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A POSITION OF STRENGTH AASP/MA FALL MEMBERSHIP
MEETING RECAP
L A B O R R AT E :
Facts, Fiction and the Future
Part 2
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©2020 BMW of North America, LLC. The BMW name, model names and logo are registered trademarks. 4 December 2020
New England Automotive Report
CONTENTS
December 2020 • Volume 18, No. 12
DEPARTMENTS
FEATURES
PRESIDENT’S MESSAGE by Molly Brodeur 6 | Thank You!
24
EXECUTIVE DIRECTOR’S MESSAGE by Evangelos “Lucky” Papageorg
10 | Collision Rates vs. Mechanical Rates
LOCAL NEWS
14 | ADALB Resumes Teleconference Meetings 16 | AASP/MA Comments on Overwhelming Right to Repair Ballot Victory
NATIONAL NEWS
18 | AASP/MA President Molly Brodeur Named Vice President of AASP National
COVER STORY by Joel Gausten A POSITION OF STRENGTH:
AASP/MA Fall Membership Meeting Recap
VENDOR AFFINITY PROGRAM MEMBER SPOTLIGHT 20 | Columbia Ford/Kia by Alana Bonillo
LEGAL PERSPECTIVE
36 | Does the Labor Rate Matter? by James A. Castleman, Esq.
28
ALSO THIS ISSUE 21 | AASP/MA MEMBER APPLICATION 31 | AASP/MA VENDOR AFFINITY PROGRAM SPONSORS
ADVERTISERS’ INDEX Accudraft Paint Booths ................................OBC
AASP/MA FEATURE by Joel Gausten LABOR RATE: Facts, Fiction and the Future - Part 2
Ford Group....................................................26
Nissan Group ................................................17
Genesis of Norwood ..................................10, 16
PPG................................................................3
Audi Group ....................................................8
Honda Group ................................................12
Quirk Wholesale Parts ....................................27
Balise Wholesale ............................................11
Hyundai Group ........................................16, 35
Reliable Automotive Equipment ..................22-23
Best Chevrolet ..............................................40
Ira Subaru......................................................14
Sarat Ford Lincoln ..........................................29
BMW Group............................................................4
Ira Toyota of Danvers ......................................15
Sherwin Williams ..........................................30
BMW/Mini of Warwick ....................................9
Kelly Automotive Group ................................IBC
Spanesi ..........................................................7
Boch Chevrolet............................................10, 16
Kia Group......................................................35
Subaru Group ................................................41
Boch Hyundai ..........................................16, 35
Linder’s, Inc. ................................................36
Toyota Group ................................................39
Collision Solutions..........................................34
Long Automotive Group ..................................13
USI North America ........................................32
Collision Supplies ..........................................35
Mazda Group ................................................42
Volvo Group ..................................................34
Colonial Auto Group ....................................IFC
McGovern Chrysler Jeep Dodge Ram ................36
VW Group ....................................................19
Empire Auto Parts ..........................................38
Mopar Group ................................................33
Wellesley Toyota/Scion ..................................18
FinishMaster..................................................25
Network 1 Solutions........................................37
Wheel Collision Center ..................................38
New England Automotive Report December 2020 5
PRESIDENT’S MESSAGE
Thank You! MOLLY BRODEUR
is is a bittersweet message, as it’s my last as president of AASP/MA. What a journey it has been, and there are so many amazing people who have helped the association and me along the way. My dad, Al Brodeur, brought me to my first meeting back in 2006 at the Holiday Inn in Marlborough, hosted by the Central Massachusetts Auto Rebuilders Association (CMARA) and with Tom Ricci at the helm. After that first meeting, I was in awe of the challenges this industry faced and felt compelled to help. Along with my dad, Tom Ricci was (and is) an incredible mentor to me. He taught me how to lobby and interact with legislators and regulatory bodies such as the ADALB. He showed, with incredible grace, how to lead an organization and how to act in the best interest of our members and the industry at-large. Fast forward to 2010 when the three organizations – the Massachusetts Auto Body Association (MABA), CMARA and AASP MA/RI - agreed to merge to become the Alliance of Automotive Service Providers of Massachusetts (AASP/MA). I was asked to join the newly formed Executive Board as treasurer, and I have moved up the ranks since then. At the time of the merger, Tom Ricci was the interim president of AASP/MA, and Peter Abdelmaseh was our executive director. Our entire Board worked tirelessly to ensure a smooth transition, and to coin a phrase from Tom Ricci, “We cleared the brush and paved a new road forward” as a united industry in Massachusetts. Most recently, we’ve engaged Lucky Papageorg as our executive director. Lucky has tremendous passion for our industry, and it has truly been a pleasure working alongside him these past few years. His commitment to your success and the advancement of our industry is unparalleled. We are “Lucky” to have him! As I wrap up my swan song, I want to acknowledge some folks N
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who have bolstered AASP/MA and me over the years: Rick Starbard, for bringing a national perspective to our local industry and always engaging in thoughtful, diplomatic dialogue; Paul Hendricks, who brought years of wisdom and history to our Board meetings; and Tom Greco, Joel Gausten, Alicia Figurelli and our admin extraordinaire, Alana Bonillo – all with omas Greco Publishing, who have consistently made our industry shine with our publication, New England Automotive Report; our members only-newsletter, Damage Report; and their rock-solid administrative support. Last but certainly not least, a heartfelt THANK YOU to all of the Board of Directors members who have served alongside and supported me over the last 10 years. ere were bumps along the way, but I can say with absolute certainty that ALL of the Board members who served then and now take a lot of time away from their business and families to work hard to protect our industry, provide education/information, lobby and create opportunity for you to improve your business. To my vice presidents, Adam Ioakim and Kevin Gallerani: You are the unsung heroes whose steadfast support, leadership and dedication is second to none. In the words of the immortal Walt Disney, “Progress is impossible without change.” It’s time for change, and I hope you will embrace it with open arms. With heartfelt thanks to you all, Molly
PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
AASP/MA PRESIDENT MOLLY BRODEUR is the chief operating officer of Al Brodeur’s Auto Body in Marlborough, MA. She can be reached at (508) 485-1082 or molly@albrodeur.com N
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AUT M TIVE STAFF
AASP/MA EXECUTIVE COMMITTEE
PUBLISHER
GRAPHIC DESIGNER
Thomas Greco - thomas@grecopublishing.com
Lisa M. Cuthbert - lisa@grecopublishing.com
SALES DIRECTOR
EDITORIAL/CREATIVE COORDINATOR
Alicia Figurelli - alicia@grecopublishing.com
Alana Bonillo - alana@grecopublishing.com
EDITORIAL DIRECTOR
PRODUCTION
Joel Gausten - joel@grecopublishing.com
Donna Greco - donna@grecopublishing.com
TREASURER Matthew Ciaschini IMMEDIATE PAST PRESIDENT Paul Hendricks LEGISLATIVE/ADALB COMMITTEE CHAIRMAN Tom Ricci
PRESIDENT Molly Brodeur VICE PRESIDENT Kevin Gallerani SECRETARY Gary Cloutier
AASP/MA STATEWIDE DIRECTORS PUBLISHED BY: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963 www.grecopublishing.com
COLLISION DIRECTOR Rob DelGallo
AT-LARGE DIRECTOR Adam Ioakim
AASP/MA DIRECTORS Ray Belsito
Kevin Kyes
Rick Fleming
Frank Patterson
Joshua Fuller
Mike Penacho
Andrew Potter Dana Snowdale
Bill Spellane Brian Stone
AASP/MA ADMINISTRATIVE OFFICE -New England Automotive Report is published monthly by TGP, Inc., 244 Chestnut Street, Suite 202 Nutley, NJ 07110. Distributed free to qualified recipients; $48 to all others. Additional copies of New England Automotive Report are available at $5 per copy. Reproduction of any portions of this publication is specifically prohibited without written permission of the publisher. The opinions and ideas appearing in this magazine are not necessarily representations of TGP Inc. or of AASP/MA. Copyright © 2020 by Thomas Greco Publishing, Inc. Images courtesy of www.istockphoto.com
WWW.AASPMA.ORG 6 December 2020
New England Automotive Report
Evangelos “Lucky” Papageorg: AASP/MA Executive Director
Alana Bonillo: AASP/MA Administrative Assistant P.O. Box 212 Marlborough, MA 01752 617-574-0741
New England Automotive Report December 2020 7
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8 December 2020
New England Automotive Report
Audi Peabody 252 Andover Street Peabody, MA 01960 800.774.8411 Parts Direct: 978.605.2182 email: pwalke@iramotorgroup.com www.audipeabody.com
Mattie Audi 80 William S. Canning Blvd. Fall River, MA 02721 800.678.0914 Fax: 508.730.1283 www.mattieaudi.com
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New England Automotive Report December 2020 9
EXECUTIVE DIRECTOR’S MESSAGE
EVANGELOS “LUCKY” PAPAGEORG
Collision Rates vs. Mechanical Rates
e Labor Rate issue has been at the core of much discussion the sophisticated, electronic and computerized machines they are for far too many years. As collision repairers, we have lived with a now, mechanical repairs have become much easier to accomplish. multibillion-dollar industry dictating to us what our “Labor Rate” Where once the mechanic would listen with a trained ear and should be. More to the point, we have been “brainwashed” into follow a formula, today’s mechanical technician plugs a vehicle into thinking that the rate of reimbursement being offered by the insurer a computer and is essentially told what is wrong and how to fix it. IS the same thing as our Labor Rate. I have spoken about By contrast, a “body man” could at one time take a this many times before; however, it bears repeating. few quick measurements (if those were even necessary Each and every one of you know what the services since “eyeballing” was sufficient) and then begin to Today, you provide are worth. You know the value of a hammer and dolly out, possibly heat shrink or whether you are well-trained, hard-working technician. (Note apply a dent puller to the damaged area to start a mechanical or that I said “technician,” not “body man”!) We the repair process. rough their artistic collision technician, have evolved from the days of being “body abilities, they made it as good as new. at men” to become highly skilled and same “body man” would then apply body filler information and technologically advanced technicians in our to smooth out the roughness, grind, sand and techniques are field. At least many of us have. apply a single-stage paint in one of the few changing at a is raises another point that needs to be basic colors available for vehicles “back in the discussed: e difference between a technician day.” Once the paint was dry, a quick wash was breakneck speed. who works in the collision repair industry and one done and a call was made to the owner for them to who works as a mechanical technician. I have been told pick up what could be reasonably considered a safe that “back in the day,” it was the “body man” who was the vehicle. When was the last time anyone worked on a vehicle top dog in the automotive repair earnings category. At one time, in that fashion? By comparison, today’s repairs are a far cry from they were paid at a higher hourly Labor Rate based on the skills those “simple” days. e application of today’s refinishing materials required to repair a collision-damaged vehicle versus the knowledge alone requires expert training and understanding of procedures and and skills needed to keep an engine maintained and repaired. (in many instances) specialized equipment. Somewhere along the line, the value of being a highly skilled Today, whether you are a mechanical or collision technician, “artisan” was surpassed by a formula-following mechanical repair information and techniques are changing at a breakneck speed. On technician. the mechanical side of the equation, one can see that the Labor No disrespect intended to able-bodied and well-trained Rates being charged AND paid by the vehicle owner are keeping mechanics, but there is a huge difference between what they are able pace. As we are too well aware, it is an understatement to say that to do to a vehicle – which requires some maintenance and the collision repair industry is “lagging” behind. It is NOT just diagnostic expertise – and what is required to restore a mangled lagging!!! If this were discussed like a NASCAR race, we would say vehicle back to “safe roadworthiness.” As vehicles have evolved to that we are in last place by at least three laps. (Some would argue by
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10 December 2020
New England Automotive Report
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even more!) is is easily demonstrated if we look at the information we have readily available through National AutoBody Research’s (NABR) Labor Rate Survey in conjunction with the documentation in BillableGenie. We can easily view Labor Rates in dealer and independent mechanical shops and make comparisons. To that end, the series of articles in New England Automotive Report and the ongoing content in our members-only newsletter, Damage Report, will continue to focus on some of the “whys” and offer some possible solutions. We will continue to expose the bastardization of the Direct Payment method of claim settlement – a claim settlement process that lends itself to the insureds in Massachusetts being systematically defrauded by their insurance companies under the guise of saving them money through lower insurance premiums. I daresay that there is less than one percent of any insurance original appraisal written that cannot be reviewed and found to be knowingly fraudulent. Every time a licensed insurance appraiser does not (as per 212 CMR 2.04[e]) “… specify all damage attributed to the accident, theft or other incident in question…,” they are committing FRAUD! Every time a licensed insurance appraiser fails to write a reasonable amount for paint and materials based on their working knowledge, they are committing FRAUD! e fact that they do this because they are instructed to do so and fear for their jobs does not negate the fact that it is FRAUD! e bastardization of the Direct Payment process comes into play when the insurer intentionally misleads and underpays the vehicle owner based on the underwritten original estimate. ey hide behind comments similar to, “If there is additional damage found once the
repair process begins, we will work with your chosen shop to address the additional work.” To add insult to injury, they try to convince the insured that their stated “Labor Rate” is the “prevailing Labor Rate” and not a reimbursement rate. MORE FRAUD!!!! And there you have it. We have come full circle. e public and our industry is being controlled by LIES! at is the real reason why there is such a huge unjustifiable disparity when you compare mechanical Labor Rates to collision Labor Rates. It is the difference between a free market – which is based on the cost of doing business, being able to keep pace with changing technology, performing repair procedures, making a reasonable profit and accepting the liability to do so – versus artificially controlled rates by a third party that has no right to do so other than through the ability we choose to give it! e last time I looked, mechanical shops are busy; they charge what they need to perform the repairs. eir customers pay their rates, and they do so without any hope of having part of that cost reimbursed by an insurance company. (By the way, the same goes for doctors as well! And you are the doctors for the vehicles.) Do you, as a collision repair shop owner or trained technician, deserve to be paid anything less than a mechanic? Your resounding answer should be, “Absolutely not!!!” PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
AASP/MA EXECUTIVE DIRECTOR EVANGELOS “LUCKY” PAPAGEORG can be reached at (617) 574-0741 or lucky@aaspma.org
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It Takes Genuine Honda Collision Repair Parts To Achieve a Genuine Honda Fit. Honda collision repair parts are engineered and manufactured to Honda standards. In the collision-repair business, time is money, and you can’t waste time on parts that almost fit properly. Use Genuine Honda replacement parts. Your reputation depends on it. For Genuine Honda parts, contact these Authorized Honda dealers. Bernardi Honda 960 Worcester Road Natick, MA 01760 Parts Direct: 800-247-3033 FAX: 508-651-1220 www.bernardihonda.com
Kelly Honda 540 Lynnway Rt. 1A Lynn, MA 01905 Parts Direct: 800-779-7466 FAX: 781-595-2898 e-mail: mpsomosjr@kellyauto.com
Honda of Enfield 20 Palomba Drive Enfield, CT 06082 Toll Free: 800-222-6632 FAX: 860-253-5419 www.liahondaofenfield.com
Honda North 382 Newbury Street Danvers, MA 01923 Toll Free: 800-882-9797 FAX: 978-774-9483 e-mail: eadams@iclautos.com www.hondanorth.com
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12 December 2020
New England Automotive Report
Schaller Honda 1 Veterans Drive New Britain, CT 06051 Toll Free: 800-382-4525 Direct: 860-826-2080 FAX: 860-826-2083 e-mail: jkiniry@schallerauto.com www.schallerauto.com
Lundgren Honda of Auburn 525 Washington Street Auburn, MA 01501 Toll Free: 800-777-2044 FAX: 508-721-0872 e-mail:pmccarthy@lhonda.com www.lhonda.com
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[LOCAL] NEWS
ADALB Resumes Teleconference Meetings On October 14, the Auto Damage Appraiser Licensing Board (ADALB) held its first teleconference meeting since April. e majority of discussions involved Board procedures in light of the ongoing COVID-19 pandemic, including the appropriate way to proceed in addressing five complaints currently on file against automotive appraisers in the state. Additionally, the Board discussed the possible termination of an emergency Complete audio of the October 14 Advisory Ruling, issued in March in response teleconference meeting is to Governor Baker’s State of Emergency available in the Members Only declaration, that temporarily waives the section of aaspma.org. requirement of personal inspection of motor vehicle damage in cases where the amount of loss (less any applicable deductible) is under $3,000. is amount represents an increase from the $1,500 threshold established in current state regulations. Complete audio of the October 14 teleconference meeting is available in the Members Only section of aaspma.org. Information on upcoming meetings (including their agendas) is available at mass.gov/service-details/adalb-notices-of-meetings-andagenda. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
14 December 2020
New England Automotive Report
New England Automotive Report December 2020 15
[LOCAL] NEWS
AASP/MA Comments on Overwhelming Right to Repair Ballot Victory e Alliance of Automotive Service Providers of Massachusetts (AASP/MA) applauds the more than two million voters who ensured passage of a critical ballot measure to strengthen and revise the state’s existing Right to Repair Law. e measure will improve the independent automotive repair and service industry’s access to OEM repair information through the following provision (presented here with minor edits): Commencing in model year 2022 and thereafter, a manufacturer of motor vehicles sold in the Commonwealth, including heavy-duty vehicles having a gross vehicle weight rating of more than 14,000 pounds, that utilizes a telematics system shall be required to equip such vehicles with an inter-operable, standardized and open access platform across all of the manufacturer’s makes and models. Such platform shall be capable of securely communicating all mechanical data emanating directly from the motor vehicle via direct data connection to the platform. Such platform shall be directly accessible by the owner of the vehicle through a mobile-based application and, upon the authorization of the vehicle owner, all mechanical data shall be directly accessible by an independent repair facility or a class 1 dealer licensed pursuant to section 58 of chapter 140 limited to the time to complete the repair or for a period of time agreed to by the vehicle owner for the purposes of maintaining, diagnosing and repairing the motor vehicle. Access shall include the ability to send commands to in-vehicle components if needed for purposes of maintenance, diagnostics and repair.
“is is an extraordinary win for independent automotive service and collision repair facilities in the Commonwealth,” comments AASP/MA Executive Director Evangelos “Lucky” Papageorg. “e Right to Repair law was overwhelmingly supported in 2012; however, it needed updating due to advances in technology. On behalf of the vehicle owner – and to protect our own liability in the repair process – it is critical that both collision repairers and independent automotive service professionals have access to the most current mechanical and diagnostic data available. is information is vital to enable proper repair and guarantee proper functionality of all the computerized functions of today’s vehicle.” AASP/MA was one of the original 10 signers on the petition to create the ballot question. “Without access to the most current information, independent shop members of AASP/MA are currently unable to accurately diagnose, repair, recalibrate and verify that all functions are operating properly before returning the vehicle to the owner,” Papageorg adds. “is victory at the polls will go a long way in solving that issue for our association membership and the independent Massachusetts automotive repair and service industry atlarge.” Already a years-long advocate for Right to Repair, AASP/MA has been a particularly ardent supporter of the movement throughout 2020. Earlier this year, Papageorg appeared before the Massachusetts Joint Committee on Consumer Protection to urge its support of House Bill 4122, legislation designed to achieve the same goals as the ballot initiative.
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VISIT US: 391 Boston Providence Hwy Route 1, The Automile Norwood, MA 02062
16 December 2020
New England Automotive Report
781-762-9210 800-559-9210 TOLL FREE:
bchwholesale@boch.com
E-MAIL:
VISIT US: 381 Boston Providence Hwy Route 1, The Automile Norwood, MA 02062
PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
781-762-9210 800-559-9210 TOLL FREE:
bchwholesale@boch.com
E-MAIL:
VISIT US: 391 Boston Providence Hwy Route 1, The Automile Norwood, MA 02062
GENUINE NISSAN PARTS
MAKE ALL THE DIFFERENCE.
Only Genuine Nissan Parts deliver the fit, reliability, and performance to meet your shop’s collision repair needs. So keep it original, and keep it real with Genuine Nissan Parts. Contact these Nissan dealers for all your parts needs: Mastria Nissan 1305 New State Highway Raynham, MA 02767 Direct Toll Free: 800-248-2458 Direct Fax: 508-802-6118 E-mail: parts@mastrianissan.com Web: www.mastria.com
Kelly Nissan of Lynnfield 155 Andover Street Danvers, MA 01923 Toll Free: 800-698-9280 Fax: 781-598-8026 E-mail: BSherman@Kellyauto.com
Kelly Nissan of Woburn 155 Andover Street Danvers, MA 01923 Phone: 781-835-3510 Fax: 781-835-3580 E-mail: mbosma@kellyauto.com www.kellyauto.com
Balise Nissan of Warwick 1350 Post Rd. Warwick, RI 02888 TOLL FREE: 800-992-6220 FAX: 800-254-3544 wparts@baliseauto.com www.BaliseWholesaleParts.com One Call, One Truck for Eleven Brands!
Quirk Auto Dealers 115 E. Howard St. Quincy, MA 02169 Toll Free: 877-707-8475
New England Automotive Report December 2020 17
[NATIONAL] NEWS
AASP/MA President MOLLY BRODEUR Named VicE PREsidENT of AAsP NATioNAl During its semi-annual meeting in late October (this time held via Zoom), the AASP National Board elected AASP/MA President Molly Brodeur to serve as vice president for the 2021-2022 term. “I am honored to serve on the AASP National Board as vice president,” Brodeur says. “As representatives of affiliates from around the country, we are in a unique position to be able to bring a national perspective back to our state Boards. Further, it is a great opportunity to network through our roundtable discussions, which provide a deeper look into what other organizations are doing relative to serving their membership, legislative initiatives, training and strategizing on how to continue to serve our industry at the highest level possible during the COVID-19 pandemic.” Brodeur will serve alongside the other members of the 2021-2022 Executive Board: President – Tom Elder (Alliance of Automotive Service Providers of New Jersey), Secretary/Treasurer – Mike Moehlenkamp (Alliance of Automotive Service Providers of Missouri), Chair of Executive Directors – Amanda Henry (Alliance of Automotive Service Providers of Pennsylvania) and Immediate Past President – Bill Adams (New York State Association of Service Stations and Repair Shops). AASP/MA State Affiliate Report Not surprisingly, the AASP National Board Meeting focused considerable attention on how various state affiliate associations have been addressing COVID-19. AASP/MA Executive Director Evangelos “Lucky” Papageorg reported that business at Massachusetts shops has been down 40 to 60 percent this year compared to 2019, while members have remained diligent in maintaining social distancing and following recommended safety guidelines.
18 December 2020
New England Automotive Report
“I feel that our Governor has done a very good job implementing some of the restrictions and alleviating them where he can. [Members] are doing a great job as far as using the state map to identify the hot spots based on the rate of infection, and recommendations and restrictions fluctuate accordingly.” On the regulatory front, AASP/MA spent this past spring monitoring activities by the Auto Damage Appraiser Licensing Board (ADALB) in regard to Governor Baker’s pandemic-related emergency order restricting in-person contact in the state. Initially, the insurance industry members on the ADALB requested a change in regulations to raise the level at which vehicles had to be personally inspected by an insurance appraiser from $1,500 to $5,000. After considerable debate (including pushback from the ADALB’s collision repair industry members), the proposed threshold was lowered to $3,000 during the Governor’s order, which is still in place as of this writing. “It has wreaked havoc,” Papageorg said of the situation. “e initial estimates are being so poorly written that they stay under that $3,000, and then the shops are expected to write all the supplements, do all the photo taking and do all the appraiser’s work for free […] e insurers don’t want to pay for the photos, the estimate writing and all the administrative charges that are now being thrust upon shops through that type of claim handling.” AASP National was founded in 1999 by a coalition of state and regional organizations representing the industry. AASP affiliates represent over 8,000 automotive businesses in strategic alliances and monitor federal legislation and regulations. For more information, visit autoserviceproviders.com. For more information on AASP/MA, visit aaspma.org. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
Genuine Volkswagen Collision Parts Are a Call or a Click Away. The best repairs start with the best shop-supplier relationship. Contact the following Authorized Volkswagen dealers by phone, fax or email to get the parts you need, when you need them. Mattie Volkswagen 80 William S. Canning Blvd. Fall River, MA 02771 800-678-0914 fax: 508-730-1283
Lia Volkswagen 140 Elm Street Enfield, CT 06083 860-698-6890 fax: 860-265-7840 www.liavw.com
Quirk Auto Dealers 115 E. Howard St. Quincy, MA 02169 Toll Free: 877-707-8475
Mastria Volkwagen 1619 New State Highway Raynham, MA 02767 Toll Free: 888-581-1146 Direct Parts: 508-802-9955 fax: 508-802-9966 email: vwparts@mastria.com www.mastriavw.com
Volkswagen of Hartford 133 Leibert Road Hartford, CT 06120 Direct Parts: 860-543-6012 fax: 860-728-4408 email: ebautista@vwofhartford.com
Balise Volkswagen 525 Quaker Ln. West Warwick, RI 02893 TOLL FREE: 800-992-6220 FAX: 800-254-3544 wparts@baliseauto.com www.BaliseWholesaleParts.com
One Call, One Truck for Eleven Brands!
“Volkswagen“ and the Volkswagen logo are registered trademarks of Volkswagen AG. ©2020 Volkswagen of America, Inc.
New England Automotive Report December 2020 19
[VENDOR AFFINITY PROGRAM MEMBER] SPOTLIGHT By Alana Bonillo
COLUMBIA Ford/Kia
Since day one, Columbia Ford/Kia’s philosophy has been that maintaining a constant commitment to the customer leads to success. is mindset has served the company well for three decades and counting. “It’s not about the volume [of work]; it’s about the quality of service that we give our customers,” states Parts Manager Joe Brochu. “It’s always been about how good we are, not how big we are.” Brochu has been with the company since it started in July 1991. Owners Craig Gates and Roland Toutant purchased a dealership at 234 Route 6 in Columbia, CT, where the company is still based today. ey started out with roughly five employees and things grew from there, including the addition of a warehouse to the dealership to house its wholesale parts operation. Today, the dealership has more than 35 employees working for the parts department alone. Columbia Ford/Kia’s client list has grown largely due to word of mouth. e trend of shop owners communicating and sharing with each other is what led the dealer to cross the border into Massachusetts. Since 2009, it has continued to expand its offerings into the Commonwealth, serving many parts of the state including Worcester and Springfield. Most recently, the operation began serving 20 December 2020
New England Automotive Report
Columbia Ford/Kia is a valued supporter of AASP/MA.
shops as far north as Winchendon. Columbia Ford/Kia has a fleet of 18 delivery vehicles that travel both states to deliver parts. Committed to making deliveries to customers as soon as they open their shop doors, the Columbia delivery crew starts packing up orders as early as 3:30am and works to have the wheels of the trucks turning by 5:30am to ensure they hit shops in Massachusetts nice and early. e parts team also provides what Brochu calls “unattended delivery,” leaving the parts and invoice where requested as per the shop to comply with social distancing. “We work it so that once a customer places an order – whether it’s through CollisionLink, phone, email or text – they don’t have to worry about it. It’s in our hands; if there are any issues, we will get a hold of them. We make it easy on them so they can get back to work.”
is goal is achieved thanks to a solid team of professionals, many of whom have been with the company for a decade or two (or even longer). Along with Brochu, Fixed Operations Manager Hogan Krohn has been with the company since it began. Other principal members include Wholesale Parts Manager Rusty Deskus and Administrative Parts Manager Bob Smith, while Brochu’s son Nick serves as operations manager. Outside sales representatives Larry Pearson and Nick Zlotnick visit shops regularly to make sure they have everything they need and resolve any issues right on the spot. Another long-term employee, Doug Hoyle, is an inside sales representative who has been with Columbia for 25 years. Paul Postler, TJ Tomaszek, omas Harper, Lou Morales and Suzie Fanchier round out the inside sales team.
Continued on page 34
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YES Please list my business as an AASP/MA member in good standing on the AASP/MA website for consumers to consider using for the collision repairs and assistance with the claims process. I understand this is a member benefit (_________ initials Date ___/____/2020) !
!
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! New England Automotive Report December 2020 21
[COVER] STORY By Joel Gausten
A POSITION OF STRENGTH:
AASP/MA FALL MEMBERSHIP Meeting Recap
Many things in the collision repair industry have slowed in 2020, but AASP/MA isn’t one of them. Utilizing Zoom to connect with members virtually, the association hosted its Axalta Coating Systems-sponsored Fall Membership Meeting in late October for one of the liveliest and indepth gatherings of the year. In addition to an extensive presentation on the Massachusetts Labor Rate by Richard and Sam Valenzuela of National AutoBody Research (see the AASP/MA Feature on page 28), AASP/MA Executive Director Evangelos “Lucky” Papageorg launched the meeting with an overview of the association’s activities over the last several months. Not surprisingly, AASP/MA has worked extensively in support of Senate Bill 182, which aims to move the Auto Damage Appraiser Licensing Board (ADALB) from the Division of Insurance to the Division of Professional Licensure. e bill’s purpose aligns with Governor Baker’s executive order “to ensure proper review of the regulation of professional licensing by independent boards.” Additionally, the bill seeks to expand the size of the ADALB by two 24 December 2020
New England Automotive Report
members, both appointed by the Attorney General, and replace the current Board chairman, appointed by the Massachusetts Commissioner of Insurance, with one appointed by the Commissioner of the Division of Professional Licensure (who has no affiliation with insurance or automotive collision repair). “We’ve been concentrating on this particular bill because, as we all know, if the [Labor] Rate even went up a couple of dollars, all of a sudden insurance companies will be telling their appraisers, ‘We don’t pay for this or that anymore.’ It’s important that we have a place where grievances can be aired, and that place is the ADALB – but not where it’s currently housed. “e [ADALB] was developed as a consumer protection group,” he added. “e consumers really don’t have a voice on that Board, and that’s what we’re pushing for […] We need to continue to promote the fact that this is a consumer protection bill and why it’s so important that consumers get a voice on this particular Board.”
Papageorg referred attendees to the AASP/MA website (aaspma.org), which features an area devoted to the legislation. is special Senate Bill 182 portal includes documents being used by members to make presentations to lawmakers, letters of support from senators and an outline for members to reference when they contact legislators (or their aides) to encourage their support. ese political leaders can be searched on the website via zip code. “We’re all aware that the main concerns of our Legislature right now are the budget deficit, the COVID-19 issue and police reform. We’re trying to get in there as part of that discussion. It’s going to be a real challenge, but the more people they hear from, the better off we’ll be.” With the end of the current legislative session in sight, AASP/MA has committed to continuing its support of the bill into 2021 and beyond if necessary. “We need to get many of [these legislators] supportive of us when we refile the bill. What that will do is help it go through much quicker in the next legislative session.”
With the end of the current legislative session in sight, AASP/MA has committed to continuing its support of Senate Bill 182 into 2021 and beyond if necessary.
Papageorg also encouraged members to list their shop information in the membership directory on the AASP/MA site. “We’re going to be pushing consumers to look for the association logo [at body shops]. We’re going to start doing some promotion of AASP/MA; hopefully, that will lead to more people coming to the AASP/MA shops.” AASP/MA would like to thank the companies in the AASP/MA Vendor Affinity Program (VAP) for their continued support throughout 2020. A full list of VAP Sponsors is available on page 31.
PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
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New England Automotive Report December 2020 25
Get it right
from the source.
Ford and Lincoln Mercury dealers are the one-stop source for all of your collision repair needs. When you need fascias, grilles, headlamps, wheels or any other Ford Motor Company Ge uine Part, call your local wholesaling dealership. They’re a great souce for technical and repair information as well. Using Genuine Parts can help your body shop reduce cycle time, improve relationships with insurance companies and satisfy customers. So get everything you need in just one call to your one-stop collision repair resource – your local Ford or Lincoln Mercury Dealership.
Contact these Ford or Lincoln Mercury dealers for all your parts needs: Imperial Ford
Sarat Ford Lincoln Mercury
Quirk Auto Dealers
6 Uxbridge Road
245 Springfield Street
115 E. Howard St.
Mendon, MA 01756
Agawam, MA 01001
Quincy, MA 02169
Toll Free Parts: 877-272-0332
413-786-0430
Toll Free: 877-707-8475
Toll Free Fax: 877-800-6316
Fax: 413-789-3715
Call us for your wholesale parts needs
www.saratford.com
Balise Ford of Cape Cod 90 High School Rd. Ext. Hyannis, MA 02601 TOLL FREE: 800-992-6220 FAX: 800-254-3544 wparts@baliseauto.com www.BaliseWholesaleParts.com
© 2019, Ford Motor Company
26 December 2020
New England Automotive Report
New England Automotive Report December 2020 27
[AASP/MA] FEATURE By Joel Gausten
LABOR RATE: Facts, Fiction and the Future
Part 2
Who will truly lead the charge for Labor Rate reform in Massachusetts? It certainly won’t be the insurance industry, nor will the decision really be made by the shops. At the end of the day, the consumer will be the key to more realistic rates in this state. is was the ultimate message shared during a special presentation by Richard and Sam Valenzuela of National AutoBody Research (NABR) at AASP/MA’s recent virtual Fall Membership Meeting. For years, independent repairers in Massachusetts and beyond have argued that concessionary rates paid to referral or program facilities should never be factored in when insurers or other entities determine true market Labor Rates. Now, thanks to extensive research by NABR based on survey results and documents it has received from the AASP/MA community, the legitimacy of that position has never been more obvious. e Genie’s Out of the Bottle In last month’s New England Automotive Report, we shared some results from AASP/MA’s Labor Rate Survey through NABR, which gathers genuine posted door/retail Labor Rate information from shops based on their non-concessionary insurer and customer-pay work. Now, one month later, the survey results continue to intrigue and inspire: As of late October, the average posted body Labor Rate in Massachusetts was $57 based on information submitted by 362 participating shops. is is considerably higher than the $46 average posted body Labor Rate reflected in the survey information from October 2017, when only 11 Massachusetts shops participated. e dramatic increase in both the average posted body rate and the number of shops that have contributed information is the direct result of AASP/MA and NABR promoting the survey throughout Massachusetts for more than 18 months. Of course, listing a posted rate in a survey and actually getting it in the real world are two separate things. Fortunately, there is good news in that arena as well. As discussed in last month’s issue, NABR’s BillableGenie platform offers a searchable database of what repairers across the country report in regard to what procedures they are being paid for by consumers and insurers for non-referral/program work. With more than 7,000 repair and payment records submitted to the system by repair shops nationwide, BillableGenie has served as a critical way for shops to better inform consumers of needed repairs and push back against insurers that refuse to pay a shop’s posted rate or negotiate on required/recommended operations. As of the Fall Membership Meeting, nearly 1,600 repair and payment reports – offering solid evidence of over 1,800 procedures that have been paid by either consumers or among 74 auto insurers in Massachusetts – had been submitted to BillableGenie by AASP/MA alone. 28 December 2020
New England Automotive Report
Additionally, these shops got paid for these procedures a whopping 19,471 times. e average paid composite consumer/insurer rate reflected in these 1,500-plus documents came to $45.32 – much higher than the current average insurer-paid rate of $38.28 (according to Mitchell’s 2018 Industry Trends Report). It gets even better. Of the total submitted documents, 572 show that insurers and consumers paid an average body Labor Rate of $46 or more, with an average rate of $53.74. Two-hundred and twenty documents showed a rate of more than $54, with the average of this batch coming out to $59.98. Seventy-one submitted documents showed that insurers and consumers paid $60 or more, with the average coming out to $69.85. ese are not just wish list figures – these are amounts being paid today by insurers and consumers in Massachusetts and tracked through submissions to BillableGenie. “Consumers pay posted rates all day long, all over the country,” offered Sam. “at’s proof that the marketplace accepts your rates and prices.” “ose documents are worth gold,” commented AASP/MA Executive Director Evangelos “Lucky” Papageorg during the Fall Membership Meeting. “e documents are saying, ‘Look, based on this claim and on this date, that insurance company – the one that’s refusing to pay you – is basically discriminating against you because it paid it here, here and here.’ ere’s no arguing against it. ere are appraisers who’ve been shown these things, and they say, ‘I didn’t know they paid for that!’ [e shops] get paid.” “Nobody can control you in the free market,” stressed Richard. “If you guys respond freely to do what is best for your shops individually, you will begin to set rates in a free market aggregately. at will begin to move the needle, and that has already started.” A New Labor Rate Hero In addition to BillableGenie and its national Labor Rate Survey, NABR now offers Labor Rate Hero (laborratehero.com), a free website for consumers and shops that offers what Sam called “Labor Rate price transparency” by providing a zip code-searchable database of shops’ posted rates (including the last time these facilities updated their
information through the Labor Rate Survey) across the country. Off-market concessionary rates are not included. “When you drive by a gas station, its sign is out by the corner,” Sam explained. “at means everybody can see the price. at’s important for a free market economy to work properly […] None of these [numbers on Labor Rate Hero] say $37.50, $40 or $42, which insurers are claiming as the ‘prevailing rate’ in the area. I don’t know who’s charging those prices, because those numbers don’t show up […] Now, you have real data to prove what collision repair labor really is in your area.”
impact on forming a picture of the true marketplace. “is is not the place where you put in the rate you wish you had,” Richard insisted. “is is where you put in the rate that you’ve actually got posted for your labor in your shops.” By continuing their work with NABR, AASP/MA members will ultimately illustrate just how false and economically hazardous the average insurer-paid Labor Rate is in this state and provide data on rates that better reflect the true free auto body repair market. As Sam observed during his meeting presentation, “I suspect customers think collision repair labor is a bargain compared to the other things like it that they come across. Here in Phoenix [where NABR is headquartered], a bicycle repairer right up the road from me is $75 an hour; the lawnmower repair shop down the street from me is $80 an hour.” “When insurers are not reimbursing their policyholders the free market rate, the customer is forced to pay the difference or – as has been done for years in the collision industry – the shop absorbs it,” added Richard.
e Next Steps Although the numbers presented by NABR offer a realistic breath of fresh air, they will accomplish very little unless more AASP/MA members take part in BillableGenie and the Labor Rate Survey. Also, it is critical for shops to continue focusing their attention on including customer-pay rates on their estimates. Shops can always negotiate up or down from that point, but the posted rate data inputted into the Labor Rate Survey needs to be accurate in order to have any substantial
“at has been killing the shops in this industry […] Don’t fall prey to the myth that volume is going to make you profitable. Volume at a deficient gross profit margin will put you out of business.” And what about the myth that the customer should be shielded from having to go out of pocket when their insurer fails to fully indemnify them? Meeting attendee Fred Jennings, an economist who has studied the collision repair industry since the mid-’90s, offered some powerful food for thought on that topic. “When you’re dealing with a customer and the reimbursement isn’t covering the full invoice, emphasize to that customer that if their insurer isn’t paying them the full price of that invoice when they should be, then maybe they ought to think about switching to a different insurer. at’s going to hit the insurers where they live.” Look for Part ree of this series in next month’s New England Automotive Report. AASP/MA’s Labor Rate Survey can be taken at nationalautobodyresearch.com. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
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SARAT FORD, WHERE CUSTOMERS BECOME FRIENDS! New England Automotive Report December 2020 29
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VENDOR AFFINITY PROGRAM
SPONSORS
MASSACHUSETTS
DIAMOND LEVEL
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AASP/MA
SPONSORS New England Automotive Report December 2020 31
32 December 2020
New England Automotive Report
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New England Automotive Report December 2020 33
Page 1
[VENDOR AFFINITY PROGRAM MEMBER] SPOTLIGHT
Continued from page 20
Quality Repairs Start With Volvo Genuine Parts. For over eight decades, the Volvo name has been synonymous with unmatched quality and performance. that legendary Volvo quality starts with Volvo Genuine Parts.
Rely on Volvo Genuine parts to get the right fit, at the right price, right now. Please contact the following dealers for your Volvo parts needs: Prime Volvo Cars 1030 Hingham Street Rockland, MA 02370 Parts Direct: 781-927-3520 Fax: 781-927-3592 www.volvocarssouthshore.com
Volvo of Wellesley 962 Worcester Street Wellesley, MA 02482 Parts Direct: 800-247-3033 Fax: 508-651-1220 www.volvoofwellesley.com
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“Every person in the department plays a role in making it all successful.” Columbia Ford/Kia truly recognizes that it is important to give back to customers, and it has developed a number of fun and interactive ways in which to do so. is includes a bi-monthly newsletter through which Columbia conducts raffles, giving away prizes such as a BBQ grill during the summer months and a snow blower during the winter months. For the past 20 years, they have been hosting annual summer promo events where they bring customers together for a celebration and raffle prize giveaway. Customers receive a raffle ticket per every $1,000 they spend on parts, and the company gives away roughly $15,000 in prizes. “We try to make it so that every shop is guaranteed to walk out with something.” Further showing support to Massachusetts customers, Columbia Ford/Kia has been a longtime supporter of AASP/MA and has been actively involved with many events, including the annual Golf Outing. Most recently, it came on board as a Silverlevel sponsor in the AASP/MA Vendor Affinity Program (VAP). “We know the association is important to the shops – our customers. If it’s important to them, then it’s important to us.” Above all, Columbia Ford/Kia strives to always live up to its motto: “We’re only as good as our last delivery.” “is is on all our trucks,” Brochu says. “We firmly believe we cannot rest on our laurels – we need to perform at our best every time.” PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
34 December 2020
New England Automotive Report
Make Quality Your Goal.
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HYUNDAI IS PROUD OF ITS REPUTATION FOR QUALITY AND SERVICE. SO ARE THE DEALERS AND BODY SHOPS WHO RELY ON GENUINE HYUNDAI PARTS. TO MAKE CERTAIN THAT YOU GET THE RIGHT HYUNDAI PART, ASK FOR A HYUNDAI WHOLESALE PARTS SPECIALIST.
For Genuine Hyundai parts, contact an Authorized Hyundai Dealer. HERB CHAMBERS HYUNDAI 735 Southbridge Street Auburn, MA 01501 TOLL FREE: 800-767-1898 FAX: 508-832-6026 EMAIL: pobrien@herbchambers.com www.herbchambershyundaiofauburn.com
BOCH HYUNDAI 391 Boston Providence Hwy Route 1, The Automile Norwood, MA 02062 PARTS LINE: 781-762-9210 TOLL FREE: 800-559-9210 bchwholesale@boch.com
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Contact these select dealers for assistance and delivery of your Kia Genuine Parts. Bald Hill Kia 1021 Bald Hill Road Warwick, RI 02886 Parts Direct: (800) 822-3015 www.baldhillkia.com Quirk Auto Dealers 115 E. Howard St. Quincy, MA 02169 Toll Free: (877) 707-8475
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New England Automotive Report December 2020 35
[LEGAL] PERSPECTIVE By James A. Castleman, Esq.
Does the Labor Rate Matter? e bad news is that insurers pay lower hourly Labor Rates for collision repairs in Massachusetts than in any other state in the country. As has been explained in this column before, insurers in Massachusetts have been under unusual pressure for many decades to keep hourly Labor Rate payments low. is first was the case when the Commissioner of Insurance set the premium rates that auto insurers could charge and held yearly hearings on those premium rates. As part of those hearings, and in order to avoid being penalized on the premiums that they could charge, insurers had to establish that they were taking steps to keep repair shop Labor Rate payments as low as possible under so-called “cost containment” regulations. When the Commissioner stopped setting auto insurance premiums several years ago, insurers continued to be pressured to pay low rates for collision repairs as the result of performance standards issued by Commonwealth Automobile Reinsurers (CAR), a quasi-governmental industry oversight organization made up of and controlled by the insurance industry. Despite this history, the good news is that the actual cost of an insured auto damage repair in Massachusetts is, on average, in line with the cost of similar insured auto damage repairs in the rest of the country. How can this be? After all, no matter in what part of the country a repair is made, it is still necessary to perform the same operations, replace or repair the same parts and spend the same amount of time to make the repairs. So, if insurers are paying less per labor hour to make those repairs, how can the repairs still cost the same?
e Answer Part of the answer is that, no matter what an insurer pays for an hourly Labor Rate, collision repair shops still need to get paid a certain bottom line amount in order to make a profit on any particular repair. After all, if shops were losing money on every repair, then they would not be able to stay in business for very long. Another part of the answer is that insurers know that repair shops need to be able to get paid enough to properly repair damaged vehicles no matter what pressure there may be on those carriers to keep hourly Labor Rate reimbursements low. Insurers also need to make sure that there are enough repair shops still in business in this state in order to make sure that their insureds are able to get their cars repaired. As a result of these factors, collision repair shops in Massachusetts have learned to become ardent and educated negotiators of the cost of repairs. And at least to some degree, insurers and their appraisers have accepted what the repair shops have been doing. One example of repair shop creativity has been reflected in how shops in Massachusetts have been able to get insurers to pay for P-Page allowances to a much greater degree than shops in many other states. Similarly, many repair shops have been able to negotiate for pre- and post- repair scans or for other OEM-specified repair procedures – none of which are covered by the CAR cost containment performance standards. Yet, another example is that repair shops in Massachusetts often have been able to convince insurance appraisers to pay for more time to
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make certain repairs than otherwise may be requested or allowed: Is it a four-hour dent or an eight-hour dent? If an insurer agrees to pay for eight hours of repair at, say, $40 dollars per hour, it ends up paying the same amount as it would have if it allowed for only four hours of repair at $80 per hour. î &#x201C;e repair shop may believe that it needs only four hours to make the repair but also needs to get an average of $80 an hour in order to make a profit for the entire repair. Meanwhile, the insurance appraiser may recognize that it may take only four hours to make the repair, but they know that they are authorized to pay only $40 per hour and that amount wonâ&#x20AC;&#x2122;t cut it with the shop. In the end, both sides are okay with the result of their negotiations so long as the bottom line is a number that everyone can accept and the insurerâ&#x20AC;&#x2122;s appraisal reflects a $40 per hour Labor Rate. Is î&#x20AC;&#x201A;is Legal? Is it legal for collision repair shop appraisers to ask for more time to make a repair than they know the shop needs and to accept a lesser Labor Rate for the repair than they know the shop needs? Is it legal for an insurance appraiser to allow for more time to make a repair than the appraiser believes is really needed, knowing why the shop is asking for more? î &#x201C;e answer is: Yes â&#x20AC;&#x201C; so long as the negotiated amounts are reflected on the insurance appraiserâ&#x20AC;&#x2122;s appraisal. î &#x201C;at being said, it is also legal (so long as a referral shopâ&#x20AC;&#x2122;s contract with its referring insurer doesnâ&#x20AC;&#x2122;t prohibit it) if the shopâ&#x20AC;&#x2122;s own appraisal, repair order and final bill all show that the shop is actually charging for less time to make the repair but at a higher Labor Rate. While Auto Damage Appraiser Licensing Board (ADALB) regulations require insurance appraisers and shop appraisers to â&#x20AC;&#x153;attempt to agreeâ&#x20AC;? on the
estimated cost of repairs, the regulations do not require that they always get there the same way. While neither side can modify a published estimating manual or system without prior negotiation, there is nothing preventing the parties from negotiating a modification of the manual or estimating system. And once they do, there would be no reason for the ADALB to even think of penalizing a repair shop that Collision repair shops prepares its own appraisal that in Massachusetts shows a lower repair time than negotiated with the insurer if the have learned to shop appraisal and insurance become ardent and appraisal end up showing the educated negotiators of same actual cost for the repair. the cost of repairs. Further, if a particular repair time is a discretionary one that is not actually specified by an estimating guide or system, then there is no published manual or estimating system to modify. Whatever the parties negotiate for a bottom line for that repair is acceptable, no matter what each party shows on its appraisal and no matter how the repair shop shows it got there on its work order and final bill. Even If It Is Legal, Should It Be Done? î &#x201C;ere is little doubt in my mind that most repair shops regularly negotiate for longer repair times at a lower hourly Labor Rate than they know they really need to get in order to avoid going out of business. Perhaps shops have little choice but to do so, knowing that most other
Continued on page 40
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Bernardi Toyota 1626 Worcester Road Framingham, MA 01702 Parts Direct: 800-248-3033 FAX: 508-879-7895 IRA Toyota Danvers 161 Andover Street Danvers, MA 01923 PH: 800-774-8411 ext.1 Direct: 978-739-8306 FAX: 978-739-8098
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[LEGAL] PERSPECTIVE Continued from page 37
repairers are caving in to insurer-dictated Labor Rates and that they may lose business to other shops – especially insurer referral ones – if they do not play along with Massachusetts auto insurers. But is it in the collision repair industry’s – or even the insurance industry’s – best interest for this to be happening? It may not be. For one thing, so long as repair shops continue to accept the insurer-set Labor Rates, the Labor Rates that insurers set are never going to increase. After all, why should they? If the vast majority of shops are accepting those rates, why should insurers, out of the goodness of their hearts, voluntarily raise them? When you go to the grocery store and something is priced at $1, do you voluntarily decide to pay $1.10 when you are checking out? Of course not. By the same token, there is no incentive for insurers to decide on their own to pay a higher Labor Rate. For another thing, it may be in both the collision repair industry’s and the insurance industry’s economic best interests for insurers to be paying a more realistic Labor Rate and for both industries to stop playing the contentious negotiating game that goes on here. If insurers paid a higher Labor Rate, would there be less necessity to negotiate
repair times and other aspects of a repair? Would fewer supplemental appraisals be needed, leading insurers to save money on what they pay their appraisers who would not have to keep coming back to shops? Would insurers save money on substitute transportation costs because cycle times would decrease? Would Massachusetts repair shops have to spend less time and energy negotiating standard repair procedures? For a third thing, what is going to happen as auto repairs continue to involve more part replacement operations than actual repair? Parts prices are pretty much set by whatever price the supplier is quoting, and parts replacement times are largely governed by repair manuals and estimating systems. What is going to happen is that repair shop profits are going to plunge, since the hourly Labor Rate will be stagnant while parts prices and replacement times cannot be effectively negotiated. And once that happens, there may not be enough repair shops left to repair all of the damaged vehicles in this state. Insurers in Massachusetts have felt pressured for decades, first by the Commissioner of Insurance and then by CAR, to pay the lowest hourly Labor Rate that they can get away with, even if the insurers may not have truly felt that it was in their longterm best interests to do so. But the negative
effects of that pressure may continue to significantly hurt the collision repair industry, the auto insurance industry and the motor vehicle owners of Massachusetts in ways that were not foreseen or intended. Conclusion Does the hourly Labor Rate matter? Some may argue that it does not, since Massachusetts collision repair shops have historically been able to mostly work around the unrealistic low-ball rates insurers here dictate. But in my opinion, the Labor Rate insurers pay does matter, and something needs to be done to get those rates to realistic levels in Massachusetts. Whether shops are able to hold their ground as they raise their rates, the Labor Rate Bill that AASP/MA has sponsored gets enacted or someone comes up with new ways to get it done, something truly needs to happen. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
Attorney James Castleman is a managing member of Paster, Rice & Castleman, LLC in Quincy, MA. He can be reached at (617) 472-3424 or at jcastleman@prclawoffice.com.
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