0 million 1 May have more than one installation per location. Includes both to $20.0 million segcommunicating and non-communicating systems. 2 ment. Assumes one per location Continued from Page 50

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While this paper is focused on independent and dealership multiple-location operators, we think it is important to recognize the continued interest in other collision repair models which we identify as multiple-location networks or MLNs. These MLNs are growing competitively with their service offerings, insurance-preferred value proposition, and market influence. When combined, their market share for vehicle repairs processed and their local, regional and national

footprint become relevant. We have included ABRA, CARSTAR and Maaco, all franchising organizations, and Fix Auto USA, a hybrid franchisor and brand banner network, as part of our multiple-location network segment for 2010. Together they represent a total of 884 locations repairing approximately $1.3 billion in vehicle revenue. We see interest on the part of collision repairers to investigate and consider the benefits of multiple-location franchisor and banner networks. The independent-brand model, historically believed by many repairers to be the most desirable way to successfully maintain and grow their business, may now be seen by a growing number of collision repair providers as possibly more risky than being associated with an MLO or MLN, especially in light of current macroeconomic, market and competitive conditions. Some repairers see the opportunity to adopt and integrate MLN member benefits as a potentially better way to sustain and grow their business through: ● Leveraging the MLN value propoSee Evolving Marketplace, Page 54

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www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 53

Continued from Page 52

Evolving Marketplace

sition, brand association, multi-segment customer reach, multi-level sales

and marketing, and insurance company business affiliation ● Franchisee performance tools for business and customer analysis, benchmarking and peer ranking ● Personnel, operational and general business training and development ● Standardized processes and procedures

● Utilization and integration of a technology platform ● DRP insurance relationships and business considerations not previously available as an independent operator ● Expense reduction through largescale supply chain management and procurement Our regional location market representation for these $20 million MLOs is highest in the Southeast at 25.2 percent. In 2008 the West was the dominant region with a 25.4 percent share; it now represents 22.9 percent of the market. The lowest $20 million MLO representation continues to be in the Northeast at 6.1 percent which is down 4.3 percentage points from their 2006 share of 10.4 percent. Another way to view regional representation is to assess the geographic reach of the $20 million MLO organizations. Do they tend to contain

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themselves in a relatively small area or do they expand their influence across many states? ● Of the 56 $20 million MLO organizations, 31 do business in only one state. Of those 31 organizations, 25 are independents and 6 are dealers. ●Within the top ten rankings, only two independent and three dealer MLO organizations strategically position themselves in only one state. The West has the highest number of MLOs with at least one location in that region, 26 MLOs are represented

Within the top ten $20 million MLOs, five are independent and five are dealer groups. These ten organizations account for 44.9 percent of all $20 million MLO production locations and 53.3 percent of all $20 million MLO revenue. These top ten MLOs display trends similar to the total $20 million MLO group; higher

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which represents 46.4 percent of MLOs. The companies represented within the top ten MLO organizations have not substantially changed since 2006 and have only lost one member. While their share of all collision repair locations has been relatively constant, revenue among this group had been increasing year over year in total as well as per location.

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revenue produced through fewer production locations.

Smaller and non-MLO repairers, those with total collision repair revenue below $20 million annually, vary widely in claims processed per location. For the top ten independent $20 million MLOs, the average repair revenue per location significantly surpasses that of their smaller and nonMLO counterparts at $3.0 million versus $740,619, over four times more average revenue per location. Top ten dealer $20 million MLO performance also exceeds their smaller and nonMLO counterparts at a repairsprocessed average of $3.9 million per location versus $964,691 per location for smaller and non-MLO dealer repairers; four times more revenue per location. The trend for both the independent and dealer groups is toward higher revenue per location in both the MLO and non-MLO segments. Comparing the top ten independent and dealer group $20 million MLOs, the independents have 69 percent more locations producing 27 percent more revenue than dealer repair organizations. However, in 2010 the top ten dealer repairers manage $3.9 million in average revenue per location versus $3.0 million per location

for independent organizations. Within the top ten independent $20 million MLO group, the ranking has remained fairly consistent over the past four years. The total number of production locations has increased along with their representative share of all $20 million MLO locations to 40.7 percent from 40.5 percent in 2006. This group’s share of all $20 million MLO revenue has increased to 39.7 percent, up 5.7 percentage points from 34.0 percent in 2006. The trend in the number of dealerships operating collision repair facilities has continued to decline since 2006 when 41 percent had repair locations down to 33 percent in 2010.

Source: NADA, The Romans Group LLC

has dropped significantly from a high of 52 percent to a low of 33 percent in 2010, a 19 point drop over 16 years.

Source: NADA Industry Analysis Division

Looking at the dealership share of the collision repair marketplace, and according to NADA, revenue derived from collision repair work performed by dealerships declined to $6.4 billion in 2010, down nearly 33% percent from $9.5 billion in 2007. During the past 22 years, dealerships had seen their collision repair

Source: NADA, The Romans Group LLC

Both the number of new car dealerships and the number of dealers operating collision repair facilities declined significantly since 2006. Using NADA’s reported total of 17,700 dealers at the end of 2010, this represents an estimated 5,841 dealeroperated collision repair facilities, a decline of 32.8 percent or 2,851 fewer dealer collision repair operators from 2006 when there were 8,692 dealers operating collision repair facilities. As can be seen in the following chart, the number of dealerships operating on-site body shops since 1994

Source: NADA, The Romans Group LLC

revenue increase steadily until around 2005 when the industry’s total sales dollars began to decline to what are now levels equal to 1998. The revenue decline has started to tapered off since

2008. There was a 4.1 percent decline in the number of new car dealerships from year-end 2009 to year-end 2010, along with a 10.3 percent decline in the number of dealerships offering collision repair services. The significant decline in the number of dealerships in 2009 slowed in 2010. About 1,550 dealerships closed in 2009 and 760 closed in 2010, leaving the dealership count at 17,700, a drop of 4.1 percent. Within the top ten dealer group, there has been some minor shifting. For those dealers, average revenue per location has increased over the past year by $500,000, a considerable swing from the $300,000 decline in 2009. We expect that the evolving collision repair landscape will be the result of a number of industry-specific and macro-economic conditions likely causing a continuation of collision repairers exiting the business, MLO mergers and acquisitions, market share growth and expansion, and innovative partnerships and strategic alliances. Some of the prevailing conditions include: ● Insurance companies working with a more limited number of single and multiplelocation operators ○ DRP claims conversion is expected to increase over the next five years ○ Performance management results will drive DRP claims utilization and influence to top-tier collision repair performers ○ DRPs and preferred provider programs are influencing larger repair volumes to emerging end-game winners ○ Insurance companies increased adoption of the multiple-operator business model and single point of contact ● Fluctuating and conflicting trends affecting accident frequency and the

www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 55

number of repairable claims. The negative impact of the current macroeconomic and business conditions and their influence on collision repairers remaining in business or de-

Source: NADA Industry Analysis Division

ciding to exit their business ● Acceleration of aggressive repairer selling, marketing and branding of their competitive value propositions and performance to current and prospective wholesale and consumer S segments ● Development, marketing and implementation of new and innovative services that many repairers will not have the ability or the inclination to

pursue with their customer base ● Lean production and its business benefits leading to competitive advantage and long-term business sustainability for some repairers compared to their competition ● Hybrid claims management and process models that not all repairers are willing or able to accept, adopt or maintain ● Insurers co-managing with repairers a growing number of their insured’s collision repairs through direct repair programs. ● Innovative, risk-taking repairers will move toward a self-managed vehicle repair model which will require less insurance company oversight, involvement and disintermediation. ● Technology and its affect on the evolution and movement toward an integrated electronic claims processing model ● Continued contraction, consolidation and convergence of all industries associated with and including collision repair ● Globalization and the potential U.S.

market entry of foreign companies in the collision repair, property and casualty insurance and auto physical damage industries The good news is that there is still much opportunity within the collision repair industry for those who adapt to the changing conditions and leverage their business, market, financial, and strategic competencies and capabilities for growth and future success. For further information, contact Vincent J. Romans or Mary Jane Kurowski of The Romans Group at

vincent@romans-group.com, maryjane@romans-group.com or visit www.romans-group.com.

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Continued from Page 44

MSO Insights

17 shops Service King has added this year have been in Texas, the company is interested in expanding into other states. “My father used to tell me you can plan your work, but don’t plan on it working out,” Bonner added as a caveat. “It is important to plan, but in terms of growth and decisions about acquisitions, you have to have adaptability as well.” Grimshaw said reputation within a market is critical when considering businesses to acquire. “If you think you’re going to buy a (shop) that wasn’t performing well and that when you put your name on the sign, all will be forgiven, that’s being a bit naïve,” Grimshaw said. “It takes a long time and you have to mend a lot of fences to reestablish a reputation.” The panel was asked to comment on a proposition, espoused by an insurer in the United Kingdom, that business often “trip over themselves” trying to exceed customer expecta-

tions when they would be better off just ensuring they consistently meet those expectations every time. Brock Bulbuck, CEO of The Boyd Group, a Canadian-based firm that also operates 128 shops in the United States (many under the True2Form and Gerber tradenames) said the problem with that concept is that customer expectations keep rising. “If you don’t strive to wow and exceed and set the bar as high as you can, I think you run the risk of establishing a culture in your organization where just doing your job is good enough,” Bulbuck said. “I don’t think that’s conducive to create promoters (among customers) and growing your business.” Grimshaw, too, said exceeding expectations is the key to differentiating your business from the competition. But Bonner said there is some logic in what the U.K. insurer was espousing. “I think in collision repair, the primary customer is insurance, and if you don’t exceed their expectations, you will not be rewarded with

growth,” she said. “The secondary customer is the traditional retail customer. I think it’s true that you don’t have to exceed their expectations; you just have to satisfy them. That’s what we’re rewarded on by the primary customer, the insurance companies, whether we have satisfied those customers and given them great service.” As the panel discussion ended, Bulbuck said he’s interested in seeing other MSOs succeed because it demonstrates the success of the business model overall. “I truly believe the success of everyone in this room is dependent upon the collective success of the MSO sector,” Bulbuck said. “So my advice is a bit self-serving: Never put your business at risk, never bet the farm, either operationally or financially.” The MSO symposium was a new event at what was the first NACE held outside of Las Vegas in seven years. NACE organizers said the return to what will likely be a 3-city rotation (Orlando, New Orleans and Las Vegas) appears to have paid off; reported attendance at this year’s event (more than 18,000 people) was up 15

percent over 2010. About 40 percent of those who pre-registered indicated they were first-time attendees. Next year’s event will be held October 10-13 in New Orleans, and organizers say the success of this year’s MSO symposium will result in a similar session being held next year. While it will continue to be open only to MSOs, organizers point out that NACE includes nearly 90 other training sessions that have no such restriction on attendance.

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Allstate and Progressive Agree to Settle Patent Litigation

Allstate Insurance Co., Allstate Fire & Casualty Insurance Co. and Progressive Casualty Insurance Co. announced they reached a settlement agreement over litigation involving technology patents and questions of trademark infringement. In the suit, Progressive alleged that Allstate infringed on its usagebased car insurance and online insurance policy servicing technology. Progressive also alleged trademark infringement. The companies entered into a trademark co-existence agreement involving the Drive and DriveWise trademarks. They also cross-licensed certain patent rights with each other. “This was about protecting and leveraging Progressive’s investment of more than 15 years in usage-based insurance research, development, testing and piloting,” Chuck Jarrett, Progressive’s chief legal officer, said. “We have always said we are willing to license our intellectual property rights to others and that we will enforce those rights when necessary.”Allstate said: “Although confident in the merits of its case, Allstate is pleased to be able to leverage its patent portfolio in this settlement by providing a license to Progressive and to eliminate the distraction from this litigation.”

Florida and Michigan AAA Clubs Join Forces, Now 2nd Largest

Two AAA clubs have combined operations to become the second largest AAA club in North America. AAAAuto Club South, based in Tampa, Fla., affiliated and combined with The Auto Club Group based in Dearborn, Mich., effective Oct. 1. The new enterprise, known as The Auto Club Group, now serves members and customers across 11 states and two U.S. territories. They are: Florida, Georgia, Iowa, Michigan, Nebraska, North Dakota, Wisconsin, Puerto Rico and the U.S. Virgin Islands. The group also serves most of Illinois, Minnesota and Tennessee, as well as a portion of Indiana. The new organization provides membership, travel, insurance and financial services to more than 8.4 million members through about 300 office locations. It is maintaining corporate headquarters in both Dearborn and Tampa. Robert Sharp, chair of the former Auto Club South board, is now chairman of the board of The Auto Club Group. Charles Podowski continues as CEO, and John Tomlin, former Auto Club South CEO, is chief operating officer. The Auto Club Group will provide access to a broader array of insurance products and services in the former Auto Club South region.

Mitchell Partners with Enterprise Rent-A-Car, Integrates with Update Promise.com to Deliver Services via RepairCenter™

Mitchell has announced a partnership with Enterprise Rent-A-Car. Under the terms of the agreement, Mitchell will directly integrate Enterprise Rent-ACar services into both its auto repair management software and insurance claims management software solutions, RepairCenter™ and WorkCenter™, by automating and simplifying the end-to-end vehicle rental workflow for insurance carriers. Planned for early 2012, the integration simplifies the rental process by eliminating manual updates and “middleman” communication between the insurer, body shop, rental agency and consumer. When a repair is delayed, an automatic notification can be sent from RepairCenter’s shop management system directly to WorkCenter insurance users or to the Enterprise representative to let them know they need to perform a rental task. Representatives and claims handlers will be able to send rental requests, extend rentals and receive rental updates. Paul Rosenstein, Mitchell’s Vice President of Claims Solutions, said “Partnerships with respected industry leaders like Enterprise Rent-A-Car are a part of our commitment to simplify and optimize complex claims and busi-

ness environments, ultimately creating an exceptional customer experience at every stage of the claims process.” Dave Smith, Vice President Strategic Solutions Sales, for Enterprise Rent-A-Car, said, “This is a significant opportunity for insurers to speed up automotive claims processing and increase customer satisfaction. In addition, direct integration of Enterprise Rent-A-Car into Mitchell’s solutions empowers small insurers to gain access to rental integration without having to build it themselves.” Separately, Mitchell has also teamed with UpdatePromise.com™ to enhance its RepairCenter™ auto repair shop software with proactive repair status updates. UpdatePromise is a Web-based service provider that delivers automated repair status updates to collision customers via text message and e-mail. This allows body shop users to manage delivery date promises, repair status updates, and customer responses from within the RepairCenter body shop software workspace. The widespread use of text messaging gives auto repair shops an improved option to communicate and connect with their customers in a consistent, proactive way.

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www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 59

Virginia Branded Title for Water Damage Settles at $2500

Jordan Hendler, executive director of the Washington Metropolitan Auto Body Association, said a Virginia state legislator whose vehicle was totaled after the sunroof of his vehicle was left open in a rainstorm was a proponent this year of legislation to raise the threshold of damage requiring a flooddamaged vehicle to receive a branded title from $1,000 to $5,000. Advocates for increasing the bar said that the fourdecade-old limit was unfair, especially because of inflation and rising sticker prices. They argued that the higher level would help consumers at resale as well as used-car dealers that don’t want a vehicle branded because of $1,000 of damage to a luxury car’s sunroof or leather seats. Hendler said WMABA tried to point out that today’s vehicles have far more electronics than cars had decades ago, and that no consumer should unknowingly buy a vehicle that has had thousands of dollars in water damage. The threshold was raised to $2,500, down from the $3500 proposed. The Virginia water damage threshold had been unchanged since 1966. Only Virginia, Washington, D.C., and Hawaii set thresholds—all at $1,000—on water damage allowed before a vehicle’s title is branded.

IRS Offers Employers Tax Relief if Workers Reclassified

The IRS has launched a new program that will enable many employers to resolve past worker classification issues and achieve certainty under the tax law at a low cost by voluntarily reclassifying their workers. The new program will allow employers to get into compliance by making a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit. The IRS says under the Voluntary Worker Classification Settlement Program companies will owe about 1 percent of wages paid to reclassified workers in the past year, with no interest or penalties due. The program is part of a larger “Fresh Start” initiative at the IRS to help taxpayers and businesses address their tax responsibilities. The program will allow businesses that have been improperly labeling their employees as independent contractors to reclassify workers and make only a small payment to cover past payroll taxes. To be eligible, a company must have consistently treated the workers as non-employees; have filed required 1099 tax forms for the past 3 years; and not be under a worker classification audit. Part of the program will be increased vigilance about misclassification of workers in the future.

NABC Nominees for 2012 Board of Directors Announced

The National Auto Body Council (NABC) hasclosed nominations for the seven 2012 board positions coming open at the end of this year’s term. Every nominated individual has expressed their interest and desire to work for the NABC board. They were offered the opportunity to participate in the discussions and approval of the NABC’s new mission and vision statements, as well. The candidates are listed in their order of nomination: Keith Bell, Akzo Nobel; Stacy Bartnik, CARSTAR; Kenneth Seavey, Hertz First Edition; Mike Jordan, Manchester Collision; Karen Fierst; Fred Iantorno; Jon Faris, Enterprise Car Rental; Kristen Felder, Collision Hub; Elizabeth Stein, Fix Auto; David Niestroy, 3D Body Works; Richard Perry, Chief Auto Technologies; Mark Lovell, Precision Collision. Based on NABC bylaws, an official ballot will be sent to all NABC members for their consideration. The actual election will take place at the NABC annual meeting to be held in the Hilton Hotel in Las Vegas on Tuesday, November 1, 2011 at 12:30 p.m. concurrent with the SEMA Show. Only Individual members in attendance or their designated representative can participate in the vote.

DuPont Exhibit at SEMA Show Live Paint Demonstrations

DuPont Custom Finishes (DuPont) will participate at the annual Specialty Equipment Market Association (SEMA) tradeshow in Las Vegas, Nov. 1–4. DuPont Custom Finishes, exhibiting in booth #22789 in Hot Rod Alley, Central Hall, will feature DuPont™ Cromax® Pro, Chroma Premier® and Hot Hues™ custom paint products. Industry airbrush and pinstripe artists will be showcasing their skills with live demonstrations in the booth using DuPont™ Cromax® Pro waterborne products. Vehicles on display in the booth will include a 2012 DuPont Calendar winning ‘61 Chevy Impala, owned by Tim Brown of Jacksonville, Fla.; a ‘71 Challenger owned by Bob and Karon Zeitler and painted by John Riehn of John’s Autobody and Paint. Imperial, Mo.; and a ‘50 Fleetline built by Tim Strange, owner of Strange Motion Rod & Custom Construction and host of PowerBlock TV series “Search & Restore.” Strange will make appearances to sign autographs in the booth 10 am–12 pm on Wednesday, Nov. 2 and 1–3 pm on Thursday, Nov. 3. More information about DuPont’s paint products is available at www.pc.dupont .com or phone 1-800-GET-DUPONT.

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Nationwide Insurance Buys Harleysville Group

Despite Poor Economy, Auto Sales Remain Strong

U.S. auto sales are continuing to slowly recover, says Ford Motor Co. analyst George Pipas. He says September auto sales are better than August at SAAR levels, and will probably be the best sales month we've seen since April. Pipas doesn't expect sales to drop off much throughout the rest of the year, saying we may not see any drops at all. Incentives are always a possibility, of course, but Pipas doesn't see bigger discounts around the corner just yet.

Nationwide Mutual Insurance says it will acquire Harleysville Group, Inc., for $760 million in cash. Harleysville Insurance has operations in 32 states and the acquisition will give Nationwide a greater presence in the Northeast and Mid-Atlantic states, where Harleysville's business (75 percent of which is commercial insurance) is concentrated. The growth also may help Nationwide, the eighth-largest personal auto insurer in the U.S., catch up to USAA in terms of total premiums.

Houston Auto Body Assn Says Tell TX DOI Your Labor Rates

The Houston Auto Body Association recently had a shop labor rate survey conducted by an independent third-party. It is now urging shops to notify state insurance regulators if an insurer is unwilling to pay the shop's posted labor rate by taking a photo of the posted rate and emailing it along with the estimate at the lower rate (with customer and claim information omitted) to the Texas DOI. "Right now they're just collecting those and we're laying the groundwork," said James Brown of HABA.

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Title: I-CAR: Plastic and Composite Repair (PLA03) / Where: Las Vegas Convention Center, N231-242 / I-CAR, the Inter-Industry Conference on Auto Collision Repair, 2011 SEMA ShowI-CAR, the Inter-Industry Conference on Auto Collision Repair, is returning to the SEMA Show in 2011 with I-CAR training available to attendees each day of the SEMA Show

Title: I-CAR: Exterior Panel Damage Analysis (DAM10) / Where: Las Vegas Convention Center, N231-242

Tuesday / 12:30pm

Title: SCRS Repairer Driven Education: Having Your Cake and Eating it Too: Marketing Practices / Repairer Driven Education, RDE, SCRS, 2011 SEMA ShowSCRS REPAIRER DRIVEN EDUCATION (RDE) series will feature seminar offerings Title: SCRS Repairer Driven Education: Load Leveling – The Hidden Enabler for Shop Performance

Title: SCRS Repairer Driven Education: Understanding Design Based Repairs

Tuesday / 3pm

Title: SCRS Repairer Driven Education: Economic Pricing Considerations for the Collision Industry in 2012 Title: SCRS Repairer Driven Education: You Don’t Know What You Don’t Know - How New Auto Regulations Impact the Body Shop

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November 2 Wednesday / 8am

Title: I-CAR: Restraint Systems Damage Analysis (DAM11) / Where: Las Vegas Convention Center, N231-242

Title: I-CAR: Corrosion Protection (CPS01) / Where: Las Vegas Convention Center, N231-242

Wednesday / 12:30pm

Title: SCRS Repairer Driven Education: Educate NOT Alienate: The Key to Successful Collision Negotiations (Part I)

Title: SCRS Repairer Driven Education: How to Capture More Cars, Customers and Revenues Through Digital Marketing Title: SCRS Repairer Driven Education:

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Title: SCRS Repairer Driven Education: Educate NOT Alienate: The Key to Successful Collision Negotiations (Part II)

Title: SCRS Repairer Driven Education: Design Thinking for the Collision Repairer Title: SCRS Repairer Driven Education: Getting Ready for the Water Wave

November 3 Thursday / 8am

Title: I-CAR: Steel Unitized Structures Technologies and Repair (SPS07) / Where: Las Vegas Convention Center, N231-242

Title: I-CAR: Unitized Structures and Full-Frame Damage Analysis (DAM12) / Where: Las Vegas Convention Center, N231-242

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Title: SCRS Repairer Driven Education: Estimology and P-Page Logic 101

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try: The wins, the losses and a view of the future Title: SCRS Repairer Driven Education: Achieving Service Excellence (Part I) / Where: LVCC

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Title: SCRS Repairer Driven Education: Achieving Service Excellence (Part II) / Where: LVCC

Title: SCRS Repairer Driven Education: Right and Wrong Ways to Repair New Metals and their Reactions / Where: LVCC Title: SCRS Repairer Driven Education: Contracts: Terms and Ties that Bind / Where: LVCC

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Title: SCRS Repairer Driven Education: Mission: Control – Flawless Execution in Business Combat / Where: LVCC

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Title: I-CAR: Advance Material Damage Analysis (DAM08) / Where: Las Vegas Convention Center, N231-242 Title: I-CAR: Recycled Parts for Colli-

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At NACE, State Farm Announces Change to Shop Locator to Allow Ranking Based on Internal Performance Score, Will Use ‘PartsTrader’ for DRPs

State Farm has changed its shop locator system, accessible from its consumer website, to now rank its Select Service shops based on current performance scores as assessed by State Farm in the geographic region the customer selects. Previously the system listed shops in order based only on proximity to the address entered. State Farm’s Claims Consultant, George Avery said that once the system is fully implemented, if a customer is trying to find a Select Service shop within 15 miles of a certain zip code, they will see a list of all Select Service shops in that area. The system defaults at 15 miles, but they can contract their search or expand it up to a 50-mile radius. The shop with the best score in the area will be listed first, the shop with the second best score will be listed second, and so forth. State Farm said it’s possible the customer would have to advance a page to see the bottom-ranked Select Service shops if the search area is large enough, but again, all Select Service shops in the area specified by the customer will be shown. The scores themselves will not be shown on the shop locator, but Select Service shops always have access to

their score and performance data. A shop’s score, on a scale of 1 to 1,000, is updated monthly and is established using a proprietary formula that takes into account the key performance indicators State Farm uses to track each shop’s performance. Several other features of the repair facility locator have been modified in a redesign of both Statefarm.com and State Farm’s B2B site for shops. “We’re not going to list the highest performing shop that’s 100 miles away,” said Avery. “It’s all pulled from the same source,” he said. “It’s the same data feed the repair facility uses. My guess is that the day the shops get their update, they may go to the locator to see where they fall in the list.” Avery continued: “We’ve evaluated what our capacity needs are based on the needs of our customers and asked local management to use some tools we have to determine how many Select Service shops they need in their given markets,” he said. “We’re always interested in dealing with high performers. Some repairers have improved, and if they have, we encourage them to contact local management and share some key KPIs to give them a sense of how they’re doing business. And then if there

is a capacity need, local management will approach them. Most local management has an ongoing dialogue with many repairers in their neighborhood because, just because you’re not on Select Service, doesn’t mean you’re not good. So don’t be offended if there are no openings.” As far as the electronic parts ordering system that State Farm is exploring, Avery says they continue to explore that concept as they feel it’s in the best interests of their customers and repairers. “We want to be very transparent that we’re gathering information and visiting people and getting their input to help us build an application,” said Avery. “We think it will help everyone.”

Insurer will Require ‘PartsTrader’ Avery also said that PartsTrader will be the electronic parts ordering system the insurer expects it will eventually require its Select Service shops to use. He said testing of the system in several markets could begin in December. “It’s hard to tell for sure, but we would like to get some testing started before the end of the year,” Avery said. PartsTrader has yet to launch but has a provisional website at www.partstrader.us.com. Note this is not ThePartsTrader.com.

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California Man Guilty of Selling Counterfeit ALLDATA Products

On June 28, 2011 the ALLDATA AntiPiracy team in conjunction with the Sacramento Valley Hi-Tech Crimes Task Force concluded a six-month investigation into illegally copied ALLDATA products being sold out of Northern California. The subject of this investigation was publicly advertising the pirated software in his efforts to distribute it. Undercover officers conversed with the target who agreed to provide the illegal product in exchange for cash. After the actions of the suspect placed him in violation of California law, he was taken into custody. The subject is being charged with felony counts of Possession/Sale of Counterfeit Articles in reference to penal code 350(A)(2) which states that the offense involves 1,000 or more articles. On July 27, 2011 the subject pleaded guilty to felony charges in Superior Criminal Court. ALLDATA has a team that actively investigates the illegal copying, sale and distribution of its products and works with law enforcement throughout the country to prosecute persons who sell ALLDATA products illegally. The Sacramento Valley Hi-Tech Crimes Task Force includes 32 local, state, and federal law enforcement agencies.

ALLDATA Expands Integration with Electronic Parts Catalogs

ALLDATA has recently launched updates to their shop management system, ALLDATA Manage. “The expanded features and parts catalog integration was in direct response to customer feedback,” said Mark Gunnerson, Director of Sales and Operations. ALLDATA Manage key features include: ● Integration with major parts catalogs: AutoZone, Internet Auto Parts, WHI Solutions/Nexpart, Autoi, Activant and WorldPac ● Expanded online ordering provides single click stock checks, pricing and parts order processing ● Easy to use catalog setup and viewing ● AutoZone parts images, specifications and availability ● Improved product speed and performance “Integration with leading parts catalogs has significantly lifted sales for both ALLDATA and our affiliated parts suppliers,” said ALLDATA President Jeff Lagges. “Ordering parts online is such a huge timesaver for shops. In today's competitive business environment, it is critical for shops of all sizes to lower expenses through efficiencies. Our system is designed to do just that.”

64 NOVEMBER 2011 AUTOBODY NEWS | www.autobodynews.com

Mitchell RepairCenter™ Standardizes Special Materials Repair Data within TechAdvisor, Single Source Access to Multiple OEMs Mitchell International, Inc. has announced the integration of its Special Materials Quick Reference Guide into the RepairCenter™ TechAdvisor auto repair shop software solution. The integration simplifies the structural identification process for technicians by presenting the special materials data in Mitchell’s proprietary format that remains consistent across the different OEM’s. “Instant access to the Special Materials Quick Reference Guide via RepairCenter represents the first time that special materials specifications are available from multiple manufacturers in a consistent, user-friendly format from a single repair shop solution,” said Jason Bertellotti, Mitchell’s Vice President of Repair Solutions. “This enhancement is just one example of Mitchell’s ongoing commitment to optimizing the collision repair process. We continue to invest in TechAdvisor and find new ways to leverage Mitchell’s collision expertise to augment the OEM data and create a truly unique value proposition for the collision repair industry.” TechAdvisor’s Special Materials Quick Reference Guide helps en-

sure the proper repair of today’s advanced vehicles by identifying and color-coding special materials such as HSS and aluminum consistently across all manufacturers in an easyto-read format. Color codes indicate the composition of parts, helping technicians to perform the correct repair procedures and estimators to determine whether the parts can be repaired or replaced. Collision repairers are empowered to more quickly research today’s complex cars and trucks, write more accurate estimates, and ensure proper repairs with the end goal of reducing cycle times and increasing customer satisfaction. RepairCenter TechAdvisor is a leading-edge auto repair shop solution that provides a searchable database of historical vehicle repair reference data spanning up to 30 years and leveraging Mitchell’s 65 years of collision industry expertise. For more information about TechAdvisor and Mitchell’s other body shop software solutions for collision repair facilities, call Mitchell at 800-238-9111 or visit the website at www.mitchell.com.

LKQ Founder Donald E. Flynn Passes Away

Donald F. Flynn, Founder and Chairman of the Board of Directors of LKQ Corp., passed away on October 10, 2011. “We are saddened by the loss of a great leader and friend to so many. Don’s vision and leadership were key to the amazing growth LKQ has witnessed since 1998, the year the Company was founded. The Company and our shareholders owe Don a debt of gratitude for his dedication to LKQ. Our thoughts and prayers are with his family and friends,” stated Joseph Holsten, Vice Chairman and CoCEO of LKQ.

MBUSA CEO Lieb Ousted

Daimler AG has relieved Ernst Lieb of his duties as CEO of Mercedes-Benz USA, effective immediately. Even insiders were taken by surprise, and they believe the decision must be something personal since MBUSA has been growing steadily under Lieb’s watch. The company said that “daily business operations of MBUSA will be conducted by Herbert Werner (CFO and Vice President Finance, Controlling & IT) until further notice.” Mercedes has strengthened its sales position in the last two years, becoming the No. 2 luxury brand behind Lexus in 2009 and 2010.

Fiat 500 Top IIHS Safety Pick

The diminutive Fiat 500 received a top rating from the Insurance Institute for Highway Safety. IIHS said the 2012 500 Sport two-door had earned good marks for front, side rollover and rear crash evaluations. Results reflect performance in crashes that would occur with similarsized vehicles. The only other mini car to earn similar scores was Ford Motor Cos Fiesta. The top score for front crash resistance was earned during a retest in August after Fiat/Chrysler modified front seating to make it more secure, the IIHS said. Chrysler is counting on the hatchback 500 and other fuel-efficient vehicles to revive its lineup, which is dominated by pickups and other light trucks. The IIHS assesses a range of models each year. Underwritten by the insurance industry, the institutes ratings are closely followed by automakers, consumer groups and safety regulators.

Chrysler to Invest $165 Million in Body Shop at MI Plant

Chrysler Group plans to invest $165 million to build a new 1 millionsquare-foot body shop at its assembly plant in Sterling Heights, MI, according to reporting by Bradford Wernle in Automotive News. The body shop will begin producing Chryslers next generation of midsize sedans in 2013, said Chrysler spokeswoman Jodi Tinson. The plant currently builds Chryslers two midsize sedans: the Chrysler 200 and Dodge Avenger. The announcement marks the second major investment in the Sterling Heights plant. This follows an announcement in December 2010 that the company would spend nearly $850 million to build a new paint shop for the plant. Chrysler Group has now invested nearly $3.5 billion in its U.S. plants since June 2009. To some Chrysler employees, the Sterling Heights factory has come to symbolize the company’s comeback story. Before Chrysler’s 2009 bankruptcy, previous owners Cerberus Capital Management had decided to close the Sterling Heights plant, but Chrysler CEO Sergio Marchionne changed course and decided to keep it open.

“Today marks another milestone in the rags-to-riches story of the Sterling Heights Assembly Plant,” Scott Garberding, Chrysler senior vice president of manufacturing, said in a prepared statement. “A plant that was slated to close nearly two years ago will now be a state-of-the-art facility that will play an integral role in the success of this company by building the next generation of all-new vehicles.” The vehicles will be built on a Fiat front-drive platform adapted for the U.S. market. The investment includes the construction of the new body shop as well as the installation of equipment and conveyors that will be some of the most advanced in the industry. Tinson said the new body shop would replace the factorys current body shop, which will be “repurposed” for another use. There will be no net gain in terms of jobs, she said. Sterling Heights now employs 2,524 workers on two shifts. General Holiefield, vice president of the UAW/Chrysler Department, praised the news in a statement, saying the project “recognizes the commitment and dedication of this highly skilled workforce.”

EPA Federal Office Response to SCRS Letter on 6H Rule On April 4th, 2011, the Society of Collision Repair Specialists (SCRS) and 26 of its Affiliate Associations issued a letter to the ten Environmental Protection Agency (EPA, Agency) regional offices, requesting clarification on their interpretation and intended enforcement of exemptions listed in the EPA rule Subpart HHHHHH- National Emissions Standards for Hazardous Air Pollutants: Paint Stripping and Miscellaneous Surface Coating Operations at Area Sources (Rule 6H.) In addition to expressed concern that the rule as written “invalidates pollution controls based solely on the size of tool being used rather than the amount of pollution being generated,” the letter specifically requested a response from the EPA on three items: 1. A documented response regarding the exemption for coatings applied with a paint cup equal to or less than 3 fluid oz., and clarification that the rule applies to the type of work being performed. 2. A documented response that a 3 fluid oz. cup cannot be used and re-

peatedly filled to circumvent the rule. 3.Clarification that while a business applying coatings may be exempt from Rule 6H by meeting certain stated requirements, the exemption does not negate other additional regulatory requirements (such as OSHA, local zoning codes or fire ordinances) that may prohibit spraying flammable solvent or coatings with Hazardous Air Pollutants (HAPs) outside of a contained environment. In a response letter received by SCRS and issued by the EPA Air Branch, Monitoring, Assistance and Media Programs Division, it was clarified that the 3oz cup was indeed defined by the Agency as a way to distinguish conventional collision and vehicle repair from “operations that perform vehicle repairs of small stone chips and scratches.” The letter continues to point out that both “mobile operations and conventional collision repair shops are subject to the rule requirements for training, spray equipment, and the use of a spray booth or other ventilated and filtered encloSee 6H Rule, Page 70

www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 65

Toby Chess is an I-CAR program instructor, Welding specialist, and former salvage yard operator. Toby is universally known in the collision industry for his charitable works, worthy causes, and magic tricks. He can be reached at tcspeedster@yahoo.com

Hey Toby!

SEMA’s Repair Driven Education and Government Regulations with Toby Chess

will also need to invest in training. ReSEMA is just around the corner and many of you will be attending the trade pairing aluminum is not difficult, but there are a few techniques that need to show and SCRS repair-driven educabe learned to achieve a successful retion. I am teaching a class on how government regulations will impact the pair. You will also see smaller vehicollision industry right now, but for those who cannot attend, I am going to cles. With smaller cars, you will see an increase in the use of ultra high highlight my presentation here. McClune Let’s with David strength steels in cabin reinforcements look at the US Government CAFÉ (corporate average fuel economy) for passenger protection. Nearly all standards. By the year 2015, the CAFÉ manufacturers require full replacement of these reinforcements and that will standard for the industry (cars and lead to more total losses. Let’s look at trucks combined) is 31.6 MPG (35.7 for cars and 28.6 for trucks). How will Federal Motor Vehicle safety standard 216A. these standards affect body shops? FMVSS 216A deals with roof First, cars will need to get lighter and smaller. The use of aluminum will crush. The standard for 2009 was 2.5 times Gross Vehicle Weight. In other increase. You will see more hoods, deck lids, fenders and other body parts with John Yoswickwords, if a car weighs 2000 pounds, the roof would need to support 5000 being made from aluminum. Many aluminum hoods are double paneled lbs. The Insurance Institute for Highway Safety did not think the 2.5 stanwith virtually no access to the back dards were sufficient, so they set a side. Most shops today do not the castandard for 2009 at 3 times GVW and pability to repair this type of damage. 4 times GVW by 2012. To gain a 5 star What is needed is an aluminum stud rating, the vehicles manufacturers had gun. to increase the strength of the ‘B” pillar reinforcements. How does this increased strength affect the collision industry?

signed to transfer energy and deform. This energy will travel to the opposite side of the vehicle and, if not measured before an estimate is written, can lead to all kinds of problems. The “B” pillar on the opposite side of the car can move (side impact), but the floor may not and this can lead to all kinds of improper fit issues. You will need to look at measuring systems that can measure “A” and “B” pillars without placing a vehicle on a frame machine.

California Autobody Association

Year in Quotes

OEMs for their current data (most of the time they make it available free) or check out ALLDATA. It is another investment that any body shop will need make. The stronger reinforcements have also created a need for pre-measuring for damage analysis. Besides the roof crush, these super strong reinforcements are de-

YOU ONLY GET ONE CHANCE AT THE FIRST REPAIR.

Collision Repair Association ofChoose CA.Original MINI Parts. with Richard Steffen

Because you can’t repair your reputation.

S Hardtop 2011

These Dealers Below Are Original MINI Parts Distributors:

Transition Planning

The first thing that comes to mind

with John Yoswickis the need for OEM data. You cannot

do structural repairs or structural parts replacement without it. For example, you can section a “B” pillar on (lower portion) on a Toyota Venza, but you The unit pictured first comes with will need to replace the entire reinthe stud gun and a number of hand forcement on a Toyota Camry. tools for repairing aluminum. The maThe following page was taken chine pictured second is just the stud from Toyota’s Technical Information gun with the puller. You will need to System or TIS for short. The sheet invest in hand tools because aluminum shows where to section and the type of with Hendricks tools can’t be used on Karyn steel compowelds that are needed for a quarter nents because of the likelihood of galpanel replacement. You can subscribe vanic corrosion. Dent Fix, Reliable to TIS or you can subscribe to ALLAutomotive Equipment and ProSpot DATA (they obtain the OEM data for are a few examples of companies that you). sell aluminum repair equipment. You While at SEMA, check with the

Shop Showcase

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with David M. Brown

California

Nick Alexander MINI Los Angeles

800-800-NICK 323-583-4109 Direct www.alexandermini.com

South Bay MINI Torrance

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to invest in an inverter spot welder. Ultra High Strength steels are very sensitive to heat. MIG welding produces a large heat affected zone.

2000 degrees Fahrenheit and UHSS steel becomes mild steel at that temperature. It’s weaker and it loses all of its energy transfer properties. A spot weld, on the other hand, has a very small heat affected zone. Inverter Spot welding machines have computers to reduce the heat affected zone on HSS and UHSS metals. Manufacturers of these smart ma-

Heat Affected Zone

2013. With more vehicles with side curtains, knee bolsters, and between seat air bags, the cost of repairs is going to skyrocket and that will in turn lead to more total losses. Moreover, with a number of insurance companies not paying sublet markups (they are now calling them handling fees), you better start doing the work yourself. That translates into more training and equipment. A scan tool will be needed to reset the codes on the SRS system. You need this tool to clear the codes on the occupant classification system, when

The weakest part of the weld is in the heat affected zone. The temperature when MIG welding can approach

Some of the manufactures that make this type of equipment are, Celette, Car-O-Liner, The Collision Equipment Group and Chief Automotive Equipment. You see all of these machines at SEMA. Still dealing with the stronger “B” pillars, you will need

qualified electrician. One more item pertaining to side impact, is the side curtain. Side curtains will be mandatory on all vehicles sold in the United States by the year

Heat Affected Zone

chines include Car-O-Liner, Elektron, Wielander+Schill, Tecna, and CompuSpot. Besides being able to produce a smaller heat affected zone, compared with their predecessors, they are fully automatic and can keep records on the welds for each repair job. But don’t run out and buy one without doing your homework. First and foremost, you will need to check your electrical supply. These machines only work on 3-phase power. They also require large gauge wires (minimum of 4 gauge is recommended) due to the increase in amps that is needed. Again, before you purchase one of these “bad boys,’ get the electrical needs and consult with a

you R&I the front passenger seat. You will need this tool to reset the steeringangle sensor. Let’s review the SAS. The government has mandated all vehicles by the year 2012 have some sort of electronic stability system. Part of that system is the steering angle sensor. The steering angle sensor counts the steering-wheel revolutions accordingly. The overall steering wheel angle is thus made up of the current steering wheel angle together with the number of steering wheel rotations. If a correction is needed, the ABS is activated and/or the engine is retarded to slow the vehicle down to prevent skids and rollovers. Every time an alignment is needed, a complete 4 wheel alignment is done followed by a recalibration of the steering angle sensor. If this is not done, the ESC may not work properly See Hey Toby!, Next Page

www.autobodynews.com | NOVEMBER 2011 AUTOBODY NEWS 67

Parts Profiles

Larry Williams is an innovative parts manager with national awards and over 30 years of experience in creating and managing profitable departments. He can be reached for consultation at ljoew2@gmail.com. To read all his columns go to http://www.autobodynews.com/columnists/williams-larry.html

A Relatively Young Audi Dealership Makes Quality Pay Off The newest member of the Autobody partment, and the best employees he ice creates the friendships and loyalty council. When important visitors arrive from Germany, Audi-Mission so necessary to success in these times. can find. News Distinctive Dealerships Group Automaker Actions and Announcements with Larry Williams

is Audi-Mission Viejo in Southern Justin’s investments in technology with Jeremy Hayhurst California. A relatively new dealer, include state-of-the-art inventory control, and a simple and easy internet only seven years old, Audi-Mission order system. Audimv.com is a good Viejo has managed to thrive by always example of how to set up a simple onputting quality first. Quality is in all areas of the parts line parts link. A well organized departdepartment. Justin Stinnett is a parts ment holds over a half-million dollar with how Jeremy Hayhurst inventory, and a modern communicadirector who knows to make quality pay off. Justin began only two tions system completes the basics. years ago, with a bloated inventory Justin has four quality counterand untrained personnel. He needed men, led by Armando with twenty years experience, then Henry and Robin with eight years, and Mario with six. A bilingual crew works well in the southern California market, language issues are no problem. This team works together with common goals, to keep all of his twenty years experience to their department the best in the region. change that. Since then, there has been Their efforts have been rewarded, a steady rise to the top and is one of their wholesale business has tripled! the best Audi parts departments in the Lee Amaradio Jr. Customer service is the standard region. His secretwith has been to insist on here, promises are kept, and orders are quality. Quality means the newest and best available technology for his de- always completely filled. Such serv-

Autobody Tech

I-CAR Tech

Justin sees himself as a businessman, instead of a parts man, and regards the changes he has made as investments, not expenses. He believes “You get what you pay for. And if you have great people, you will achieve great results.” Results, for a dealer, equal profits. This parts department creates profit, which is exactly my philosophy. With proper management, the parts department will be a dealership’s best investment, not its worst. Again, no dealership can succeed without support. Audi is a company that wants to have the best parts delivery system possible. They have instituted a “local parts council,” which meets quarterly, to communicate with dealers and ensure a smooth flow of parts to all of their customers. Audi recognizes Justin’s hard work, and has chosen him for membership in their

Amaradio Explains CRA

poor air quality. It is only a matter of time before the paint companies will switch entirely to waterborne so, if you’re not already there, you better get or, even worse, not at all. Most syson-board soon. You will have to retrain tems will not show a fault code on the your paint staff and invest in new dash, therefore, a scan tool will be equipment. It is easier to do it now and needed to reset the steering angle sennot when it is mandated. Where are sor. A couple of other governmental you going to get the money to pay for items that are on the horizon that you all of this equipment? should be aware of are the new Freon It comes from profits and every refrigerant—HFO-1234yf and, of time you give something away, you course, waterborne paints for those not are making a lot less in profits. I sugyet mandated. gest that you visit the Society of ColHFO-1234 yf is a new type of lision Repair Specialists web site Freon that is now being used in Eu(scrs.com). Scroll to the center of the rope. GM will be using it on their U.S. page and click on the Guide to comvehicles next year. This new Freon is plete repair planning. There are over much safer to the environment than 800 not-included items on their esti134A. You will have to invest in a new mating guide and by adding a few of Dan Espersen recovery system,with leak detection equipthese items to all your estimates; you ment, and new manifolds. can achieve some higher profits. The Many states have mandated the best part of all, it is free for everyone. use of waterborne paints in areas of Enjoy SEMA, I know I will.

Viejo’s parts department is on their tour, as an example of growth, organization, and cleanliness. An aside to all body shops in the Mission Viejo area… Should you need any parts for an Audi, call AudiMission Viejo. You are guaranteed to get great service, and I am proud to include them in my list of Distinctive Dealerships. In other areas, I’d also like to recommend Audi of Downtown LA in Los Angeles and Circle Audi in Long Beach. To see all of Larry Williams’ articles go to autobodynews.com and select Williams under the Columnists menu. See also Larry’s popular series of Parts for Profit articles in his column section. You can also link directly at: www.autobodynews.com/ columnists/williams-larry.html

Audi Genuine Parts

Nothing else measures up.

Continued from Page 67

Hey Toby!

Consumer Callout

ALL OEM Information

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So. California Audi of Downtown LA LOS ANGELES 213-747-7248 213-222-1261 Fax Ask for Carlos or Fausto

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I-CAR Tech

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

I-CAR Repairability Summit: Don’t Section Ultra-High-Strength Steel The primary intention of the summit was to identify best practices for working with ultra-high-strength steels (UHSS) and the new construction methods found on late model vehicles. In February 2012, I-CAR will premiere its Best Practices for HighStrength Steel Repairs (SPS09) course, highlighting with Lee Amaradio Jr. issues covered during the Summit and other best practices. While vehicle maker recommendations should be folFigure 1 - Industry experts discuss steel identification lowed first and foremost, these best practices can be leveraged one of the “best practices” identified where none exist. For example, while at a Repairability Summit hosted by ICAR earlier this year. Summit atten- there’s a lot more information on steel dees consisted of subject matter strengths in the vehicle service information with each new model year, experts from vehicle makers, tool and equipment makers, collision repair fa- sometimes the information is not there. Summit attendees discussed cilities, insurance companies, and the various tests the technician can perAmerican Iron and Steel Institute. Unless specifically recommended by the vehicle maker, parts with a tensile strength over 600 MPa should only be replaced at factory seams. This is just

Amaradio Explains CRA

Consumer Callout

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form in the repair facility that help identify if the steel is mild, HSS, or UHSS (see Figure 1).

methods like MIG brazing and selfpiercing rivet bonding were discussed, including the applications where they are recommended and possible future uses (see Figure 3). To facilitate the conversation, I-CAR brought in two vehicles with

Summit Discussions The agenda for the summit was laid out like a repair plan. After the discussion on steel strength identification, the group discussed best practices for anchoring and pulling and different removal methods. The created heat-affect zone from heating and removal methods was a major discussion point (see Figure 2). A discussion on attachment methods focused on GMA (MIG) welding heat-effect on UHSS, the changes in spot weld machine set-

similar side damage. The vehicles were of the same make and model, and even though separated by only one model year, the later model contained significantly more UHSS compared to the previous model. The two vehicles were used to identify the necessary changes in repairs due to more use of UHSS.

Knowledge Gap To prepare what information would be discussed at the summit, I-CAR conducted a survey of technicians in the field, asking what kind of information they would like to see from I-CAR in a future course on the subject of advanced construction. The survey revealed a lack of information among technicians actually making the repairs, and a definite need for a course Figure 3 - Industry experts discuss MIG brazing addressing the subject. applications

Summary It became clear during the recent ICAR Repairability Summit that vehicles cannot be repaired using the same repair methods that were acceptable just a few years ago. Industry experts that attended the Summit addressed these issues and agreed on a list of best practices that can be used when vehicle maker repair information does not exist. The list will be available in the Best Practices For High-Strength Steel Repairs Figure 2 - Industry experts discuss anchoring and (SPS09) course premiering in structural straightening of UHSS February 2012. tings, and how destructive testing of Watch a video describing some of spot welds differs on UHSS panels the highlights on the Best Practices compared to HSS or mild steel. For High-Strength Steel Repairs Somewhat new attachment (SPS09) course at www.i-car.com.

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made it clear that much of the rule enTo view the full letter provided to World’s Oldest Running Car forcement is based on intent. In some the ten EPA regional offices and the EPA Fetches High Price at PA Auction cases the use of the 3.0 ounce cup official response follow these links: The oldest existing car in the world, an may be a necessity of the job being h t t p : / / w w w . s c r s . c o m / p d f 1884 De Dion Bouton Et Trepardoux news/EPA%20Regions%203oz%20R sures,” and that while “the 6H rule performed, but it is clear to us that the Dos-A-Dos Steam Runabout, was sold does not extend to spray-applied coat- EPA offices will not accept inten- ule%20%20FINAL%20FOR%20WE at auction for 4.62 million dollars at OcBSITE.pdf ings applied from a hand-held device tional circumvention of the rule by tober’s RM Auctions sale in Hershey, habitually “fragmenting paint jobs Want http://www.scrs.com/pdf-news/6Ha paint cup capacity that is equal uswith your opinion on matters affecting the industry. PA. The car, named La Marquise, set a to Contribute to this Southwest Edition? record price for vintage vehicles. The into smaller tasks” or “refilling 3.0 rule.PDF to or less than 3.0 fluid ounces, the oldest car was put up for an American ounce cups in an effort to avoid reguAdditional information is available Agency may find that persons who auction house RM Auctions. Auction repeatedly refill and use a three ounce lation.” This is the basic clarification at the SCRS Web site: www.scrs.com. organizers hoped to gain for rarity 2-2.5 publisher@autobodynews.com SCRS at the following cup, aspublisher@autobodynews.com a means of avoiding rule ap- we were looking for, and anticipate You can e-mail million dollars. the auction house did that this will provide solid informaaddress: info@scrs.com. plicability, are attempting to circumnot disclose the La Marquise Buyer’s tion for shops.” vent the 6H rule...and reserves the name , who became the fifth owner of this car in its history. The first owner of One additional point of clarificaright to bring enforcement actions Promote your business with Promote with La Marquiseyour was abusiness French nobleman, tion offered by the EPA letter conagainst any person whose action Count de Dion, who took part in its crean exclusive article featuring an exclusive article featuring firmed that “the 6H rule does not equates to rule circumvention.” ation. In 1906 De Dion sold the car to negate other regulatory requirements “We are pleased that the EPA has your products or services. your products orHenri services. the French army officer Doriolyu, advertise as federal or local occupational a clear and concise (such To Theresponded source with for timely whose family has owned La Marquise call Joe Momber at: message that collision until 1987. The next owner was a memnformation that everyrepairers and health and safety requirements, local codes, or fire ordinances) that mobile operators alike will be held to zoning 800-699-8251 ber of the British club classic cars, Tim body shop needs! Moore , who restored the car and took it may prohibit or restrict spraying the same regulatory requirements as e-mail: to fullyCall operational status. In 2007, La flammable solvents or coatings conit relates to the 6H Rule,” statedjmomber@autobodynews.com CALL: Joe Momber for details! for details! ALL 800-699-8251 Marquise was sold to a collector from SCRS Chairman Aaron Clark. “In taining HAPs within or outside of a Texas,800-699-8251 John O’Quinn. 800-699-8251 contained environment.” their Your response, the EPA Office has www.autobodynews.com Start FREE Continued from Page 65

6H Rule

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