AASP-MN News October 2022

WELCOME NEW MEMBERS! SEPTEMBER 2022

NAPA Auto Parts, St. Cloud, MN

NAPA of Aberdeen, SD

NAPA of Alexandria, MN

NAPA of Barnesville, MN

NAPA of Belgrade, MN

NAPA of Braham, MN

NAPA of Cambridge, MN

NAPA of Detroit Lakes, MN

NAPA of Eagle Bend, MN

NAPA of Ellendale, ND

NAPA of Fargo, ND

NAPA of Fergus Falls, MN

NAPA of Foley, MN

NAPA of Grand Forks, ND

NAPA of Hillsboro, ND

NAPA of Huron, SD

NAPA of Huron Truck, SD

NAPA of Little Falls, MN

NAPA of Long Prairie, MN

NAPA of Melrose, MN

NAPA of Menahga, MN

NAPA of Milaca, MN

NAPA of Miller, SD

NAPA of Mitchell, SD

NAPA of Mobridge, SD

NAPA of Moorhead, MN

NAPA of Morris, MN

NAPA of Osakis, MN

NAPA of Paynesville, MN

NAPA of Pelican Rapids, MN

NAPA of Perham, MN

NAPA of Pierre, SD

NAPA of Pierz, MN

NAPA of Princeton, MN

NAPA of Redfield, SD

NAPA of Richmond, MN

NAPA of Sauk Centre, MN

NAPA of Staples, MN

NAPA of Wadena, MN

NAPA of Wahpeton, ND

NAPA of Watertown, SD

NAPA of West Fargo, ND

NAPA of Willmar, MN

Electric Vehicles

By Mike McLynn, AASP-MN Mechanical Division Director

When I think about what is changing in the automotive industry, one of the first things that comes to mind is electric vehicles (EVs). The thought of having to learn this new area of repair work weighs heavy on my mind (not just for my shop, but for so many small independents), and at the same time, I am optimistic about how the industry is moving forward. It seems we are entering a new segment of the electric vehicle timeline. We are no longer in the time when they were new, expensive, inconvenient and novel. They are now much more common, practical and clearly here to stay.

There have been shops specializing in fixing these vehicles for years, but now the market is opening more for independent shops to begin integrating electric vehicles in their standard rotation of work. Many of these cars have been on the road long enough to be ready for tires, brakes, blower motors and other typical maintenance work. No, we aren’t to the point where every shop needs to learn how to manage powering

down and removing batteries. But we certainly are at a point of opportunity.

The previous owner of my shop (Bruce Lestico) saw fuel injected engines as just the sort of opportunity that I see with EVs. He knew they were the future, so he decided to proactively learn how to work on them before the competition. Bruce is now long retired, but now we almost only work on fuel injected engines and all sorts of other parts that make up today’s highly computerized cars. His forward-looking strategy certainly put us in a position for the lasting success we have today.

As an AASP-MN member and leader, I’m excited to see more shops taking on EV work and optimistic about the number of shops that will soon be doing standard EV repairs. I’m looking forward to learning more from AASP-MN about ways to start working on EVs, too!

Back to Basics

by Sam Richie & Shannon K. Mitchell, AASP-MN Lobbyists

Fall is in full swing, and students are back at school, no doubt reviewing and learning foundational concepts. It’s also a good time for the industry to ground itself (and, most importantly, customers) in the most basic legal rights regarding auto repairs and insurance claims. Many of us are familiar with some or all of these rights but may not have the statutory language handy to cite.

The following is a non-exhaustive list of some of the most essential rights consumers have and the responsibilities required of auto insurance providers*. Of course, we know these statutes are not always followed, but they are the tools we currently have in dealing with insurance providers. Here you will find specific citations to the law as well as steps AASP-MN is taking to address these instances, along with opportunities for you to get involved.

Right to choose a vendor (prohibition on steering)

Insurance companies cannot require their policyholders to use a suggested repair shop or choose from an “in-network” provider. They cannot refuse coverage or advise against services at a particular shop, a practice known as “steering.” In fact, they have to notify policyholders that they have the right to select any shop. Once it is clear the policyholder has chosen a shop, the insurance company must stop making any effort to influence the policyholder’s choice of a repair shop.

-Minnesota Statute 72A.201 REGULATION OF CLAIMS PRACTICES see Subd. (6) section (7)

Right to repair

Policyholders have a right to have their vehicles repaired to pre-accident condition, regardless of the repair shop they choose (see above). Pre-accident condition includes both “obvious and hidden damage

continued on pg. 10

Minnesota Careers in Auto Repair & Service (MNCARS) & AASP-MN Connect with Students

AASP-MN Monthly Morning Meetup Via ZOOM

AASP-MN Executive Director

Linden Wicklund will host an open format ZOOM session each month for members to come together, network, swap ideas and ask questions! This ongoing opportunity to connect is designed to be a welcoming space for new ideas and everyday challenges alike.

DATE & TIME: Third Thursday each month, 9am - 10am LOCATION: Your computer ATTENDEES: All AASP-MN members – this means anyone on your team!

TOPIC: Open forum! This is your time to make it what you need. We hope you can join in!

School is back in session and so are in-person career fairs! If you are interested in presenting in a classroom or having a booth at a career fair, MNCARS can send you all the materials you need.

On September 19, AASPMN member Scott Merschman (Kenny’s Clark & Goodyear; Bemidji) represented MNCARS and the automotive industry at the Bemidji Career Academies Career Fair. More than 60 area businesses were able to interact with students while they had a chance to try out many career areas and consider what their futures may hold after graduation.

About MNCARS

On September 21, AASP-MN member Dan Sjolseth (Superior Service Center; Eagan) attended the DCTC Automotive Program Fall 2022 Career Fair to market job opportunities within member shops to current students. Volunteers share both the full member list information with students and help network them with specific shops who are a good fit. If you are looking for student level employees, let us know!

Reach out for more information - we would love to help get you in front of schools and future employees!

MNCARS is a non-profit organization established in 2016 by AASP-MN. Its sole purpose is to promote careers in the automotive industry, recruit young people into the state’s college-level automotive service and collision repair programs and, ultimately, into industry workplaces. To further those efforts, MNCARS regularly participates in events like the recent Career Academies Career Fair and DCTC Automotive Program Fall 2022 Career Fair. Thank you to Scott Merschman (Kenny’s Clark & Goodyear, Bemidji) and Dan Sjolseth (Superior Service Center, Eagan) for your time and effort!

Take advantage of the resources in the MotorMouth toolbox at carcareers.org/motor-mouth. Get out and get active in your local community promoting industry careers!

Thank You 2022 Sponsors

Platinum Sponsors

LKQ Minnesota Lube-Tech

Gold Sponsors

AASP National Auto Value /APH CBIZ

Elite Worldwide FinishMaster United Fire Group

Silver Sponsors

3M Automotive Aftermarket aaa Auto Parts Aramark Axalta Coating Systems Colonial Life Dentsmart PDR Enterprise Rent-a-Car Heartman Insurance NCS/Single Source O’Reilly Auto Parts

PAM’s Auto PPG Sherwin-Williams Shop Monkey Suburban Chevrolet

Bronze Sponsor

C.H.E.S.S

Mobile Repair Growth

Mobile repair currently represents only a small portion of the Do-It-For-Me (DIFM) market, but it is growing at an explosive rate. As the DIFM light vehicle market plunged during 2020 and rebounded in 2021, mobile repair grew many times faster than the overall DIFM market, unhindered by the onslaught of COVID-19.

Mobile repair’s rapid growth is based on a combination of consumer and technical factors.

Small but Growing Volume

Although mobile repair represents a small share of the total car and light truck aftermarket market in the U.S., it is racking up impressive annual growth.

The product sales of mobile repair more than doubled between 2016 and 2021, achieving an annual growth rate over 15 times that of the total light vehicle DIFM market.

More Mechanics Join the Mobile Market

The number of mechanics employed in mobile repair (full and part-time) more than doubled between 2016 and 2021.

Mobile repair is attractive to many mechanics because of its flexibility and rapid expansion. At a time when service bays nationwide are declining, mobile repair offers mechanics an opportunity to supplement their incomes on a part-time basis or migrate to a full-time job in mobile repair.

Mobile Repair Market Momentum

COVID-19 cut deeply into Do-It-For-Me (DIFM) volume during 2020, forcing a double-digit plunge in light vehicle product volume.

Repair outlets rebounded last year with a historic surge in product sales. However, they failed to recover fully from the plunge in 2020 volume, and most DIFM outlets recorded lower sales in 2021 than two years earlier.

In sharp contrast, mobile repair achieved substantial product increases in both 2020 and 2021, and last year its sales towered more than 50 percent higher than in 2019. The rapid addition of full and part-time mechanics boosted mobile repair’s sales capability during 2020 and 2021.

As the number of service bays operated by repair outlets declined between 2019 and 2021, the number of full and part-time mechanics working in mobile repair surged by more than 35 percent.

Generational Differences

Generations Y and Z represented a greater proportion of mobile repair sales during 2021 than they did across the total DIFM market. The opposite was true of Baby Boomers (and those born earlier), who accounted for a larger portion of the total DIFM market than they did for mobile repair volume.

Mobile repair has significant appeal to several key buying preferences of Gens Y and Z: a greater inclination to purchase online rather than in face-to-face transactions, and little interest in a personal relationship with a repair outlet.

In contrast, Baby Boomers prefer face-to-face transactions and are more likely than Millennials and Gen Xers to seek a personal relationship with repair outlets.

Overcoming Disruption Barriers

Mobile repair has overcome three factors that have long protected the auto repair market from disruption: the need for hands-on mechanical diagnosis, getting needed parts at the repair outlet on time and the personal relationship between car owners and repair outlets.

The use of big data and artificial intelligence are making it easier to diagnose vehicle issues remotely. Mobile repair operations are improving remote diagnosis by applying artificial intelligence to the data bases of vehicle symptoms that they are developing.

Advancing technology has made it easier to get needed parts to repair outlets on time, and the changing values of younger generations have reduced the significance of personal relationships between car owners and repair outlets.

Implications for o2o Growth

The ability of mobile repair to grow within the overall DIFM market and the increased willingness of consumers to purchase auto repairs online are strong indications of the tremendous growth potential of o2o (online to offline) transactions in the car and light truck DIFM market. This is the most significant message of the expanding mobile repair phenomenon.

Greater Potential of o2o Auto Repair

o2o auto repair has much greater potential growth in the light vehicle aftermarket than mobile repair because o2o auto repair can be sold by eCommerce platforms, such as Amazon, to millions of households and offered at tens of thousands of brick-and-mortar outlets in their approved repair network.

o2o Impact

o2o auto transactions will increasingly alter how consumers purchase auto repair, where repairs are performed and how auto parts reach DIFM outlets.

Six Major Takeaways

• How consumers decide where and when to have their vehicles repaired is changing due to advancing technology and the different values of emerging consumer generations.

• Auto repair in the U.S. has long been protected from disruptions by three factors: the need for mechanical diagnoses, getting needed parts to the repair outlet on time and the importance of personal relationships between car owners and repair outlets. Technology innovations and the evolving generation mix of consumers are reducing the significance of these barriers to disruption.

• Mobile repair in the U.S. has dramatically outperformed the overall DIFM market over the past five years, particularly in 2020 and 2021.

• Millennials and Gen Xers make auto repair decisions very differently from older consumers, particularly regarding online activities.

• o2o (online to offline) auto repair will change how

Two Great Companies. One Great Program.

ESTIMATING

TIPS

All Three Systems: R&I Glass and Regulator for Door Skin Replacement

CCC – P Pages for Outer Panel R&R Replacement does not include glass & regulator.

Mitchell – P Pages for Door Repair Panel R&R not included operations: Remove and install or replace glass, hardware, mirror and channels.

Audatex – Audatex DBRM Door Outer Repair Panel Page 81 includes: Door Glass R&I/Vent Glass R&I.

All Three Systems: Clearing Customer Data NOT INCLUDED

CCC – DEG Inquiry 20794: “After review of your concern, this is not a MOTOR supported operation. The estimated work time for clearing data would need to be an on-the-spot evaluation mutually agreed upon by estimators.”

Mitchell – DEG Inquiry 20795: “Mitchell does not account for clearing data regarding navigation, HomeLink garage door settings or cell phone connectivity in any published labor allowance.”

Audatex – DEG inquiry 20793: “We have reviewed your inquiry. Audatex does not provide a labor operation for clearing data from the vehicle. Due to the amount of factors that can be involved depending on how the data is stored, it is not possible to define a standard labor time for this operation. The time should be added manually by the estimate preparer. No changes warranted at this time.”

Final DEG note: Always reference each database vehicle chapter footnotes or Labor Report (Audatex only) to verify if the operation is included or excludes specific operations which override general P-Page logic.

LEGISLATIVE UPDATE

continued from pg. 5

incurred by the claim incident.” - Minnesota Statute 72A.201 REGULATION OF CLAIMS PRACTICES see Subd. (6) section (2)(b)

In addition to the right to have a vehicle repaired to pre-accident condition, insurance companies cannot require the use of “aftermarket” parts and must cover the replacement of “original equipment manufacturer” parts (“OEM”). -Minnesota Statute 72A.201 REGULATION OF CLAIMS PRACTICES see Subd. (6) section (7)

Right to inspection

Policyholders have a right to have an agent conduct an in-person vehicle inspection and do not have to do this at an insurance drive-in center. The holder can request this inspection be done at the auto shop. -Minnesota Statute 72A.201 REGULATION OF CLAIMS PRACTICES see Subd. (6) section (4)

AASP-MN opportunities for redress

AASP-MN is tackling instances of these (and other) statutes not being followed in multiple ways. Several actions include collecting and documenting instances of these statutes not being followed and working with the Department of Commerce to pursue potential enforcement actions against the most frequently offending companies. AASP-MN and its member-led committees are also in the process of refining the legislative agenda for the 2023 session to include proposed legislation for strengthening the statutes.

Candidates for all 201 state House and Senate seats are currently in full campaign mode and are motivated to connect with constituents and potential voters. They want to be seen in their communities and are very willing to accept invitations from local businesses during the busy campaign season. If your shop is willing to host a candidate to help educate them on our industry and challenges, please contact Linden Wicklund at linden@ aaspmn.org and Sam Richie at srichie@fryberger.com and we can help provide materials and coordinate a shop visit.

These connections with lawmakers help our lobbying team make inroads during the legislative session and with a consequential budget setting year coming in 2023, every connection made now will help us down the road.

*This is not legal advice but for informational purposes only.

NATIONAL NEWS

continued from pg. 8

consumers purchase auto repair, where repairs are performed and how parts are supplied to repair outlets. The impact of o2o has already been felt in the tire market.

• Surging mobile repair demonstrates that the potential of o2o (online to offline) auto repair is much greater than is generally recognized.

Visit degweb.org to submit a Database Inquiry and contribute to database accuracy!

Note: The estimating databases are all intended to be used as a GUIDE ONLY. View these tips and others at DEGWEB.ORG.

The Database Enhancement Gateway (DEG) helps improve the information in collision repair estimates through repairer feedback about vehicle-specific errors, omissions and inaccuracies in the database and labor times.

If you are performing automotive repairs of any kind - collision or mechanical - you need to utilize the DEG! Check out some recent Database Inquiries - and their resolutions - below!

FOR SALE: Planning to Sell Your Shop

Running a shop – automotive or collision –presents many challenges that keep owners busy, day in and day out. Their lives revolve around the business, and while some of them love it, others are counting the days until they wash their hands of the whole thing.

But as a business owner, walking away from the shop isn’t as simple as typing up a letter of resignation or turning in your key to the front door. It’s a process that requires forethought and preparation…or at least, it does if you want to walk away with something to show for all your hard work.

“When many shop owners get out of the business, their decision is a reaction, instead of a well thought

out plan,” notes Rick White (180BIZ). “They get tired of the daily grind and just don’t want to deal with it anymore. The problem is how few people consider an exit strategy ahead of that day. And when you fail to plan, you are planning to fail.”

But when should you start planning your exit strategy? And what are some of the most important things to consider?

Preparations should begin as early as possible, but the actual time frame necessary for any specific shop depends on the owner and the business itself.

“The very first thing to consider is when you want to sell,” Bradley Peterson (Sunbelt Business

Advisors) insists. “Are you going to do it in one, three or five years? I recommend starting the process at least three years in advance of the actual sale, but the most important thing is to have a plan, rather than just deciding to sell one day. Allowing yourself time to make preparations gives you a chance to make the business more sellable and the sale more lucrative. The earlier you start planning, the more time you have to conduct market research and better understand what your business is worth…and make corrections if necessary.”

White encourages clients to invest a little more time in their exit strategy. “The business needs to be profitable before you try to sell it, and that means being able to show four or five years of consistent profit. For a shop that isn’t profitable, it may take five years to generate a profit and another five years of maintaining it before selling is in your best interests.”

Although Laura Gay (Consolidation Coach) agrees that it’s ideal to allot 10 years to developing and implementing an exit strategy, circumstances don’t always allow for that.

“Consolidation in the collision repair world is unlikely to last much longer than another two years before they start converting non-shop structures or building new facilities,” she predicts. “In a perfect world, 10 years would be great, but we don’t have that luxury right now. The large cash offers being presented are only going to be on the table for a few more years before that ship sails, so owners interested in selling need to start preparing right now.”

White believes a similar forecast may be in store for mechanical shops: “This is the age of acquisitions. I think the repair side is going to see a lot of MSOs in the next five to 10 years, like what the body shops are doing with lots of major players buying businesses while many smaller independents are pulling out.”

“Certain markets are being targeted by consolidators right now, and that shortens the expiration date, but other areas haven’t seen any consolidation activity yet, so there’s a little more time there,” Gay elaborates on the current situation for body shops. “For example, Minneapolis and St. Paul are smoking hot areas, as is anything within 70 miles of the city’s center where they’re creating a hub. Eventually, they’ll expand into more rural areas, but most consolidators are seeking a market with a population of at least 20,000 and shops that are 10,000 square feet (or larger) and generating a minimum of $2 million in annual sales.”

Shops often neglect to develop an exit strategy – they simply decide to sell without any advance

by Chasidy Rae Sisk

preparation, and as a result, many shop owners are very disappointed to discover the true value of their business.

“A lot of shops are barely making a profit; they’re not worth much more than their assets,” White laments. “Yet every owner assumes their shop is worth $1 million…and it’s really sad when they find out what it’s actually worth.”

“Business value is based on financials, but shops often struggle with reporting their financials accurately, which means they have not shown the true earning power of the business. And that means it’s going to be valued lower than it probably should be,” Peterson warns. “The more profitability you can demonstrate, the more money you’ll get for your business. Records need to be updated monthly, allowing you to easily show exactly where you’re at.”

Of course, profitability isn’t the only factor impacting a shop’s value.

“A profitable shop has more value than one that isn’t profitable, but that doesn’t mean a non-profitable shop doesn’t still have value,” Gay emphasizes.

The assets being sold with the shop make a huge difference in the price tag you can place on the business.

“Well-maintained tools and equipment are more desirable, and buyers are also going to look at the condition of the operation’s facilities,” Peterson observes.

Typically, the real estate associated with the shop emerges among the most important assets to consider.

“Will the purchase include real estate or not?” White questions. “If you currently rent the land your shop is on, the lease options will factor into the value someone is willing to pay. If you own the real estate, hopefully it’s been split out into a separate holding company or realty trust that rents the land to your shop because that protects you from a liability standpoint, but it also allows you to sell the business and maintain the property for additional income.

“At the same time, if the business is worth $1 million, but you’re retaining the real estate, it’s going to be more difficult for the purchaser to get a loan since there’s no real collateral,” he continues. “Are you willing to hold the mortgage note? There are definitive benefits to that as well; you’ll collect more income from interest on the loan, plus you’ll typically pay less in capital gains since the money you’re receiving is spread out over a longer period.”

COVER STORY

continued from pg. 15

“Some shop owners own everything free and clear, while others are involved in all sorts of long-term agreements,” Gay agrees. “We can work through them, but they present additional challenges.”

DRP contracts, in particular, create hurdles. “DRPs don’t transfer, plus they typically have a lower profit margin, so the fewer DRPs a shop has, the better,” Peterson indicates. “Shops that don’t rely on DRPs tend to have higher profitability and value, so they collect a higher price.”

Ask successful business owners what their most valuable asset is, and many will proudly tell you it’s their team. And purchasers are fully aware of the significance of having a tenured, quality team in place.

“Evaluate the quality and tenure of the staff you have in place,” Peterson suggests. “If your shop retains good quality employees long-term, versus being a revolving door of technicians, they’re going to place a higher value on that as well.”

the business isn’t worth as much as it would be if the shop operated effectively without you sitting in the office. The owner cannot be directly tied to the dayto-day operations of the shop because that creates a situation where the value of the business is irrevocably connected to that person’s presence.”

Branding is another value-added consideration that owners should evaluate before signing their shop over.

“If your name is in the shop’s name, that may have a detrimental effect…or if you have a great reputation, you need to decide if you’re willing to leave your name on the shop when you’re no longer there,” White points out. “Their quality and customer service will be associated with you if your name remains on the building, and no one wants their name tarnished based on someone else’s actions.”

Unfortunately, shop owners often tarnish their ability to collect the highest possible amount for their business by making some common mistakes.

“Confidentiality is vital when you decide to sell,” Peterson urges. “Telling employees and customers about the pending sale often leads to negative consequences, such as key employees leaving, that can be devastating to a business and its value. You could even lose the sale.”

“Timing the announcement of the sale to staff, insurers and the public is key,” Gay adds. “Typically, these announcements will be well-orchestrated and mutually agreed upon with the buyer and seller, and they’ll be part of the legal agreements.”

Additional issues can arise from a mere lack of business know-how.

At the same time, one very important person must be excluded from the transaction: YOU!

“What is your role in the business? Are you everything to a very owner-centric business? Do you develop all the relationships with customers? Do you perform all the work yourself?” Peterson asks. “The less important the owner is to the shop’s daily operations, the more valuable that business becomes to a potential buyer. Employees should be filling key roles, enabling the business to run effectively even when you’re absent. If you’re an employer working on your business, instead of in your shop, your business is going to be more valuable.”

“The business has to be able to operate without the owner; you cannot be a key component to the business’ success,” White stresses. “If the shop owner is also the lead technician, service advisor and HR,

"“Profitability starts with clean accounting and understanding your books, so you can conduct a monthly financial review and take action to fix the areas where you’re lacking profitability,” Gay coaches. “Unfortunately, a lot of shop guys never acquired that knowledge; they stick their heads in the sand and run their business from a checkbook because truly learning what the numbers mean is an overwhelming undertaking. Most body shop owners are painters or body men who simply bought a shop; they don’t necessarily have the business knowledge or experience to protect themselves from being taken advantage of.”

“Consolidators hate it when someone like me gets involved because we’re not going to let them snowball the shop. For example, tax allocations are a huge thing – and we can save the seller thousands of dollars by negotiating those terms so they’re favorable to the shop,” she adds. “A lot of shop owners don’t realize that’s negotiable, but every part of the process can

"There are a lot of details involved in a transaction of this nature, but few people have ever gone through this before. It’s likely the biggest transaction of their life, and most folks only go through it once, so they don’t have enough experience to navigate it as well as they may like.

be negotiated. Many believe they have to accept the original offer and any paperwork that’s presented, but that’s absolutely incorrect…Every single aspect of the sale can be negotiated, from the big stuff to tiny details like the date of closing or how you announce the transition.”

Focus can also be a struggle.

“Clients get really excited about the sale, but they forget to keep their eye on the ball,” White states. “The business has to continue moving forward profitabilitywise, and it doesn’t take long for things to go sideways when you’re not paying attention. You need to stay focused on your operation until the day it’s not your operation.

“And you need to put your patience hat on,” he continues. “There will be struggles and delays, and you can nearly guarantee that it’s going to take longer and be more challenging than you think it should be…but don’t count your chickens before they’ve hatched! It’s common for a seller to get excited in the Nth hour and buy that $300,000 motor home because they know they’ve got $1 million coming in. But then the deal falls through. It’s never a good idea to spend money before you have it.”

“I tell owners that selling their shop is a journey,” Gay notes. “The process takes on a life of its own.”

“People often wonder what they’ll sell the business for, but it’s more important to know how much you’ll keep based on the deal structure and potentially lowering the tax burden,” Peterson contributes. “There are a lot of details involved in a transaction of this nature, but few people have ever gone through this before. It’s likely the biggest transaction of their life, and most folks only go through it once, so they don’t have enough experience to navigate it as well as they may like.”

Of course, there are things that no one can anticipate unless they’ve actually experienced them, and White offers a personal anecdote related to a “challenge after the sale that a lot of people don’t talk about:

“After I sold my shop, I struggled to figure out who I was for a couple years. I grew up in the industry, and that’s what I was: a shop owner. But suddenly, I wasn’t a shop owner anymore! I really struggled with my identity for a while, and that’s something everyone should be aware of. When I’m working with a shop owner who intends to sell, I immediately back them off by one day, so they spend only four days per week at the shop. Then, we discuss how to fill that time with things that will get them excited about enjoying life

and help them see who they are beyond being a shop owner.”

It bothers Peterson to see “business owners who aren’t thinking about selling get triggered into making a decision because they’re approached by a buyer looking to acquire their company. They don’t know if they’re getting the full value for their business because they don’t know what it’s worth. When you only have one interested buyer, they have all the power and leverage; they’re running the show, and you’ll end up leaving money on the table. Never accept a first offer without getting a second opinion on the value of your business in the current market!”

Selling the business opens up shop owners to the potential of being taken advantage of, but that’s why people like Peterson, White and Gay do what they do.

“I don’t want shop owners to feel intimidated like I felt intimidated,” Gay admits. “They came to town, and I felt like a rat that had to escape a sinking ship; I thought I had to sell. Watching it play out, I realize that it’s not always in your best interest to sell, and I hate the thought of other people feeling forced out of a business they love. If you don’t want to sell, you don’t have to…but you do need to understand that you cannot run the same shop you ran 10 years ago if you want to be successful. You need to reinvent yourself.”

Investing in the tools, equipment and training to keep up with constantly advancing vehicle technology may also seem overwhelming, but AASP-MN offers training and guidance to support automotive and collision repair professionals from the day they open their doors to the day they transition the business to their successor. For more information about joining and tapping into the network of support that association membership offers, visit aaspmn.org

BUMPERS PILING

Don’t Ignore the Paperwork

By Janet L. Keyes, CIH and Carol A. Keyes, CSP

If you want your blood pressure raised, get inspected. It doesn’t matter if it’s from your county hazardous waste inspector, your fire marshal, OSHA or (worst of all) the sales tax people. You might try to do everything right, but – well, sometimes you get lax. Sometimes you don’t pay close attention to what goes on out back. Sometimes you just have too much else to deal with. Or you’re so busy dealing with shop issues that you forget about front office issues.

What typically happens in a safety or environmental inspection? The inspector shows up, presents credentials, asks to see records and then walks through the facility. (You should go with that person. If the inspector points out a problem, fix it right away if you can. If you can’t do an immediate fix, take notes so you can get it fixed as soon as possible.) The inspector leaves. Then you get a notice in the mail or by email, telling you that you have to fix things – and that you have deadlines to meet, and need to notify the agency when they are fixed. Don’t ignore that paperwork.

If that paperwork ends up in the “round tuit” file, it will cost you.

Even if you made all the corrections, if you didn’t officially notify the agency of that, it will cost you.

It will cost you money and it will cost you time.

A company with operations similar to yours had a hazardous waste inspection. The inspector found solvent-contaminated rags in the trash. A drum of waste thinner wasn’t labeled as hazardous waste and its funnel was left open. They didn’t do weekly hazardous waste inspections. Solvent from a parts washer wasn’t reported on their annual report. Used oil containers were missing used oil labels. And they had no proof that employees had ever been told how to handle waste.

The company received a notice of violation from the county. They were required to make immediate fixes, and to provide the county with documentation that they had made the corrections. They made most of the fixes, but not all. And we think they didn’t tell the county about their actions.

The result: they are now facing misdemeanor criminal charges and are paying a lawyer to deal with a county attorney. And they’ve hired us to help ensure it doesn’t happen again.

This isn’t the first time we’ve been brought in after someone forgot to deal with the paperwork. The previous time was for an OSHA inspection. The corrections were made, but OSHA cited them for failure to abate because they didn’t report the fixes. Failure to abate penalties can be up to $7,000 per day. That adds up quickly.

The people who inspect you don’t do it because they want the money. OSHA penalties don’t fund OSHA. Hazardous waste inspectors don’t get bonus pay for making you hire a lawyer. If you are cited, it creates more work for them. And because the citation indicates something was wrong, either unsafe for workers or bad for the environment, they want the problem corrected.

You don’t know if or when you’ll be inspected. You could get an OSHA inspection because of an employee complaint. It could be because you had an injury bad enough to require overnight hospitalization or loss of a finger. (You know you need to report those to OSHA, right?) Or it could be a programmed or targeted inspection, one done because you’re in an industry with an above-average injury rate or with exposure to some particular hazard (such as isocyanates in paint). Hazardous waste inspections are usually routine, based on how large of a generator you are.

You can save yourself a lot of headaches by having your paperwork in order before the inspector shows up. There are some records inspectors will always ask for. For hazardous waste, be able to show what hazardous and regulated waste you shipped out and where it went. Be prepared to show the OSHA inspector your safety training records and injury logs. Keep your records organized and know where they are. You don’t need an elaborate recordkeeping system; it can be as simple as a file folder for all hazardous waste records for each year. But don’t lose that folder in the black hole of your desk. Put it into a drawer and label the drawer, so you can find it when you need it.

After an inspection, watch for the follow-up paperwork or email. As soon as you receive it, read it. Take notes about what corrections you need to make. Highlight the deadlines – and mark them on your calendar so you don’t forget them. If you can’t meet the deadlines or don’t understand what you need to do, call or email the inspector. (They aren’t ogres out to get you. If they know you are trying to do the right thing, they’ll usually try to be helpful.) AASP-MN members can also call CHESS for a free but limited consultation, to help you understand the citation and your options.

Submit your responses to the inspector on time. If you can’t correct the problem in time, ask for an extension. Inspectors have some flexibility with deadlines if you are clearly working towards a resolution. But they don’t have flexibility once the deadlines have passed. Procrastination will be at your expense.

For more information, contact Carol Keyes at carkey@chess-safety.com or (651) 481-9787.

What's

At LKQ, a passion for “better” is what drives us.

For LKQ, the world’s “good enough” isn’t good enough. We believe better is the reward for those who keep striving. We bring this passion for better to our work every day.

Today, LKQ is the auto industry’s largest recycler of vehicles. Our salvage vehicle operations recycle more than 90% of the materials from end-of-life vehicles that would otherwise end up in a landfill.

To Calibrate or Not?

What a Dangerous Question!

CRASH! A typical fender bender once required a fairly basic repair, but today’s vehicles aren’t that simple – advancing technology has created ADAS, the ultimate co-driver. These systems’ ability to process information faster than humans prevents accidents, but if they are not properly scanned, calibrated and repaired after a collision, the repercussions can be catastrophic!

“ADAS calibration isn’t rocket science; it’s much more complicated than that!” quipped George Lesniak (Autel), who emphasized that it’s also a vital component to ensuring a safe repair.

“ADAS systems save lives…but once they are repaired, they have to be repaired the right way in order to do their jobs properly,” Chuck Olsen (AirPro Diagnostics) stressed.

That begins with pre- and post-repair scans. According to the October 2021 “Who Pays for What?” survey on scanning and calibrations, 85.2 percent of shops pre-scan “all” or “most vehicles;” that number increases to 92.9 percent for post-repair scans.

But when it comes to calibrations, which I-CAR defines as “aiming, module setup, relearn, zero-point calibration, initiation or calibration is a required step following the removal, installation and/or repair of many safety and driver convenience system parts,” a different story is unfolding, and although the exact metrics vary from source to source, the overall message remains the same: auto body shops aren’t calibrating every vehicle that requires it.

“Sixty to 65 percent of vehicles that should receive a calibration didn’t, so when we ask where the industry sits on this, the numbers speak for themselves…We’re behind!” claimed Frank Terlep (Auto Techcelerators).

“The industry is missing about 85 percent of ADAS calibrations. That is, only about five percent of jobs

have an entry for a calibration, when the number should be much closer to 33 percent,” shared Nick Dominato (Repairify). “If you’ve got a model year 2020 vehicle, there’s about a 50-50 chance that it requires at least one ADAS calibration.”

Unfortunately, less than a third of estimates for those vehicles included a line item for calibration, according to Repairify’s analysis. CCC Intelligent Solutions’ 2021 Crash Course Midyear Report indicated fewer than 17 percent of estimates on current year or newer vehicles included an appraisal line for “calibration/reprogram/flash.” And although the majority of respondents to the 2021 New Jersey Automotive Industry Survey reported they perform an average of two calibrations on each vehicle, just 14 percent stated they run as many calibrations as is required by the OEM.

“If you’re not following OEM repair procedures when you work with ADAS, you’re not calibrating the vehicle –you’re mis-calibrating it!” Dominato insisted.

“A calibration technician cannot rely on memorization; they need to constantly be researching and keeping on top of this evolution because things change continuously,” Olsen agreed. “From a workflow perspective, this work requires a different skillset.”

And the demand for that skillset is only going to grow with the government’s mandates related to vehicle safety forcing OEMs to include ADAS systems in virtually every new vehicle being manufactured. The Insurance Institute of Highway Safety (IIHS) indicated that 60 percent of registered vehicles on US roadways were equipped with at least one ADAS feature in 2021.

Yet, only 30 percent of collision shops are capable of ADAS component replacement due to complexity, expense or perceived lack of demand, reported Chris Gardner (Automotive Aftermarket Suppliers Association),

By Chasidy Rae Sisk

expressing concern about the number of shops “working on [ADAS-equipped] vehicles without staying up-to-date on what’s changing. And that can be dangerous.”

LaMettry’s Collision, a 10-location MSO, performs ADAS calibrations to varying degrees at each facility, but as the need to calibrate has become increasingly common (and complex), President of Operations Darrell Amberson felt that opening a dedicated calibration center would be a wise investment.

“Some locations perform a lot of ADAS calibrations, but our calibration center does nothing else,” he explained. “We calibrate the majority of vehicles brought into the shop, averaging 1.5 to two calibrations on each job…sometimes many more. We currently do some calibrations for other collision shops, and we intend to grow that part of our business to ensure vehicles are being calibrated properly.”

Calibrations start like any other repair should: “We’re very adamant about looking up factory repair procedures and the OEM’s position statements, and we rely on them to direct us in situations where we should be looking for a calibration. If the procedures and position statements say we should calibrate, we do,” according to Amberson.

Although he acknowledges that it can be “as difficult to get our arms around the process as it is to get our arms around technology,” Amberson believes that it’s easier when everyone is involved from the very beginning of the process.

“Our front desk staff greets our customers, so they have to understand calibrations well enough to explain it to the vehicle owner. Our blueprinter needs to understand it to create accurate repair plans…and that trend follows through the process to the mechanical department, to the body tech and to our calibrations technicians.”

One of the biggest challenges he’s seen with calibrations relates to the fact that “invariably, calibrations happen at the end of the job, and in today’s world of parts delays, we’re often pushed to get it done as quickly as possible at the very end – but what happens if it doesn’t work? Calibrations fail on nearly one-fifth of the jobs we do, for any number of reasons, and that means extra diagnostic time is required before we can get a successful calibration.

“Lastly, we test drive the vehicle. It’s very conceivable to successfully calibrate a component without realizing that the entire system is not working properly. We don’t calibrate the system; we calibrate specific components, so even if we’re confident that a component is working correctly, we can’t be certain that the entire system is working right until the car is driven by someone who knows how to engage the ADAS systems and whether they’re behaving properly.”

And when those systems don’t behave properly, it can spell tragedy.

“I’m quite confident that the majority of the industry is doing a poor job of understanding calibrations,” Amberson lamented. “Many aren’t even thinking about calibrations unless they notice a dash light or something else that alerts them to a possible issue. But most cars need to be calibrated, so the many calibrations that

are being skipped pose a huge risk. Shops often ignore that risk because the frequency of shops experiencing these problems have been low so far, but we need to remember: the consequences can be extreme…to the point of injury or even death! We need to start taking calibrations seriously as an industry.”

What’s the real story of calibrations? We don’t know… yet. We want to hear straight from the source – YOU! Please visit https://bit.ly/TGPADASpoll to share your thoughts in a brief reader poll. We can’t wait to hear from you!

A Note from AASP-MN Executive Director Linden Wicklund

I see ADAS as something that is quickly going to become the sort of standard wear-and-tear repair that mechanical shops will need to be able to do or outsource. There is so little we know about how these systems age! How many potholes can you hit before you need your car calibrated? How many shopping carts or bad parking jobs does it take before a sensor is off? The longer these cars are on the road and the more drivers depend on them, the more mechanical shops are going to be entering into this area of work.

Why Join WIN?

WIN offers education, mentoring and leadership development opportunities to build critical skills for success in the collision repair market.

• Local/Regional Networking Events

• Annual Education Conference

• Educational Webinars

• Mentoring Opportunities

womensindustrynetwork.com

• Scholarship Program

• School Outreach Program

• Most Influential Women (MIW) Award

CARS Cooperative Grows

With the help of AASP-MN members, CARS COOPERATIVE continues to grow. CARS COOPERATIVE currently has 1,234 members and over 55 value added programs.

As a member of AASP-MN, you are eligible for a CARS CONNECTION PLUS Membership, at no cost to you. CARS will be launching three new vendors - to give you more Options and Opportunities as an AASP-MN member.

Don’t miss out on CASH BACK REWARDS, DISCOUNTS or CARS SPECIAL PRICING. Contact CARS at (405) 5474077 or email membersupport@cars.coop to learn more.

AASP-MN MEMBER BENEFIT PROGRAMS

PROPERTY/LIABILITY AND WORKERS’ COMP INSURANCE

CBIZ AIA

Contact: Brad Schmid 763-549-2247 / bschmid@cbiz.com

CBIZ AIA and United Fire Group (UFG) have created a program for members that includes a special premium discount, exclusive coverage and potential safety group dividend. CBIZ AIA can present quotes from multiple carriers and, as an added bonus, offer members an exclusive 10% discount on their property/liability insurance premiums.

EMPLOYEE BENEFITS

Business Planning Professionals

Contact: Dennis Begley 612-308-6577 / dennis@begley-group.com

Business Planning Professionals will provide AASP-MN members with quotes from multiple carriers for life insurance, health insurance, long-term care and disability insurance.

EMPLOYEE VOLUNTARY BENEFITS

Colonial Life

Contact: Deb Ferrao 612-600-4135 / deb.ferrao@coloniallifesales.com or Tracy Bailey 612-801-0139 / tracy.coloniallife@gmail.com

Dedicated representatives can help members transform their benefit package with competitive rates, value added services at no cost and complimentary legal document preparation service. Colonial Life has the tools and flexibility to create a plan to fit everyone’s needs.

UNIFORM & LINEN SUPPLIES

Aramark

Contact: Rick Krenz 612-616-5290 / krenz-richard@aramark.com

Discounted pricing to members on rental of uniforms, entrance mats, shop rags, etc. Purchases are also discounted. Members receive annual rebate equal to 10% of their business with AmeriPride/Aramark each year.

CREDIT CARD PROCESSING

Association BankCard Services

Contact: Mac Hardin 952-933-2026 / mach@retailfinancialservices.biz

Competitive rates for AASP-MN members. Terminals and printers sold at cost. Monthly rental of equipment is also available.

LEGAL CONSULTATION

Fryberger, Buchanan, Smith & Frederick 800-496-6789

Members receive free, over-the-phone legal assessment and consultation (some restrictions apply) with an attorney who specializes in the area of law that is the subject of the call.

WEBSITE AND INTERNET MARKETING SOLUTIONS

Autoshop Solutions

Contact: Tony Mercury 919-267-1731 / tony@autoshopsolutions.com

Autoshop Solutions has developed the most cutting-edge marketing platform for AASP members. Really Powerful Marketing (RPM) is an all-in-one program that bundles your website, pay-per-click, search engine optimization, social media, and much more! With five levels of RPM to match your budget, goals, and competition, it’s built to drive your shop forward!

REPAIR SHOP PRODUCTS/SERVICES DISCOUNTS

CARS COOPERATIVE

Contact: Stephenie Sheppard 405-547-4077 / membersupport@cars.coop

Members receive discounts on a variety of products and services they use every day! From discounts on paint and rental cars to office supplies and phone services. Over 50 programs available!

INFORMATION PROVIDERS

Mitchell 1

Contact: Mitchell 1 Representative 888-724-6742 ext. 6986

Mitchell 1 offers AASP members a $10 per month discount on any eligible Mitchell 1 subscription.

Mitchell International

Contact: Mitchell International Representative 800-238-9111

AASP members receive $350 off Mitchell's MD-500 allin-one solution for scanning, calibration, estimating, and blueprinting.

TECHNICAL INFORMATION HOTLINE

IDENTIFIX 800-745-9649

Members enjoy a 20% annual savings on Direct-Hit and Direct-Help subscriptions, the industry's most reliable source for experience-based repair information.

CHECK GUARANTEE SERVICES

Certegy Check Services 877-520-2987

Discount rate of .75% to AASP-MN members. Use existing credit card terminal. Fast claim payments.

AUTO EMPLOYEE ASSESSMENT

Assessment Associates International Contact: Nate Page 952-854-6551 / nate@aai-assessment.com

Designed to help facilitate and enhance hiring decisions. AASP-MN members receive 50% off retail price, starting as low as $15 per assessment.

BUSINESS FORMS/CALENDARS

AASP-MN

Contact: Jodi Pillsbury 612-623-1110 / jodi@aaspmn.org

Discounted rates on printed business forms and calendars.

PAYROLL PROCESSING

CBIZ Payroll Contact: Carrie Hobrough 612-436-4620 / chobrough@cbiz.com

Members receive 20% discount off standard payroll products and services (excluding 401k).

SAFETY COMPLIANCE

Complete, Health, Environmental & Safety Services

Contact: Carol Keyes 651-481-9787 / carkey@chess-safety.com

AASP-MN members receive a 20% discount on Safety Data Sheet Management (SDSLinks), Right to Know(RTK)/ Hazard Communication program customized for your facility and monthly safety reminders, and other safety, OSHA or environmental assistance.

LIVE-ONLINE & ON-DEMAND TECHNICAL TRAINING

AUTOMOTIVE SEMINARS

Contact: Tim Houghtaling 920-866-9813 / tim@automotiveseminars.com

Discounted pricing to AASP-MN members on all liveonline events, as well as on-demand training videos. Automotive Seminars specializes in diagnostic training that provides automotive technicians with knowledge, testing techniques and data interpretation skills needed to diagnose today’s vehicles. The live-online events and ondemand training videos focus on automotive electronics and engine management systems and are written and created by some of the industry’s leading diagnostic technicians.

BUSINESS COACHING 180BIZ 540-833-2014 / info@180biz.com Members receive a 25% discount on Rick White's Pocket Business Genius subscription, offering independent auto shop owners fast access to actionable business advice from a leading industry expert.

SHOP SOFTWARE Condition Now 888-868-5440 / conditionnow.com/body-shop A platform that allows shops to supplement the accident or damage information reported on Carfax and Autocheck vehicle history reports. Every AASP member receives a discounted inspection rate, allowing them to generate additional revenue from their retail and dealer customers.

The Flash utilizes a vacuum seal to the flooring surface to deliver 550 lbs of pulling force using a heavy-duty ratcheting system and featuring an adjustable pulling height setup providing precise pulling directions.

(224-772-6374)