Hammer & Dolly January 2014 by Thomas Greco Publishing, Inc.

How Will Obamacare Affect Your Business? - page 22

January 2014 Volume 8, No. 1 $5.95 www.wmaba.com

www.grecopublishing.com

Inside this issue: A Parts Fight in Florida Planning for Progress The OEM Standard and You

January 2014

40 COVER STORY

PARTSTRADER HITS HOME:

CONTENTS

WMABA WORKS ON A CURE

WMABA responds to a very unwelcome guest.

JANUARY

2014

LOCAL NEWS 14 Gaithersburg High School Calls

One of Maryland’s finest schools needs your help.

for Industry Support

PartsTrader Discussion Drives WMABA Membership Social

DEPARTMENTS

Members of the WMABA community explore their industry's biggest issue.

NATIONAL NEWS 18 Florida Shops Fight Back Against

Calendar of Events

Editor’s Message

Lakeland, FL repairer Ray Gunder leads the charge.

Insurer Mandates

JOEL GAUSTEN 12

LEGAL PERSPECTIVE 22 How Will Obamacare Affect Your Business?

A brief rundown of some facts and figures on the Affordable Care Act and how it will impact small businesses moving forward.

Headliners

Executive Director’s

WMABA FEATURE 26 Into the Future: WMABA Members

Message

JORDAN HENDLER

Area shops find inspiring ways to keep business alive. BY JOEL GAUSTEN

Technician of the Month: Santos Godoy

BY JAMES A. CLEAVER

Plan for Progress in 2014

NewsFlash

Advertisers Index

COVER: ©istockphoto.com/gerenme THIS PAGE, CLOCKWISE FROM TOP: ©istockphoto.com/gerenme

TECHNICAL FEATURE 34 The OEM Standard and You:

©istockphoto.com/BeholdingEye ©istockphoto.com/JoeGough ©istockphoto.com/IvelinRadkov

What Are You Prepared For?

Our technical writers chime in on a hot issue. BY LARRY MONTANEZ III, CDA & JEFF LANGE, PE

January 2014

Industry training opportunities and don't-miss events.

CALENDAR OF

EVENTS

January 7, 2014

”ENCYCLOPEDIA OF ESTIMATING PRAC TICES“ PRESENTED BY MIKE ANDE RSON LKQ/Keystone Training Facility, Linth icum, MD For more information, visit www .wmaba.com

January 15, 2014

SCRS OPEN MEETING Hilton Palm Springs, Palm Sprin gs, CA For more information, visit www .scrs.com

January 15-17, 2014

CLASS LISTINGS

January 4, 2014

BLUEPRINTING PROCESS & DAMAGE DISCOVERY Criswell Collision Center, Annapolis, MD

COLLISION INDUSTRY CONFERENCE (CIC) Hilton Palm Springs, Palm Sprin gs, CA For more information, visit www .ciclink.com

January 22, 2014

WMABA “LOBBY DAY” PRESENTED IN CONJUNCTION WITH ALEXANDE R & CLEAVER Historic Inns of Annapolis, Anna polis, MD For more information , visit www.wmaba.com

OVERVIEW OF CYCLE TIME IMPROVEMENTS FOR THE COLLISION REPAIR PROCESS

Criswell Collision Center, Annapolis, MD

January 6, 2014

BEST PRACTICES FOR HIGH-STRENGTH STEEL REPAIRS Laslie’s Auto Body, Lynchburg, VA

January 7, 2014

VEHICLE TECHNOLOGY & TRENDS 2014

Coxton’s Gold Team Collision Center, Yorktown, VA

January 9, 2014

WELDED & ADHESIVELY BONDED PANEL REPLACEMENT Frederick Co. Career & Tech, Frederick, MD

January 13, 2014

ELECTRIC & ELECTRIC HYBRID VEHICLES Laslie’s Auto Body, Lynchburg, VA

January 14, 2014

PLASTIC & COMPOSITE REPAIR

Best Western Westminster, Westminster, MD

January 16, 2014

HAZARDOUS MATERIALS, PERSONAL SAFETY & REFINISH SAFETY

Coxton’s Gold Team Collision Center, Yorktown, VA

January 21, 2014

REPLACEMENT OF STEEL UNITIZED STRUCTURES Coxton’s Gold Team Collision Center, Yorktown, VA

January 23, 2014

SQUEEZE-TYPE RESISTANCE SPOT WELDING Frederick Co. Career & Tech, Frederick, MD

January 30, 2014

SECTIONING OF STEEL UNITIZED STRUCTURES Coxton’s Gold Team Collision Center, Yorktown, VA

February 13, 2014 SUSPENSION SYSTEMS

Frederick Co. Career & Tech, Frederick, MD

February 18, 2014

WATERBORNE PRODUCTS, SYSTEMS & APPLICATION Best Western Westminster, Westminster, MD

February 27, 2014

STRUCTURAL STRAIGHTENING STEEL

Frederick Co. Career & Tech, Frederick, MD

www.i-car.com or (800) 422-7872 for info

SUBSCRIBE TO the official publication of the Washington Metropolitan Auto Body Association today! Subscriptions are a free member benefit to all WMABA members (Washington, DC, MD and VA), and $34.99 to all others for a one-year subscription. For more information, please contact WMABA Executive Director Jordan Hendler at (804) 789-9649 or via email at jordanhendler@wmaba.com. 8

January 2014

Joel Gausten

EDITOR’S

(973) 600-9288 tgpjoel@verizon.net

MESSAGE MAKE YOUR MOVE

Depending on the kind of relationships you have with certain insurance companies, 2014 promises to dramatically change how you conduct business in the collision repair industry. With PartsTrader set to arrive in Maryland and Virginia in a few short weeks, WMABA members and the greater Washington-Metropolitan automotive community will soon

experience the concept of insurer-mandated parts procurement – a topic that has taken center stage in the pages of Hammer & Dolly for nearly two years now – up close and very personal. If you’re currently a Select Service shop for State Farm, you may soon find yourself having to say goodbye to your well-established connections with local wholesale departments and buy from parts vendors in other states. If you are a dealer with an internal collision center, it is possible that you will no longer be able to order parts from yourself. And if you are a shop that is vehemently opposed to the concept of DRPs and refused to sign the Select Service contract years ago, don’t think for one second that you’re free and clear from the repercussions of PartsTrader and similar platforms. After all, if the majority of your market ends up going in one direction, it won’t be long before you are being told that it has become customary and your compliance is expected. If these thoughts make you nervous or willing to accept defeat, never forget that you ultimately decide what happens in your industry. If you decide to maintain your DRP relationship and move forward with your partner’s parts system, that is your choice. If you feel you have lost too much control of your business and want to be free of insurer influence, you can walk away. The writing has been on the wall (and in this magazine) for months; if you haven’t made up your mind on insurer-mandate parts procurement yet, now is the time. These systems are just around the corner. Regardless of where you ultimately stand on this issue, make that decision for yourself. In all the years I’ve covered this industry, I’ve never once seen an insurance spokesperson repair a car. These people need you. Use that to your advantage and build your business your way. H&D

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2014 WMABA OFFICERS PRESIDENT

VICE PRESIDENT TREASURER SECRETARY

IMMEDIATE PAST PRESIDENT

Don Beaver Dbeaver@antwerpenauto.com 443-539-4200 ext. 17061 Torchy Chandler torchy.chandler@gmail.com 410-309-2242 Mark Schaech Jr. mark@marksbodyshop.com 410-358-5155 John Krauss jkrauss@craftsmanautobody.com 703-534-1818 Barry Dorn bdorn@dornsbodyandpaint.com 804-746-3928

BOARD OF DIRECTORS

Rodney Bolton (rbolton@aacps.org) 410-969-3100 ext. 250 Mark Boudreau (crashdaddy@aol.com) 703-671-2402

Kevin Burt (kevinburt@walkermillcollision.com) 301-336-1140 Bobby Wright (bobby@burkevillebodyshop.com) 434-767-4128

ADMINISTRATION

EXECUTIVE DIRECTOR Jordan Hendler (jordanhendler@wmaba.com) 804-789-9649 WMABA CORPORATE OFFICE P.O. Box 3157 • Mechanicsville, VA 23116

January 2014

STAFF

PUBLISHER MANAGING EDITOR EDITOR ART DIRECTOR OFFICE MANAGER ADVERTISING DIRECTOR

Thomas Greco tgp22@verizon.net Alicia Figurelli tgp2@verizon.net

Joel Gausten tgpjoel@verizon.net Lea Velocci tgp3@verizon.net Sofia Cabrera tgp4@verizon.net

Norman Morano tgp5@verizon.net 800-991-1995 Fax 732-280-6601

PUBLISHED BY TGP, Inc. 244 Chestnut St., Suite 202 Nutley, NJ 07110 973-667-6922 FAX 973-235-1963 Reproduction of any portions of this publication is specifically prohibited without written permission from the publisher. The opinions and ideas appearing in this magazine are not necessarily representations of TGP Inc. or of the Washington Metropolitan Auto Body Association (WMABA). Copyright © 2014 Thomas Greco Publishing, Inc.

January 2014

NEWS

FLASH

News and reports from across the nation.

BASF Brings Chip Foose to AASP/NJ’s NORTHEAST® 2014 Automotive Services Show The Alliance of Automotive Service Providers of NJ (AASP/NJ), the state’s largest association of collision and mechanical repairers, is delighted to announce that BASF is bringing Chip Foose to the association’s flagship event, the 2014 NORTHEAST Automotive Services Show on Saturday, March 22. Foose is a hot rod shop owner, designer and fabricator and star of the reality show Overhaulin’. Tom Smetanka, general manager of Central Paint in Trenton, NJ, says, “Chip Foose is an automotive icon. We’re honored that BASF has invited him to attend the show and appear in the BASF booth from 10am – 2pm on Saturday.” “We have been working hard to help make our 2014 NORTHEAST event our best yet, and BASF has really stepped up,” adds AASP/NJ President Jeff McDowell. “A celebrity appearance from someone like Chip Foose during NORTHEAST 2014 will be huge in elevating our show to be the can’t-miss trade event on the east coast.” NORTHEAST 2014 will feature hundreds of exhibitors showcasing the hottest products, newest technology and most valuable industry information at the Meadowlands Exposition Center March 21, 22, 23. Online pre-registration for NORTHEAST 2014 is now open – visit www.aaspnjnortheast.com/registration.shtml to sign up for free. For more information on NORTHEAST 2014, visit www.aaspnjnortheast.com, the NORTHEAST Automotive Services Show on Facebook, the NORTHEAST Automotive Services Show YouTube page (www.youtube.com/user/AASPNJ NORTHEAST) or on Twitter @AASPNJNORTHEAST. For more information on AASP/NJ, please visit www.aaspnj.org. H&D

January 2014

Online pre-registration for NORTHEAST 2014 is now open! See you at the show! www.aaspnjnortheast.com FRIDAY, MARCH 21 5PM-10PM SATURDAY, MARCH 22 10AM-5PM SUNDAY, MARCH 23 10AM-3PM NORTHEAST 2014 features industry-leading exhibitors, top-notch training and informational updates for the repair community, all centrally located at the Meadowlands Exposition Center in Secaucus, NJ

6,000 FREE PARKING spaces available! NORTHEAST 2014 is proudly presented by

January 2014

Information and updates from WMABA and beyond.

LOCAL

NEWS F

eaturing one of the most comprehensive collision repair education programs in the WMABA region, Gaithersburg High School in Gaithersburg, MD has provided students with real-world technical and business skills for decades. Led by veteran instructor Kevin Lester, the Gaithersburg program is NATEF-certified in refinishing, structural and non-structural repair and serves roughly 60 students a year. Thanks to the program’s long-standing relationships with area body shops and dealerships, seniors can gain work experience out in the field while still attending school on halfday schedules. In addition to Gaithersburg High School’s auto body program, Montgomery County boasts automotive education at Thomas Edison High School of Technology (Auto Body/Auto Tech), Damascus High School (Auto Tech) and Seneca Valley High School (Auto Tech). All four schools participate in special used car sales where vehicles repaired by students are actually sold to the motoring public. “A person could donate a car to any of the four schools,” Lester explains. “When people from the public donate cars to us, they will be evaluated. [My classes] will do the body work, and then it will go through one of the auto body technology programs. After that, all cars go through the Maryland State Inspection. This is a requirement since we are a licensed used car dealership. All of the proceeds from the car sales go to fund the automotive programs throughout the county.” Although car donations were plentiful in the past, Lester says that there is a growing

January 2014

need for more support from the area collision repair industry – especially since vehicle owners are keeping their cars longer than ever before. “The economy is really poor right now, and people can’t really afford to buy a new car, so they’re running the car they have into the ground because they have no other choice,” he says. While the department prefers to receive ’96 models and newer, Lester says that any kind of vehicle donation would be appreciated. “Anything has educational value,” he says. “Let’s say an ’86 car gets donated. My students can still take panels off and put them back on, and we can paint them. Auto Tech can use that car for looking at brakes, tire rotations and oil changes. Any car that gets donated is useful.” Earlier this year, Lester’s department moved into a new, state-of-the-art facility thanks to a major school-wide reconstruction project. As he explains, the impressive new location - complete with top-of-the-line welders, frame machines and prep stations has made a strong impression on the community. “Now that we have a new school, a new program, updated technology and everything that’s standard for a typical body shop, parents have walked into this program and actually compared it to the local body shops they’ve been to,” he says. “With the certifications and credentials we have, it means a lot more to parents because their children are being taught on the actual equipment and tools that are found out in the industry.”

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Gaithersburg High School Calls for Industry Support

In addition to the renovated building, Lester’s program was the recent recipient of a $6,500 tool grant through the Collision Repair Education Foundation. “It’s very exciting for us because it could not have come at a better time,” he says. “We are extremely grateful to I-CAR and the Foundation for their support.” Despite these positive advancements, the Gaithersburg auto body program is still in need of support from the auto body community to ensure that students have enough cars to work on. For information on how you can donate vehicles to the school, please visit www.autocareers.org. H&D

Executive Director’s Thoughts It is so important for our local technical schools to have the support of the industry. Without the proper tooling and cars to work on, these students will graduate lacking important skills that these materials would have provided. Make an effort to get involved; you could even share your expertise as a technician!

- Jordan Hendler

January 2014

The latest from WMABA members and supporters.

NATIONAL

NEWS PartsTrader Discussion Drives WMABA Membership Social

n December 11, WMABA welcomed its largest crowd of the year for an in-depth discussion on insurer parts procurement mandates, and specifically State Farm’s controversial PartsTrader program and its possible effects on the Washington-Metropolitan collision repair industry. With PartsTrader set to appear in Maryland and Virginia by early February, WMABA Executive Director Jordan Hendler and Outgoing President Barry Dorn presented an in-depth overview of how the WMABA community could be impacted, as well as some items to consider. The presentation, held at McCormick & Schmick's in Oxon Hill, MD, was offered as part of the association’s Annual Meeting & Holiday Membership Social. Hendler began her update by stressing that WMABA’s well-publicized stand against insurers mandating a particular process or vendor is violated by State Farm’s mandate that Select Service shops use only PartsTrader for their parts procurement needs.

Clockwise from top left: Longtime WMABA member Ed Vallejos called for ways to increase membership; WMABA Board member Mark Boudreau was an active participant in the PartsTrader discussion; WMABA member Chris Taylor discussed leaving his agreement with State Farm.

WMABA Executive Director Jordan Hendler updated the packed room on State Farm's upcoming PartsTrader program in Virginia and Maryland.

January 2014

New Board Announced

Prior to the PartsTrader discussion, Executive Director Jordan Hendler introduced the 2014 WMABA Board of Directors: President – Don Beaver, Vice President – Torchy Chandler, Treasurer – Mark Schaech, Jr., Secretary – John Krauss, Immediate Past President – Barry Dorn and Directors – Mark Boudreau, Bobby Wright, Kevin Burt and Rodney Bolton.

For more information on association activities and upcoming events, please visit www.wmaba.com.

The 2014 WMABA Board of Directors. Left to Right: Don Beaver (President), Bobby Wright (Director), John Krauss (Secretary), Mark Boudreau (Director), Torchy Chandler (Vice President), Mark Schaech Jr. (Treasurer), Kevin Burt (Director) and Barry Dorn (Immediate Past President). Not pictured: Rodney Bolton

“We are not against electronic parts ordering at all,” she said. “WMABA does not promote a particular position other than we are adamantly against an insurer mandating one particular vendor for anything…An insurer mandating a particular parts vendor has the potential to change the entire landscape of our industry.” For several months, WMABA has remained at the forefront of the PartsTrader debate, regularly appearing at national events and meeting with other industry associations to better inform repairers and vendors of the issue. Hendler shared her frustration in convincing some entities of the inherent dangers of the program for repairers, parts vendors and consumers. “We’ve been after this for two years,” she shared. “My first call was to the dealers’ associations. At that time, the response was, ‘Well, they’re just testing it, so we’re just going to wait it out and see what happens.’ So while we were trying to do everything we could through advanced action, they were hesitant to act.” Despite ongoing public relations attempts by PartsTrader to portray their system as a success in the US, Dorn cautioned that the program appears to have benefitted only a very small number of repairers. “[State Farm and PartsTrader] do have a couple of shops that actually love it,” he said. “There’s always a fit for everything, but these are typically very small shops who weren’t monitoring their gross profit or their mark-up on parts. Therefore, [PartsTrader] does it for them…You will always find these extreme cases.” WMABA Board member Mark Boudreau urged his fellow shop owners in attendance to contact their dealers and parts suppliers to gain their support in pushing back against insurer-mandated parts procurement. “They have the most control over this situation because there’s going to be a lot of fear on the shops’ side,” he said. “It’s going to be

hard for a shop on the program to say no.” “The parts vendors have the key,” Hendler added. Longtime WMABA member Edward Vallejos (Professional Collision Centers) encouraged WMABA shops to reach out to former members of the association and ask them to re-join and add their voices to the fight. “We need the support and we need the dollars coming in,” he offered. “Money is power.” Member shop owner Chris Taylor (Taylor’s Auto Body) shared that he retained an attorney once he received word from State Farm that he only had two weeks to decide whether or not his business would use PartsTrader. Taylor’s attorney’s lengthy review of the Select Service contract offered the shop owner a new perspective on his relationship with the nation’s largest auto insurer. “[The agreement] is written really well,” he said. “They always have the out of, ‘Well, you have a choice. You don’t have to sign.’ We didn’t sign.” Hendler strongly encouraged members to seek out their local senators and delegates and inform them of the issues surrounding insurer mandates, especially as WMABA continues to promote anti-mandate legislation in Annapolis and beyond (see cover story, page 40). “When the association puts in legislation, [legislators] want to talk to you,” she said. “You’re the people who will affect how they vote when a bill comes to their committee. I can’t stress to you how important that is.” As WMABA’s campaign to address PartsTrader and similar programs moves into 2014, Hendler assures members that they can contact the association if they wish to voice a problem or concern with an insurer in a confidential manner. “You have the opportunity to go through us,” she said. “I can ask the questions [of insurers] that you don’t want to ask because you don’t want the repercussions.” H&D January 2014

Information and updates from WMABA and beyond.

NATIONAL

NEWS Florida Shops Fight Back Against Insurer Mandates

hile many shop owners were gearing up for the Thanksgiving holiday, Lakeland, FL-based repair professional Ray Gunder (Gunder’s Auto Center) was spending his time taking on a corporate giant. On November 20, Gunder moderated a meeting of nearly 100 collision repairers, suppliers and vendors who gathered in Lakeland to discuss PartsTrader and short-pay litigation. Guests included Gunder’s attorney Brent Geohagan, John Mosley of the Mississippi Collision Repair Association and Mosley’s attorney, John Eaves, Jr. The gathering provided these speakers an opportunity to share their efforts to stop implementation of PartsTrader in their respective states. As Gunder tells Hammer & Dolly, the purpose behind the meeting was to shine a greater spotlight on how various markets are addressing the issue of insurer-mandated parts procurement. “Enough is enough,” he says. “State Farm has been intruding into our business and controlling and setting prices for years and years. We’re like a bunch of dogs who have been pushed into a financial corner and are being poked with a stick until we have no other choice but to come out and fight back. I believe that PartsTrader is the final straw. The parts profit is a big part of how we keep our doors open. Now that State Farm is coming in and wanting to shave that down who knows how far, it’s time to stand up and fight.” Mosley, who recently joined approximately 30 body shops and other industry parties in filing an injunction against PartsTrader in Mississippi (“The End of Choice?” H&D, October 2013), used the meeting as a chance to share information regarding the recent CIC meeting at SEMA in Las Vegas and discussions with State Farm’s George Avery. “The simple and clear message was, if you chose not to participate in PartsTrader,

January 2014

State Farm will immediately find you irrelevant,” he said. “The message was clear that State Farm doesn’t care if the collision repair industry likes PartsTrader or not; they will continue to implement the program regardless!” “We’re in Florida with the purpose of filing an injunction to stop PartsTrader,” added Eaves during the discussion. “Our ultimate goal is to defeat this mandated parts procurement program and State Farm’s intrusion into the collision repair industry in Florida and across the country. “This issue isn’t just about you as individual repairers,” he added. “This issue is about your responsibility to the consumers around the nation who are relying upon you, the repair professionals, to look out for and to safeguard their best interests regarding their personal safety and economic wellbeing.” According to a press release issued by Barrett Smith (Auto Damage Experts), Eaves has talked to more than 200 shops in 23 different states, urging them to join with vendors in combatting the insurer’s intrusion. Additionally, Eaves and Mosley spoke about repairers coming together and filing litigation for short-pays on performed repairs. Mosley stated that their research has shown that on average, each repair order/invoice was shorted $625 to $700 on a $3,500 repair for procedures including color-sand and polish, fill-block and prime, test driving and cleaning the car for delivery. They have a list of more than 60 necessary and essential procedures that are not paid by numerous insurers. “This is about taking back the monies that insurers have taken from you for procedures and materials the repair required, that you the repairers have provided, the consumer received and of which the insurer has failed to pay for!” Eaves stated. “That is considered ‘unjust enrichment’ to the insurers, and our legal team is going to help

participating shops get back the monies they were deprived of…and it won’t cost the shop one penny up front! All it takes is for the repairer to let us know they wish to be included in this effort, and we’ll take it from there. There is a time limit, so repairers who wish to be included need to notify us at their earliest [convenience].” On November 23, the PartsTrader and short-pay discussions moved to Chicago, where a gathering similar to the one on Florida was hosted by the Alliance of Automotive Service Providers of Illinois (AASPIL). Not surprisingly, Gunder says that the mood in both meetings rooms was essentially the same. “People are looking for answers right now,” he says. “I think the attendees at both meetings heard and perceived that there is hope. The people I spoke to were genuinely excited that they’re not going to have to take it this time, and that there is an entity out there trying to do something.” For more information on the short-pay legal campaign, repairers are encouraged to contact John Eaves, Jr. at (601) 355-7961 or via email at Johnjr@eaveslaw.com. A national online petition against PartsTrader (created by the Indiana Auto Body Association) is available at www.change.org/peti tions/dear-state-and-federal-attorney-gen erals-legislators-and-the-federal-tradecommission-stop-insurer-mandatedprograms. H&D

Executive Director’s Thoughts

It is good to keep abreast of other area activities that could potentially change how our region addresses issues between repairers and insurers. The progression of their “fight” could present alternatives for use in different areas. - Jordan Hendler

January 2014

TECHNICIAN OF

Hammer & Dolly chats with the WMABA community’s best and brightest.

THE MONTH: E

Santos Godoy

asily one of Virginia’s most prominent auto body operations, Tysons Corner Collision Repair Center in Vienna has the equipment and expertise necessary to service an average of 250 vehicles each month. Currently serving an extensive customer base that includes five Penske dealers (two Mercedes stores, two Audi stores and a Porsche store) and a neighboring Aston Martin/Bentley dealer, the center has built a solid reputation. The company’s remarkable success in the collision repair field is made possible thanks to the dedication and professionalism of people like longtime technician Santos Godoy. Born in Guatemala, Godoy has spent the last 10 of his 11 years in the industry with Tysons. Originally a painter with the facility for six years, he later developed a strong interest in collision repair that led him to become one of the 14-person tech team’s most valued members. “Santos brings an exemplary performance in terms of quality and timeliness,” offers Tysons Corner Collision Center Manager Tim Pfeifle. “He goes the extra mile to make sure that cars are fixed properly. He has taken all of the extra training that he needs in order to get the job done. He’s really gone way out of his way to make sure that everything coming out of the shop is perfect.” Godoy’s talents on the shop floor are especially appreciated during those times when team leader Chris Browning is out of the shop attending industry training. “Any time that Chris is gone, he just steps right up and takes over and runs the Santos Godoy is a valued member of the Tysons Corner Collision Center team.

January 2014

team,” Pfeifle says. “He does a great job filling in the pieces and keeping me up to speed on the disposition of the cars, and he knows everything off the top of his head.” A lifelong car enthusiast, Godoy joined the automotive repair industry immediately after graduating from high school in 2002. “When I was a child, my dream was to fix cars - and I did it,” he says. As a manufacturer-certified repair business, Tysons Corner Collision Center prides itself on providing factory-approved and trained technicians, original equipment parts and the highest quality materials and workmanship. Of course, this strong focus on implementing top-grade technology and

providing specialized repairs has earned the facility some considerable recognition. As of this writing, the center was one of only nine Elite Mercedes-Benz-Certified facilities in the United States. Godoy helps maintain this high standard of excellence by regularly attending I-CAR courses and other high-end training. In fact, he has the great distinction of being certified in Audi aluminum welding. Not surprisingly, he enjoys working with all of the state-of-the-art equipment available at Tysons. “We have everything we need here,” he says. “I’m happy to work on any car that needs to be fixed, and I’m hoping to be here for a long time.”

With so much variety coming through the door at Tysons Corner, Godoy is pleased to have an opportunity to showcase his skills on so many different vehicles. Whether it’s a Porsche, a Mercedes, an Audi or anything else that crosses his path, that vehicle’s owner can rest assured that his or her vehicle is in the right hands. Away from work, the celebrated repair pro enjoys spending time with his beloved family. Three months ago, Godoy joined his wife Roxanna and 10-year-old daughter Johanna in welcoming baby Gabriel into the world. It is clear when talking to him that he is truly proud to have the skills necessary to provide for his loved ones. “I always want to do better for my family,” he says. “It’s important that I work hard for them.” As for the future, Godoy plans to pursue even more training in 2014. Just as he is committed to gaining more knowledge, he encourages today’s collision repair students to make the absolute most of their experiences on and off the shop floor. “If they think they would be good at this, they need to try because this is the start of their lives,” he shares. “You need to make yourself happy.” With his generous nature and determined spirit, Santos Godoy truly exemplifies the level of professional and personal satisfaction that one can derive from this trade. With a long career still ahead of him, he is sure to be an inspiration to his peers for years to come. “He sets a shining example for everyone else to live up to,” Pfeifle says. “I guarantee you that.” H&D If you would like to nominate someone as Technician of the Month, please contact Hammer & Dolly Editor Joel Gausten at tgpjoel@verizon.net.

January 2014

LEGAL

What’s happening at the State House, in your industry and everywhere in between.

PERSPECTIVE

BY JAMES A. CLEAVER, Senior Partner, The Law Offices of Alexander & Cleaver

How Will Obamacare Affect Your Business?

January 2014

Of course, the preceding merely scratches the surface of the true impact the Affordable Care Act will have on small businesses in the near and distant future. As with any laws or regulations making their way into your marketplace, knowledge is the key to being as prepared as possible. If you are a small business owner, the Affordable Care Act will certainly affect your employees and the company itself in some way. Until that day comes, the best strategy is to be armed with as much information as possible. This will save the headache of scrambling for answers when it’s too late, and will put you ahead of the game when it comes time to make important business decisions. H&D

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hile we have all heard about the well-documented problems following the rollout of the Affordable Care Act/“Obamacare,” as well as the wild and unsubstantiated claims of its eventual effect by its supporters and detractors, small businesses will be forced to come to grips with its mandates soon. The law requires that all individuals – including small business owners – must have health insurance effective January 1, 2014. According to studies, small businesses offering health care for their workers have trended downward in recent years. The reason for this trend is simple – rising costs. Since 2010, and prior to Obamacare, businesses with fewer than 25 full-time equivalent employees and average salaries of $25,000 or less were eligible for a tax credit if the employer paid for at least one-half of the cost of health insurance. Employers with fewer than 10 employees and average salaries of $25,000 or less were eligible for the full credit. Twenty-five employees and/or $50,000 in average salary disqualified the employee for any credit at all. Starting in 2014, the state-based Small Business Health Options Program Exchange will be open to small businesses and will raise the credit to 50 percent of your contributions. The concern is that the credit is available for a maximum of five years, and will decrease to two years once the exchanges are up and running. While no business is mandated to provide health insurance, only the smallest businesses will be able to avoid penalties if they do not offer health insurance. What are the penalties? If you employ 50 full-time employees, the penalty is $2,000 for each full-time employee in excess of 50 fulltime employees. Employers receive no penalties if part-time employees are not offered health insurance. Before Obamacare, employers had no requirements on what coverage businesses could provide to their employees. The law mandates “minimum essential” and “affordable” coverage: “Minimum essential coverage” means covering 60 percent of the actuarial value of the cost of the benefits. “Affordable” means that the premium for the coverage of the individual employee cannot exceed 9.5 percent of the employee’s household income. If the coverage you offer is unaffordable, qualifying employees can get subsidized coverage through a tax credit on the state exchanges. The employer must pay the lesser of $3,000 per subsidized full-time employee or the $2,000 per employee penalty over the first 30 employees.

James A. Cleaver is the senior partner of the Law Offices of Alexander & Cleaver. Jim co-founded the firm in 1984 with Gary R. Alexander. He works primarily in the field of civil litigation, heading up the firm’s injury practice. In that role, Jim is the firm’s primary negotiator and litigator in personal injury cases, using his vast experience and knowledge acquired over parts of the past five decades to achieve results for clients. Jim has been designated a Super Lawyer in personal injury cases, was named one of Maryland’s top trial lawyers and was selected by the prestigious Million Dollar Advocacy Forum. He can be contacted at (301) 292-3300.

January 2014

WMABA

Perspectives from shops and other auto professionals in the Washington-Metropolitan region.

FEATURE INTO THE FUTURE: WMABA Members Plan for Progress in 2014 The collision repair industry is far from boring.

by Joel Gausten

s a quick flip through any of the last 12 issues of Hammer & Dolly will prove, conditions in the auto body industry have never been as intense as they were in 2013. From the ongoing debate over insurer-mandated parts procurement to questions over the possible implementation of universal repair standards, the previous year didn’t see a single dull moment. As the industry moves into 2014, WMABA members are seeking new ways to remain profitable and competitive – and succeeding in intriguing ways. Since starting out in 1994 with a mere $84,000 in sales from her first six months in business, Maryland shop owner Kim Parson (Automotive Collision Technologies) has never experienced a year without growth. Nineteen years and five additional shops later, this true industry entrepreneur exceeded her $14 million annual sales goal in 2013 as an MSO and plans to open a seventh location during the first quarter of 2014. Despite the growing presence of consolidators in her market, Parson thrived as an independent this year by focusing on growing her businesses through local media, social networking and online marketing. “We’ve realized that we must be differentiated; we’re not sure that we can be differentiated by insurance companies as much as we can by the fact that we are in the community,” she explains. “This is where we live, this is where we work and this is where we’re invested. I expect my [marketing] campaign moving forward to be about care. I want the father to send his college kid’s car to me because he knows I have the equipment, tenure, technology and training to make that car safe.” With her 20th year in business just around the corner, Parson plans to devote 2014 to incorporating new technologies into her shops. These advancements include the implementation of the ASTech scanning system, which she was first introduced to at Mike Andersons’s WMABA-sponsored estimating class last summer (“Knowledge = Profit,” H&D, October 2013). In her mind, the addition

January 2014

of the ASTech system is in line with her commitment to providing safe repairs for her customers. “The codes behind the dashes now are silent killers,” she offers. “The dashboard can only recognize certain codes; there are codes that won’t even light a warning on the dash. If a repairer is not aware of that by pulling and fixing those codes, they can potentially send a car out that doesn’t have its traction control set. If that isn’t set and reprogrammed on the new vehicle, the rollover mechanism will not work.” Parson adds that she encourages any independents needing help or advice going forward in strengthening their hold on the marketplace to contact her. “My management team and I will be willing and ready to help those folks keep the stronghold on their business that they so rightly deserve,” she says. “As members of both WMABA and the Mid-Atlantic Collision Repair Organization [MACRO], we will be working on strengthening the independent body shops as a whole. Integrity is built upon tenure, and the right to repair is theirs.” Of course, Parson is not the only WMABA member looking to embrace new technologies. As manager of a high-volume collision repair facility focused on manufacturer certification related to luxury lines like Audi, Acura, Tesla and Porsche, Kevin Marvin of Criswell Collision Center in Annapolis finds technology and new repair processes exciting. However, the center’s daily struggle with the insurance industry is not so exciting. “It never ceases to amaze me that the insurance industry is willing to insure [and collect premiums for] everything and anything, but when the need arises for a policyholder to have his or her vehicle repaired, the insurer feels the need to manipulate repair processes and labor times,” he says. “It seems simple to me; if you don’t intend to pay what it costs to repair a vehicle properly, don’t insure the vehicle!” Manufacturer certification represents a significant investment for

As Marvin says, “If insurers ‘don’t know what they don’t know,’ they put themselves in an ‘ignorance is bliss’ position, thereby avoiding or postponing the need to address the matter entirely. Nobody on the insurance side wants to be the first one to set a precedent for properly repairing these vehicles. When you finally are successful at getting paid, it usually means a one-line, dollar-amount ‘concession’ at the bottom of their estimate. This practice gets the shop paid without the insurance carrier admitting or documenting the proper rates or processes. At this point, we will take it any way we can get it. “Criswell Collision Center’s future plans include a continued involvement with and participation in manufacturer certification programs,” he continues. “The path that the insurance companies have channeled our industry onto is financially unsustainable from whatever angle you look at it. Our solution has been to balance our portfolio of repair sources. I think shops that primarily rely on insurance partners to send them work will find themselves in a bind very soon. We value our insurance partners, but we value our customers more. Manufacturer programs allow shops access to information and support necessary to ensure customers get back into a vehicle that has been repaired the way the company that built it wants it repaired. The right way - not the cheapest way.” While there were plenty of issues and obstacles to keep repairers awake at night in 2013, the perspectives shared in this feature offer hope for a more prosperous future. By embracing new technologies and taking full advantages of the educational opportunities presented by WMABA and others, shops will be in a better position to move forward through what is sure to be another challenging – but potentially very rewarding – 12 months in a never-predictable industry. H&D

©www.istockphoto.com/JoeGough

a repair facility. The costs of tools, equipment and training can be astronomical to say the least. The time commitment and dedication put forth by Criswell’s team of technicians is enormous as well. However, these investments are becoming increasingly necessary for enterprises like Criswell to survive. “I believe that shops lacking the resources to partner with one or more manufacturers in today’s collision repair environment will find themselves in trouble,” Marvin says. “Vehicle repairs are becoming more and more manufacturer-specific. If you don’t have access to the special tools and information needed to repair the vehicles properly, you’re asking for trouble. Aluminum repair, for example, is so completely different than conventional bodywork. If you don’t have the training to properly make those repairs, it can have devastating results. The government and insurance entities pushed hard for the technology that manufacturers use to build vehicles today. Airbag systems, anti-lock brakes and lighter, stronger, more fuel-efficient construction are all wonderful, lifesaving pieces of technology. All of that wonderful stuff costs big money to repair or replace. These agencies have to be careful what they ask for, because sometimes they get it! Now they’ve got it, the note is due and nobody wants to pay it.” The Criswell organization has invested a lot of money in their manufacturer partnerships. As of this writing, they have a tech completing his second week of training in Fremont, CA at the Tesla Academy. According to Marvin, such an endeavor is far from cheap. “That’s two weeks of lost production in our shop that we would normally expect to get from that tech,” he explains. “We have to pay him, pay his travel expenses and pay for the training. When we prepare an estimate for these special cars, we consider the costs that went into being able to repair them. In many cases, there is also additional labor associated with the processes involved in how they are required to be repaired. The insurance companies don’t want to hear of it. They want to apply the same old template of their already broken estimating processes. It’s a constant battle to simply get what’s necessary to repair a client’s vehicle the way the manufacturer requires it to be repaired.” Audi has been very proactive in making information and training available to members of the insurance industry. Some of those members are receptive, while others choose to purposely keep themselves in the dark.

Executive Director’s Thoughts

There is no negotiating on sacrificing quality and safety. Knowing potential hidden electrical issues and keeping abreast of advancing technologies takes a commitment to both training and equipment. Those things, while expensive, are nearly impossible to avoid today and into the future. Something to consider when determining how to incorporate these elements into your business.

- Jordan Hendler

January 2014

HEADLINERS The latest news and notes.

PPG RECEIVES CLEARCOAT APPROVALS FROM CHRYSLER Chrysler Group LLC has given its approval for use of PPG’s innovative clearcoat products for warranty repairs on all Chrysler vehicles. The approved PPG clearcoats are ENVIROBASE High Performance EC800 Ultra Fast 2.1 Clearcoat, DELTRON DC2000 Ultra Velocity Clearcoat and NEXA AUTOCOLOR P190-6800 HS Express Clearcoat. Extensive testing has affirmed the three clearcoats’ key attributes: Quick drying, no flash time between coats, no baking and the ability to polish within approximately 30 minutes of application. With their reduced cycle times, the clearcoats can improve productivity, increase efficiency and cut energy costs while still delivering outstanding gloss, appearance and durability. “We are very satisfied with the performance of these premium PPG clearcoats and very comfortable giving our approval for their use,” said a Chrysler spokesperson. “The clearcoats are user-friendly, which our dealers’ collision center staffs will welcome, and the end result — an exceptional appearance — is something our customers will appreciate. PPG is helping us provide the highquality finishes we expect our vehicles to display.” EC800 Ultra Fast 2.1 Clearcoat is part of the PPG ENVIROBASE High Performance waterborne system and is also a 2.1 VOC air-dry clearcoat. P190-6800 HS Express Clearcoat is a 2.1 VOC air dry-compliant clearcoat designed for use with the PPG AQUABASE Plus waterborne refinish system. DELTRON DC2000 Ultra Velocity Clearcoat is a versatile clearcoat suitable for use with the DELTRON DBC, GLOBAL REFINISH SYSTEM and ENVIROBASE High Performance basecoats. For more information about these and other PPG products, call (800) 647-6050 or visit the PPG Automotive Refinish website at www.ppgrefinish.com. H&D

January 2014

Nuts and bolts, tips and tricks from our resident industry experts.

TECHNICAL

FEATURE THE OEM STANDARD

AND YOU:

ÂŠwww.istockphoto.com/BeholdingEye

BY LARRY MONTANEZ III, CDA & JEFF LANGE, PE

WHAT ARE YOU PREPARED FOR? For the past three to four years, the concept of formal industrybased repair standards has been a hot topic for many. We have written two articles on this subject, and to sum it up in a few words, we believe that the concept is ridiculous. Why? By and large, the original equipment manufacturers (OEMs) provide repair standards for their vehicles. The work has already been done by the people who made the vehicle you are trying to repair. We have also written articles about the definitions and meaning of words including, but not limited to: Endorse, evidence, guide, manual, opinion, procedure, prohibited, proof, recommendation, requirement, standard and suggestion. We have also explained that, in our experience, an OEM procedure trumps an industry-based procedure or practice. In a court of law, the judge only wants to know what the OEM says, PERIOD! Now, if you have read our articles, you already know that some OEMs do not produce standards. These include Hyundai and Kia, who do not publish collision repair information in the USA. Maybe a discussion about repair standards for these OEs may be necessary, but all the other OEMs do provide collision repair information. Although we believe there is a place for the development of repair standards for the OEMs, this article is about some of the changes in the repair procedures from the OEMs that have set standards.

Aluminum Construction We have written a couple of articles about vehicle design and construction, but we predicted back in 2004 that the all-new 2004 BMW E60/E61 (5/6 Series) would be the future of automobile design. We made this prediction based on rumors about aluminum-intensive vehicles such as the Acura NSX, Audi A8, Honda Insight and Jaguar XJ in 2004. Well, skip forward 10 years, and the Audi A8 and Jaguar XJ are still aluminum-intensive vehicles, but OEMs have added the

January 2014

Audi R8, Jaguar XK, Land Rover Range Rover, Mercedes-Benz SLS (197), Tesla and almost every high-end exotic super car to the list of aluminum intensive construction. Conversely, over the past 10 years, the OEMs have produced aluminum-steel vehicles, commonly referred to as hybrid-construction vehicles. These vehicles included, but were not limited to: Audi TT, Mercedes-Benz CL (216) and S (221 and 222), Porsche 911 (991) and Panamera (970). Most late-model Audis, BMWs and even the Cadillac ATS have steel construction with aluminum strut towers. Rumor has it that Fordâ&#x20AC;&#x2122;s all new F-150 will have an aluminum-intensive body. Repairs to aluminum-intensive vehicles require a lot of investment, training, specific welding certifications (generally to an ISO standard), specific tools, riveting and structural repair equipment and specific materials. Some programs have parts restrictions and (of course) dealer sponsorship is generally required. Even the aluminum strut tower vehicles require specific adhesives, rivets and tools for replacement of the tower. Repairs to these vehicles are not for every repair facility to attempt. Welding Equipment and Requirements We mentioned aluminum vehicles and welding in the previous section. There are specific Metal Inert Gas (MIG) welders required to weld aluminum-intensive vehicles. What about welding steel vehicles? Most OEMs prefer Squeeze Type Resistance Spot Welds (STRSW) to Gas Metal Arc Welding (GMAW)/Metal Active Gas (MAG) Welding when welding on flanges. Many OEMs require STRSW only; others have requirements for rivets where the STRSW arms cannot access both sides of the weld area. More recently, OEMs are now requiring the use of Silicone Bronze/MIG Brazing to sectioning joints, either open butt or lap on fillet welds, on outer body panels and some very select inner structural reinforcement panels. OEs like VW, Mercedes-Benz, Honda and Toyota have repair

procedures that require silicone-bronze. Only a few OEM Collision Repair Programs require a specific MIG Brazing welder, while most give suggestions of which machine to purchase. The cost of a Program Aluminum MIG welder can exceed $15,000. STRSW machines generally run $20,000 or better for an approved one, but MIG Brazing machines are generally inexpensive and should run $500 to $1,000. MAG, MIG and silicone bronze welding all require different techniques and lots of practice. Of course, attending a training course is essential. Many technicians are surprised when they are tested during training and their welds fail. This is generally due to their technique, body position, eye sight, welding mask, incorrect training and/or a combination of theses.

Structural Repair Equipment We have written numerous articles on structural repair techniques, anchoring and equipment, but there have been some changes. The three most approved structural repair equipment makers are Celette, Car-O-Liner and CarBench (the forth is Global Jig and the fifth is Spanesi). These types of equipment are bench-type systems that use specific fixture jigs (Celette) or universal jigs (the others) to anchor the vehicle to the bench by affixing the anchors to mounting locations and not to the rocker panel flanges. At one time, these types of structural repair equipment were pretty much for the Germans and exotics. Well, this is not the case anymore. Chrysler now requires six- to eight-point anchoring on some of their vehicles. Chrysler has stated that this is required due to the rocker panel design and that they cannot support the applied forces.

Electronics With all the creature comforts and automatic safety features built into today’s vehicles, it is amazing that there are not more problems with their operation. Collision repairers must understand two important things about today’s electronically advanced vehicles. 1. Most vehicles will not set a Malfunction Indictor Lamp (MIL) for every single fault. In many cases, there can be multiple Diagnostic Trouble Codes (DTCs) with no MILs present. This is why it is imperative that repair facilities purchase code readers to know what may be wrong with a vehicle system.

2. Most collision-damaged vehicles will need a trip to the dealer for a multitude of reasons. Most dealers will have the equipment not only to reset systems, but also to initialize certain systems. There are scan tools available, such as the ASTech tool, that directly link over the internet to an OEM scan tool for a cost. It’s worth it to check out these options available to an independent facility, so as to try and alleviate that trip to the dealer.

Some OEMs require the parking sensors to be re-aimed if the fascia was removed from the vehicle. Most OEMs will require the Passenger Seat Weight Sensor be re-weighed after any collision event.

Back-up cameras really assist with backing and parking procedures, but some OEMs require the cameras to be re-aimed at the dealer due to the steering angle assembly. There are multiple OEMs with electronic assist steering systems that require specialized wheel alignments, and most of these vehicles are equipped with a ride height control system, which requires setting the alignment at multiple heights. Lane departure systems are equipped in a variety of vehicles, from the economy type all the way up to the luxury sedans to exotics, and this system may work with the parking assist system or have its own radar/sensor that requires adjustment and setting after a collision event. The Future is Now? As we mentioned above, the all-new Ford F-150 will be released with multiple aluminum panels. We predict that in the next two to three years, more and more high-volume vehicles will be released with more lightweight substrates to combat the CAFÉ rules. BMW has already released the all-new i3, which is a carbon fiber monocoque structure. Lamborghini already produces a carbon fiber center tub, but we think there might be a slight price difference and production amount between these two vehicles. Training, specialized equipment and investments will be required for all who want to stay in business. We see a lot of complaining and fighting going on in the industry today, and we understand the reasons, but what we don’t see is a lot of training, equipment upgrades and investment in the facilities. We cannot tell you how many times we've been to a shop and said, “Wow, this shop is cool. This is the most advanced shop we have ever seen - if it was 1980. This is like stepping through a time machine. This place belongs in the Smithsonian Institute!” DON’T BE THAT SHOP! Feel free to contact us if you have any questions.

Larry Montanez, CDA is co-owner of P&L Consultants with Peter Pratti Jr. P&L Consultants works with collision repair shops on estimating, production and proper repair procedures. P&L conducts repair workshops on MIG & Resistance Welding, Measuring for Estimating and Advanced Estimating Skills. P&L also conducts investigations for insurers and repair shops for improper repairs, collision repairability and estimating issues. P&L can be reached by contacting Larry at (718) 891-4018 (office), (917) 860-3588 (cell), (718) 646-2733 (fax) or via email at info@PnLEstimol ogy.com. The P&L website is www.PnLEstimology.com.

Jeff Lange, PE is president of Lange Technical Services, Ltd. of Deer Park, NY (www.LangeTech.net). Jeff is a Licensed New York State Professional Engineer who specializes in investigating vehicle and component failures. Lange Technical Services, Ltd. is an investigative engineering firm performing forensic vehicle examinations and analysis for accident reconstruction, products liability and insurance issues. Jeff can be reached at (631) 667-6128 or by email at Jeff.Lange@Lange Tech.net. H&D

January 2014

COVER

STORY

They’re unpopular, controversial and viewed by many as the potential downfall of the collision repair industry. And now they’re here. For Maryland and Virginia shops currently involved in the State Farm Select Service program, the start of the New Year has meant bracing themselves for the arrival of PartsTrader, just one of many insurer-mandated parts procurement systems currently underway across the country. Despite nearly two years’ worth of protests by WMABA and a slew of other industry associations, State Farm continues in its mission to increase their visibility and involvement in the parts-ordering process at their participating DRP shops – and influence dealers and alternative parts suppliers to “compete” for business through this bidding system. Ultimately, State Farm is looking to manipulate every aspect of the parts supply chain to operate in the way that best suits their needs, regardless of what suppliers and end-users want, like or need. Not surprisingly, the news that PartsTrader will soon infiltrate the Mid-Atlantic market has led WMABA Executive Director Jordan Hendler to field more calls from

January 2014

News, updates, issues and concerns of the industry.

association members than at any other time in her career. “I have yet to talk to a shop who is using PartsTrader that thinks this has improved their business,” she says. “It doesn’t get any simpler than that.” By the time this issue of Hammer & Dolly is in your hands, WMABA will be hard at work promoting a possible antidote to the PartsTrader dilemma: Key legislation that will make these types of program requirements illegal in Maryland. WMABA hopes to propose similar legislation in Virginia by the 2015 session. The Maryland bill recently filed by the association would prohibit an adjuster, appraiser, insurance producer or employee of an insurer from requiring a motor vehicle repair facility to use a specific vendor or process for the procurement of parts or other materials necessary for the repair of a motor vehicle. The push in Annapolis is the latest in a series of activities that WMABA has undertaken over the last several months to bring muchneeded attention – and possible legal remedies – to the parts procurement debate. Like several other industry representatives,

Dealers Pay to Play Just as the holiday season began to add its usual amount of stress for automotive business owners across the country, PartsTrader announced its initial fee structure for participating dealerships. Effective February 1, 2014, the minimum rate for parts suppliers to use PartsTrader will be $19 per month. According to a company statement, “based on a specific level of sustained ordering activity, a supplier’s order volume through PartsTrader could move a company into one of three higher monthly pricing tiers, with a maximum subscription fee of $199 per month (emphasis added). Interestingly, dealers that ONLY supply parts to their wholly owned collision facilities will qualify for the minimum monthly rate; however, the reported fee structure indicates that suppliers that supply to both their own dealer-owned facility and to others in the market would still be charged respective to their overall order volume. The statements adds, “Parts suppliers supporting each active state will be offered the opportunity to try the PartsTrader system at no charge for six months before incurring a subscription fee. This will allow any supplier time to fully evaluate the benefits and potential cost associated with the PartsTrader system.” More information on the new pricing structure is available at www.partstrader.us.com. “We are pleased with the progress of our rollout to date, as 14 states are fully launched and another 14 will be coming on board in the next 90 days,” offered Dale Sailer, PartsTrader’s vice president of business development, in a prepared statement. “Within those markets, a growing number of repairers are choosing the PartsTrader platform for all their parts procurement needs.” While Sailer paints a positive picture of the dealership side of the PartsTrader equation, the unprecedented number of parts vendors contacting the WMABA offices in recent weeks with concerns suggests otherwise. “Parts vendors have a large concern about losing their existing

Parts Trader: THE BIG QUESTIONS

As a way to help you gain the clearest possible picture on PartsTrader, here are some useful questions shops should consider asking their State Farm representatives when discussing the program:

Hendler has spent the better part of two years representing WMABA’s concerns at CIC and other industry events that State Farm representatives also attend. Considering how vocal the association has been on this issue, wouldn’t it make sense for State Farm — perhaps even insurer spokesperson and current CIC Chairman George Avery — to engage Hendler and other WMABA reps and discuss these issues out in the open? Of course it would…which naturally means it hasn’t happened. “Overall, State Farm isn’t talking anymore,” Hendler says. “More importantly, I don’t feel as though we’re being handed the truth. We hear the same information time and again across the public forums, which is mostly corporate rhetoric and regurgitated material. I think they would find far less ridicule if they were to speak candidly and more importantly - honestly with their ‘partner’ shops about how to make the system better and more efficient and turn it into something that provides value to both sides of the table. In my opinion, they need to give up the strong-arm tactics before they obliterate the decent reputation they had with repair facilities, or find themselves in more costly positions than the money they tried to save.”

What happens when my preferred parts provider chooses not to participate in PartsTrader? I have heard that others using the system have seen quotes from suppliers in other states; would I receive quotes from suppliers outside of the state or my market area? How does ordering a part from a dealer in another state aid in my shop’s cycle time and efficiency, especially if there is a problem with the part I receive? Will I ever have to provide a credit card or COD for parts I am quoted?

When will it be possible for my shop to receive a quote from a participating dealer in under 30 minutes? What happens if I sign up, as requested, but only use PartsTrader when I feel it is appropriate, and use traditional ordering practices when I think it is a better option? Why did PartsTrader decide to remove the fax option?

What happens if I find a dealer willing to supply my parts with greater efficiency or maybe better price than your PartsTrader providers, but they refuse to use the program? Wouldn’t prohibiting me from using this dealer defeat the supposed purpose of PartsTrader to begin with?

What are State Farm’s plans regarding the procurement of paint and materials for their Select Service shops?

What are some examples of State Farm revising the PartsTrader program as a result of concerns and suggestions offered by shop users? January 2014

customer relationships or having unnecessary impositions on their process in order to keep their existing relationships,” offers Hendler. “This is especially concerning if they lose them to vendors that are not even in the area, or state, for that matter. Another facet of this is the ability to sell parts to their own dealer collision centers. Shops show similar apprehension about losing existing relationships, but also the added administrative burden of a program that has not been shown to improve efficiency for anyone. They are also looking at the dollars in parts profit that could be potentially lost if the market is manipulated by an outside influence and what that could mean for the entire landscape of our industry. This boils down to the fact that this is not within the business of insurance and making people whole; it’s about corporate greed. It’s no coincidence that the insurance commercials plaguing our media are for auto coverage; it’s their biggest profit center – and it’s all on the back of our industry.” Hendler is quick to add that the potential effect on the consumer – supposedly the most important part of any insurer-shop relationship

January 2014

– is missing from most conversations on parts procurement. “With increased pressure on parts choice and price, customers are limited to the portal availability,” she says. “This isn’t fair to them, as they’ve paid premium dollars to have their car repaired to pre-accident condition, at the shop of their choice, and in the manner in which the shop recommends is best for them.” With PartsTrader’s pricing announced only a few days before press time, it is too early to truly know how dealers – the entities that will ultimately drive the success or failure of the PartsTrader platform – will respond to these new financial and logistical burdens. WMABA is also promoting that the OE parts vendors contact their respective Dealers’ Association (VADA, WANADA or MADA) — and that Used/Aftermarket companies contact their associations as well — to discuss their concerns with them. Showdown in the Midwest With WMABA gearing up to get in the legislative ring with PartsTrader, the Alliance of

Automotive Service Providers of Minnesota (AASP-MN) has already been through the legislative trenches over the parts procurement issue and is now working on enforcement. Last October, they announced that they had filed a formal complaint with the Minnesota Department of Commerce requesting administrative and legal action to prevent State Farm from issuing parts procurement mandates to Select Service shops in the state. The association’s reasoning was that State Farm’s partnership with PartsTrader would be in violation of a sixyear-old state statute (72B.092, subd. 1[6]), which prohibits insurers from specifying “the use of a particular vendor for the procurement of parts or other materials necessary for the satisfactory repair of the vehicle.” For nearly 18 months now, AASP-MN has met and corresponded with the Department to express concerns regarding State Farm’s plans to implement PartsTrader in Minnesota. But according to AASP-MN Executive Director Judell Anderson, the Department has been reluctant to act. “We have really been pressuring the Department to respond to our complaint and make a decision,” she says. “The hang-up in their mind as far as being able to investigate and make a decision on this earlier was the fact that the program was not yet implemented. Our argument was that it didn’t matter if the program is implemented or not; as long as it’s mandated, we believe it was the mandate that violated state law. But they took the position that until the intent was clear that this was going to happen here, they weren’t going to jump in.” With State Farm’s imminent requirement to use PartsTrader in the state– and after meeting with State Farm, who confirmed their intention – the Department is currently analyzing the legal and regulatory ramifications of the plan. An official Department ruling on the mandate had not been reached at press time. “Even if the Department agrees with us and concludes that the program is in fact illegal in Minnesota, it will likely go into effect anyway because once the Department issues its order, that initiates due process,” reveals Anderson. “Assuming that it goes our way and the Department issues a cease-and-desist order, at that

point State Farm could go to district court and seek a stay. If they were successful in getting that stay, the order would not go into effect while those administrative proceedings are pending.” Although the jury is still out in Minnesota at the time of this writing, it is clear that the issue of insurer-mandated parts procurement has galvanized the national auto body industry like nothing before it. “State Farm went too far,” Anderson says. “When you pile something this significant on top of all the other little things, you reach the tipping point.” In addition to WMABA and AASP-MN, repair professionals in Florida and Mississippi are currently pursuing their own legal solutions to parts mandates (see National News, page 18). But even with multiple associations fighting for the rights of their members, it is ultimately up to the shops on the program to decide whether or not PartsTrader or any other DRP-driven parts system enters their market. “They all have to make an individual decision,” insists Hendler. “Some don’t want to participate at all, some want to try it out initially and some say they just don’t feel like their business model would survive without it. Listen, I know that there are families to feed attached to all the business decisions that a shop makes. I just encourage them to look at all the options before deciding. Make an informed decision, not an emotional one. There are many shops out there that are doing well without being on the program. They have a strong community presence, and strive to market themselves to offset these issues. Some even have said that they are doing slightly less work, but are more profitable. It all comes down to the individual at the end of the day.” H&D

Executive Director’s Thoughts We want to make clear that there is a difference between making a personal business decision and helping the association. Deciding to use the system does not mean you can’t stay involved with the association and assist where you can. - Jordan Hendler

January 2014

HEADLINERS The latest news and notes.

NEW CCC PARTS PLATFORM CAUSES CONCERNS CCC Information Services has entered the parts business. As reported in our November 2013 issue, the company recently announced the launch of its CCC TRUE Parts Network, a parts-focused initiative “that is connecting the industry’s parts suppliers with CCC’s expansive customer base of repairers and insurance carriers.” According to a company press release, the CCC TRUE Parts Network integrates with the CCC ONE platform to provide “parts suppliers of all sizes with a suite of solutions to display their parts, provide realtime price quotes and electronically sell their available parts inventories as estimates are being written.” Insurance carriers using CCC ONE can view parts and receive real time quotes; repairers using the CCC ONE Repair Workflow solution “have the same functionality, plus the ability to electronically purchase parts.” Bill DiRusso, parts director at major Delaware-based wholesale parts dealer NUCAR (www.nucarparts.com), recently met with CCC representatives to gain insight into what CCC TRUE has to offer. As DiRusso reported in the November 2013 issue of New Jersey Automotive, “[CCC] are stating that it’s just a tool and the next step from CCC ONE. CCC TRUE would be the tool to check availability, pricing and ordering…It’s not bidding, but as a dealer I would have to subscribe and allow my inventory, availability and pricing to be out there for shops to view. They would have anonymous global information, but they’re saying they wouldn’t give out any individual shop information to any insurers.” Although he was open to any program that would add efficiency to his operation, DiRusso expressed some initial concerns that needed to be addressed before he committed to the CCC TRUE system. “In some cases, I could lose individual parts sales if I was out of something for today,” he said. “If a shop decides to buy based on availability or pricing, that doesn’t guarantee what time or what kind of service they’re going

to get from their vendor. You could have dealerships out there trying to win a price war but still not have the delivery service, return service and expertise. It all depends on shops’ loyalty to their vendors.”

An in-depth feature on the CCC TRUE Parts Network will appear in next month’s issue of Hammer & Dolly. H&D

January 2014

An association fostering the exchange of ideas, and providing a voice and support for the collision repair professional.

OFFICERS

PRESIDENT: Don Beaver Dbeaver@antwerpenauto.com 443-539-4200 ext. 17061

VICE PRESIDENT: Torchy Chandler torchy.chandler@gmail.com 410-309-2242

SECRETARY: John Krauss jkrauss@craftsmanautobody.com 703-534-1818

TREASURER: Mark Schaech Jr. mark@marksbodyshop.com 410-358-5155

BOARD OF DIRECTORS

Rodney Bolton rbolton@aacps.org 410-969-3100 ext. 250

Mark Boudreau crashdaddy@aol.com 703-671-2402

PAST PRESIDENT: Barry Dorn bdorn@dornsbodyandpaint.com 804-746-3928

Position Your Business as a Leader! Just like equipment and training, WMABA membership is not only a commitment to excellence, but also a valuable investment. WMABA is recognized both regionally and nationally as the key forum for the exchange of ideas concerning the D.C., MD, and VA collision repair industry. It is the venue to discuss, learn about and impact evolving standards and policies in the technical, administrative and legislative fronts of our industry. Shops and industry supporters can best develop themselves and their employees by actively engaging in the association and its activities. Automotive collision repair facilities in Maryland, Virginia, and Washington, D.C. who are willing to adopt WMABA’s Standards of Membership and offer a guarantee to their consumers are encouraged to engage their business as an active member of the association. For over 40 years, the WMABA membership of professional collision repair businesses and affiliates have committed to operating at a higher standard on behalf of their industry and their consumers. Over the years, WMABA has proudly represented the collision repair industry at hearings on Capitol Hill, in Annapolis, MD, and Richmond, VA as well as almost every national collision repair event. While WMABA has a rich history of dedicated men and women serving the local collision repair community, WMABA also boasts numerous past and current accomplished board members who represent our membership at the national level. WMABA offers current and dynamic discussion forums on topics facing collision repairers, technical information and educational seminars, opportunities to network and discuss pressing topics with leaders of the collision repair industry, an arbitration program that works with consumers to help resolve issues they might have, apprenticeship programs, legislative representation, and the ability to receive and contribute to one of the nation’s leading collision repair magazines, Hammer and Dolly.

Kevin Burt kevinburt@walkermillcollision.com 301-336-1140

Bobby Wright bobby@burkevillebodyshop.com 434-767-4128

EXECUTIVE DIRECTOR: Jordan Hendler jordanhendler@wmaba.com 804-789-9649

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Contact Executive Director Jordan Hendler to find out how WMABA can amplify YOUR voice in the collision repair industry.

January 2014

EXECUTIVE DIRECTOR’S

MESSAGE

Jordan Hendler

(804)789-9649 jordanhendler@wmaba.com

WMABA’s 2013 Annual Meeting and Holiday Membership Social was the best-attended event of its kind in recent memory. (See pg. 16 for a full rundown of the evening.) As I addressed the crowded room and updated them on progress of insurer-mandated programs like PartsTrader, I got the same feeling from these attendees that I get when I speak to our membership on the issue of insurer mandates: That they feel trapped, no matter which side of the issue they decide to support. I’m here to tell you that that could not be further from the truth. First and foremost, I want to make it clear that no shop is going to be blackballed by WMABA for choosing NOT to say no to PartsTrader. Choosing to remain on State Farm’s Select Service Program – or not – is a business decision that you as a shop owner have to make. (And while we’re on the subject, WMABA is NOT against parts procurement programs, electronic or otherwise. What we ARE against is their REQUIRED or MANDATED use.) Regardless of the business decision you make, you can not only continue to be a productive member of WMABA, but you can also continue to help change the mandated parts procurement issue. If you are a shop in Maryland, for example, I urge you to be a part of our upcoming Lobby Day on January 22. This event is going to be so important to our members, to ease you into not only meeting your legislators and making important inroads at the State House, but also into understanding exactly what WMABA’s proposed legislation will do about the issue. We will also be offering assistance to our Virginia shops in meeting their legislators, and are planning to

NEW YEAR, NEW DIRECTION!

address the issue of insurer mandates in that area as well in the near future if change is not enacted soon. Let’s say you’re a shop owner who hates the idea of PartsTrader, but you’ve decided to remain a Select Service shop. Maybe you are merely testing it in order to make an informed decision before dropping out of the program altogether. Perhaps you’re participating because your DRP is your shop’s lifeblood. Regardless of the reason, if you’re on the program but don’t want to be, that’s OK. And if you want to do something about the issue without your name attached, we can make that happen. You can be anonymous. No matter whether you have rejected or accepted PartsTrader (or programs like it, because as we all know, PartsTrader isn’t the only one by a long shot), knowledge is power. Being present and participatory in WMABA’s upcoming fight against implementation of insurer-mandated programs in our area is crucial. And if you’re currently feeling like you were forced into a parts procurement program – or if you’re doing it as a business decision for your own shop – please know that WMABA will always be here to do everything in our power to keep you successful. We are all in this together, and together, we will effect great change. I wish each and every one of you a happy and healthy New Year. Let’s work on making 2014 a year of new directions and great success – TOGETHER. H&D

January 2014

ADVERTISERS’ INDEX Alexander & Cleaver............................23

Alexandria Toyota ................................21 All Foreign Used Auto..........................43

Audi Group ..........................................19 Axalta Coating Systems ......................6

BMW Group ........................................28-29 BMW of Bel Air ....................................IBC BMW of Fairfax....................................3

BMW of Rockville ................................IBC BMW of Towson ..................................IBC CAPA ..................................................4

Car-Part.com ......................................33 CCC One ............................................7

Chesapeake Automotive Equipment ..21

Empire Auto Parts................................43 Futurecure ..........................................31 Honda Group ......................................44 Hyundai Group ....................................24

I-CAR ..................................................45 Koons Ford ..........................................25 Mazda Group ......................................30

MINI Group ..........................................37 MINI of Alexandria ..............................25 Mitsubishi Group..................................48 Mopar Group ........................................11

Nissan Group ......................................32

NORTHEAST™ 2014..........................12 O’Donnell Honda ................................42 Packer Norris Parts ............................9

Porsche Group ....................................38

PPG ....................................................IFC P&L Consultants ..................................36 ProFinishesPlus ..................................9

Russel Toyota ......................................33 Safety Regulations ..............................50 Safford Fiat of Tysons..........................50

Subaru Group ......................................13 Tire Distributors Inc. ............................23

Toyota Group ......................................39

Valspar Automotive..............................OBC VW Group............................................15

January 2014