New England Automotive Report February 2016 by Thomas Greco Publishing, Inc.

AUT M TIVE Serving the New England Collision and Mechanical Repair Industry MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

February 2016 U.S.A. $5.95

Florida RICO Case HITS A WALL

CONTROVERSIES & Inside AASP/MA’s First Meeting of 2016 Keeping up with

TECHNOLOGY CHANGES www.grecopublishing.com

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New England Automotive Report

CONTENTS

February 2016 • Volume 14, No. 2

DEPARTMENTS VICE PRESIDENT’S MESSAGE by Adam Ioakim 8 | What’s the Deal with the AIB? SPONSOR SPOTLIGHT by Joel Gausten 18 | A Platinum Partnership: Bald Hill Stands in Support of AASP/MA NATIONAL NEWS 24 | Don’t Miss Out on NORTHEAST® 2016 by Jacquelyn Bauman 30 | RICO Suit Dismissed in Florida by Joel Gausten LEGAL PERSPECTIVE by James A. Castleman, Esq. 34 | Teardowns TOOLING & EQUIPMENT by Jacquelyn Bauman 47 | Equipment Experts Predict Trends for 2016 TECH CORNER by Jacquelyn Bauman 49 | Cars like Computers: How to Adapt to Industry Changes AASP/MA MEMBER SHOP SPOTLIGHT by Jacquelyn Bauman

51 | Sliech Auto Body, Inc.

COVER STORY 41 | CONTROVERSIES & COMPLIANCE: INSIDE AASP/MA’s FIRST MEETING OF 2016

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AUT M TIVE STAFF PUBLISHER

ART DIRECTOR

Thomas Greco (thomas@grecopublishing.com)

Lea Velocci (lea@grecopublishing.com)

DIRECTOR OF SALES

MANAGING EDITOR

Alicia Figurelli (alicia@grecopublishing.com)

Jacquelyn Bauman (jacquelyn@grecopublishing.com)

EDITOR

PRODUCTION

Joel Gausten (tgpjoel@verizon.net)

Donna Greco (donna@grecopublishing.com)

PUBLISHED BY: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963

www.grecopublishing.com New England Automotive Report is published monthly by TGP, Inc., 244 Chestnut Street, Suite 202 Nutley, NJ 07110. Distributed free to qualified recipients; $48 to all others. Additional copies of New England Automotive Report are available at $5 per copy. Reproduction of any portions of this publication is specifically prohibited without written permission of the publisher. The opinions and ideas appearing in this magazine are not necessarily representations of TGP Inc. or of AASP/MA. Copyright © 2016 by Thomas Greco Publishing, Inc. Images courtesy of www.istockphoto.com

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

SPECIAL ANNOUNCEMENT: 2016 AASP/MA Vocational Grants For 2016, AASP/MA is revising its Vocational Grant program to now make the funds available to Massachusetts vocational schools that wish to send auto body/collision repair students to the SkillsUSA National Leadership & Skills Conference in Louisville, KY this June. The event is for those students who win the SkillsUSA State Conference this spring. Raised at the AASP/MA MidState BBQ last September, the 2016 AASP/MA Vocational Grant funds will be used to help with the costs of hotel, airfare and other travel expenses to and from the National Leadership & Skills Conference. Massachusetts vocational schools can apply directly to AASP/MA for the Grant. For additional information, please contact AASP/MA at (617) 574-0741.

AASP/MA EXECUTIVE COMMITTEE More on the new Vocational Grants will be featured in next month’s New England Automotive Report.

PRESIDENT Molly Brodeur VICE PRESIDENT Adam Ioakim SECRETARY Gary Cloutier TREASURER Kevin Gallerani IMMEDIATE PAST PRESIDENT Paul Hendricks

AASP/MA STATEWIDE DIRECTORS

in Massachusetts February 3, 2016

Corrosion Protection

COLLISION DIRECTOR

February 9, 2016

Rick Starbard

AASP/MA DIRECTORS

Vehicle Technology & Trends 2016

February 11, 2016

Alex Falzone Kevin Kyes

Overview of Cycle Time Improvements for the Collision Repair Process

Michael Penacho Darlene Andrade Tom Ricci

February 17, 2016

Ray Belsito, Jr.

2015 Ford F-150 Structural Repair Training Course

Peter Langone

AASP/MA EXECUTIVE DIRECTOR Jillian M. Zywien 12 Post Office Square, 6th Floor • Boston, MA 02109 Phone: (617) 574-0741 Fax: (617) 695-0173 Email: jzywien@aaspma.org

WWW.AASPMA.ORG

February 23, 2016

Plastic & Composite Repair

February 25, 2016

Color Theory, Mixing Toners & Tinting

All classes held at Fuller Auto Body, Auburn, MA For more information, visit i-car.com New England Automotive Report

February 2016

VICE PRESIDENT’S MESSAGE

WHAT’S the DEAL with the AIB? ADAM IOAKIM

What is the AIB? This is a question I didn’t even have the answer to until just recently. The AIB is the Automobile Insurers Bureau, and unfortunately, they’re now at our doorstep. The AIB has just come out with a model auto policy that was newly approved by the DOI and significantly changes our industry in a potentially negative way. You can read about this updated policy in the Message from the Executive Director on page 10 and in our cover story on page 42. While no insurer is currently using this new policy (and the changes don’t go into any mass policies just yet), the language would adversely affect consumers and body shops if it does get accepted and filed into an insurer’s policy.

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New England Automotive Report

There are four points to the policy that I believe directly impact body shops. The first is the new language regarding Labor Rates – in which they state that the cost to physically repair the vehicle is based on “competitive prices” derived from shops on their direct payment plan. I am also concerned about the fact that this model policy would limit towing and storage. The new language additionally caps reimbursement on bodily injury claims. Although that doesn’t affect the shops, it certainly impacts our customers. Lastly, it would affect Assignments of Rights, and I know a lot of shops are undertaking cases of this sort at this time. Now, I don’t want to get everyone in an uproar just yet. Although the policy has been approved, no one is using it yet. However, I just want to stress the impact that this could have for shops if it does get

accepted by any of the major insurers. This issue affects all of us – referral and non-referral shops – equally. It doesn’t matter what your business model is; we all need to unite behind this cause. I encourage our membership and non-members to read the new policy, which is available on our website (aaspma.org), keep informed through our news-letters and to attend any upcoming meetings we have on this topic. We have a very thought-out plan in place to fight these changes, and we might need a call to action from shops in the Common-

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wealth to help us out. If and when the time comes, we may need you to be ready so you can keep control of your business and prevent the insurance companies from interfering more than they already do. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

ADAM IOAKIM is the co-owner of Hogan & Van Auto Body in Medford, MA. He can be reached at (781) 436-0366 or adam@hoganandvan.com.

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New England Automotive Report

February 2016

A MESSAGE FROM THE EXECUTIVE DIRECTOR

AASP/MA’s CONCERNS with the NEW AIB POLICY JILLIAN ZYWIEN

Dear Members, At the time of this writing, AASP/MA is preparing to host a Statewide Meeting to inform our members about the recently filed and approved standardized auto insurance policy. The Automobile Insurers Bureau (AIB) has filed a new Massachusetts Automobile Insurance Policy, which was approved by the Division of Insurance in October 2015. According to its website, the AIB has been the automobile insurance industry’s service bureau in Massachusetts since 1925, offering support for rates, rules and forms, as well as actuarial and legal services in private passenger and commercial auto insurance. The Bureau’s members are comprised of insurance carriers, including some of the state’s major companies: Allstate Insurance, Arbella, Liberty Mutual, MAPFRE, etc.

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The model policy may be adopted by each carrier, either in whole or in part, to reflect an insurer’s coverage and rules. This standardized policy does not automatically change insurance policies in Massachusetts; however, it sets the standard for insurers to use in their own specific filings. Any insurer that wishes to adopt the policy (in whole or in part) must still file with the Massachusetts Division of Insurance, but with the recognition that certain terms have already been approved. The current model policy contains new language that will adversely impact body shops and consumers if implemented. The last time the AIB filed a policy change was in 2008. AREAS OF CONCERN: Labor Rate. The most alarming change to the model policy is the addition of language to the collision, comprehensive and limited collision section, which

states, “The cost to physically repair the [vehicle] is the competitive price, which we secure from a licensed repair facility under our direct payment plan.” AASP/MA understands (and the AIB has confirmed) that this new language means that the insurer will calculate its rate for all body shops in the Commonwealth based on its referral shop program. Even if a consumer’s shop is not within the insurer’s direct payment plan, the consumer’s chosen body shop will automatically get their “competitive rate.” Towing and Storage. If a consumer’s motor vehicle is towed or stored, the new model policy states an insurer will only pay for amounts dictated by the Department of Public Utilities (DPU) relative to involuntary/trespass towing. This includes a maximum $90 rate for involuntary towing or trespass towing, while the storage rate for an involuntary tow is $35 a day, plus extra labor (if needed). Since the DPU cannot regulate the rate of voluntary tows due to federal preemption, the aforementioned rates do not reflect the actual market rate for voluntary towing. As a result, the policyholder will be responsible for any additional towing costs or costs for special equipment and hazardous materials clean up, like antifreeze or oil spills. Bodily Injury. The model AIB policy includes new language that states “[i]nsurers will not pay punitive or exemplary damages.” This new language has troubling implications for both individuals who have

caused accidents and, more importantly, those injured as a result of an accident. While the concerns outlined in this message will have an effect on the Commonwealth’s auto repair shops, your consumers will also be significantly affected. It is imperative that our members engage with their customers and let them know about these policy changes. If you are a member of the association, you can find a fact sheet and instructions on our website in the Members Only section. You may also contact the office with any questions you may have. Since the policy was released, the association has been engaged with legislators, other local and national trade groups and the Attorney General’s Office on this issue. Developments on this initiative will be featured in upcoming newsletters, member notices and New England Automotive Report. Sincerely,

Jillian Zywien, Executive Director

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

AASP/MA EXECUTIVE DIRECTOR JILLIAN ZYWIEN has been a senior account executive at Lynch Associates for over seven years. She can be reached at (617) 574-0741 or via email at jzywien@aaspma.org.

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AASP/MA ASKS YOU TO PLEASE SUPPORT OUR SPONSORS!

AASP/MA NEWSLETTER SPONSOR

WOLPERT INSURANCE Contact AASP/MA at (617) 574-0741 / jzywien@aaspma.org for information on becoming an AASP/MA sponsor! 16 February 2016

New England Automotive Report

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

PLANNED YEAR

JANUARY

MARCH

January 6 Board of Directors Meeting Statewide Meeting

March 22 Board of Directors Meeting Statewide Meeting

MAY

JUNE

May 13 AASP/MA BBQ

May 24 Board of Directors Meeting Statewide Meeting

JULY

Date TBD AASP/MA Golf Outing

SEPTEMBER

July 26

September 23

Board of Directors Meeting

AASP/MA Clambake

NOVEMBER

September 27 Board of Directors Meeting Statewide Meeting

Date TBD New England Automotive Repair Training & Trade Show Event

For more information, visit aaspma.org or contact Executive Director Jillian Zywien at jzywien@aaspma.org or (617) 574-0741

November 12

November 15

AASP/MA Casino Night & Annual Meeting

Board of Directors Meeting

Check New England Automotive Report for updated event info throughout the year. New England Automotive Report

February 2016

[SPONSOR] SPOTLIGHT by Joel Gausten

A PlAtiNum PARtNERshiP: Bald Hill Stands in Support of AASP/MA Although AASP/MA Platinum Sponsor Bald Hill is based in Rhode Island, they are easily one of the Massachusetts collision repair industry’s truest and most dedicated supporters. Stocking $2.1 million (including over $50,000 in engines and transmissions) in Mopar & Kia parts under one roof in Warwick, Bald Hill provides high-quality products for Dodge, Chrysler, Jeep, Ram and Kia. The parts department’s 15 trucks cover Rhode Island, Massachusetts, Connecticut and New Hampshire. Orders placed as late as 4:45pm can still receive Bald Hill’s dependable next-day delivery service. For the past two years, the Bald Hill parts operation has been overseen by Parts Director Matt Jarvis, who assumed his current position after already establishing a successful twodecade career at the company. Committed to fighting the spread of aftermarket parts, Jarvis offers OEM price matching through OEConnection. “We’re behind the manufacturers 100 percent with the programs that they’re pushing out,” he says. Additionally, the Bald Hill parts team is taking a strong stand against the use of aftermarket airbags by completely refusing to offer price matching options for those items. To help promote the benefits of OEM products and procedures, Bald Hill Wholesale Manager Don Cushing makes sure that his customers have access to manufacturer position statements if they encounter a question or concern during a repair. “We make copies of those position statements and try to hand them out as much as possible to the shops,” he 18 February 2016

says. “As the new position statements come out, shops are able to show them to the insurance companies. As an example, we had a customer who needed an airbag and wanted to know what else was required. We were able to go into moparrepairconnection.com, look up that information and send it to him. What started out as an airbag sale turned into an airbag sale with all the sensors and a steering column being replaced. At first, the insurance company balked until we sent those position statements and an article from Chrysler saying, ‘This has to be replaced.’ The insurance company ended up paying for the whole thing.” Away from their shops, Massachusetts repair professionals have come to know Bald Hill through the dealership’s extremely active participation in AASP/MA, which is strongly encouraged by owners Jim Hagan and Bob Petrarca, Jr. When you pull into the parking lot at any major association event, it is very likely that

New England Automotive Report

a Bald Hill truck will already be there. Not only will you encounter Cushing at these gatherings, but you’ll have a chance to say hello to familiar faces Anthony Pickett and Sid Simoes, two Bald Hill delivery/sales veterans who recently transitioned to full-time sales. Typically, the three parts pros are also joined by members of the wholesale sales team who take the time to be a part of AASP/MA’s after-hours activities. “This allows them to meet a whole bunch of our customers at once,” Cushing explains. “They get to meet the people they talk to on the phone.” “We like to support those who support us,” adds Jarvis. “We do know that not everybody who goes to the association [events] does business with us, but we feel that our presence there is needed. It allows us to open up avenues of information in a group atmosphere. We want our customers – the people who are members of the association – not to see us as guys who

Left to right: Anthony Pickett, Don Cushing and Sid Simoes

are knocking on doors all day long. We’re the human side to the industry.” Looking ahead, Jarvis hopes to work with repairers in building a greater understanding between the shop and dealer sides of the industry. For one thing, he stresses that the wholesale parts business isn’t just a race to offer the biggest discount. Just like a successful body shop, Bald Hill needs a fair and reasonable amount of overhead in order to provide exemplary service. As Jarvis says, “I can’t give you the best service if I can’t afford to give you the best service. It’s just like the guy out there painting a car. If he can’t get his Labor Rate from the insurance company, how can he produce an excellent product?” Despite facing common dilemmas, the Bald Hill parts team is already enjoying a thriving 2016. In addition to now offering more engines, transmissions and other powertrain items than ever before, the department has seen an increase in business thanks to the recent addition of a three-bay commercial truck center in Bald Hill’s

Members of the Bald Hill wholesale parts team. Front row (L-R): Kyle Girardi, Eric Rodriguez, Art Clark and Emery LaPlante. Back (L-R): Joe Nunes, Randy Lavoie, Joe Menge and Lee Miles

service department. Due to increased Internet sales through their popular eBay store (found under “bhparts_ wholesaleparts”), Jarvis and his crew plan to welcome an internet manager – the first hire of its kind for the department – to the Bald Hill family in the not-too-distant future. From ongoing sponsorship of AASP/MA to one of the fastest parts delivery systems in New England, Bald Hill offers shops in the Commonwealth and beyond a level of

unmatched service that shows just how much a professional wholesale parts enterprise can achieve. The Bald Hill parts team is available 7:30am-5:30pm Monday-Thursday, 7:30am-5pm on Friday and 8am-4pm on Saturday. For more information, please call (800) 822-3015 Option 1 for a live advisor or visit baldhill.com. Like them at facebook.com/baldhillparts.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

New England Automotive Report

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[NATIONAL] NEWS by Jacquelyn Bauman

Don’t Miss Out on NORTHEAST 2016 Trying to get away from the shop can be hard, even if it is for important industry events that can help you in your business. Having the disposable finances or available time to fly out to national trade shows can be exceedingly difficult. Yet for repairers in the Commonwealth, there’s a business-changing event occurring just a car ride away. Held March 18-20 at the Meadowlands Exposition Center in Secaucus, NJ, AASP/NJ’s 39th Annual NORTHEAST Automotive Services Show will provide industry professionals with the same level of personal improvement that can be found at a national gathering. From networking opportunities with peers and experts to investigating the newest and best shop technologies in the Northeast to attending invaluable seminars/panel discussions, this is an event that will help better every aspect of your day-to-day operations. This year, one of the biggest draws to the show is the impressive vendor attendance, as NORTHEAST is selling out booth space at a record-breaking pace. In addition to national entities such as American Honda Motor Co., BASF, Ford, PPG, AkzoNobel, Sherwin-Williams, Accudraft and more, there are also a number of area businesses that will be strutting their stuff to thousands of attendees. Rhode Island-based Walcom Thermodry (Warwick) will be one of many New England businesses found on the NORTHEAST show floor. Walcom Thermodry produces technology for water- and solvent-based systems that help to ensure faster drying times for both paint forms. Their products help improve production by cutting down the time spent on each job and diminishing the electricity costs associated with running compressors. Shops from Woburn to Chicopee to Brookline have all found the value in having Walcom products at their facilities, and Operations Manager Roman Skorik is excited to bring that opportunity to other body shop owners in the Northeast. “The best part about [the show] for us is the customers,”

he explains. “The face-to-face time you get with them there is unrivaled. We want to introduce our newest products to the market, and since the show is right in our backyard, it’s the perfect place to do so.” As the industry evolves, Skorik recognizes that the needs of repairers change as well. This year, Walcom will be introducing their carbon fiber spray gun at the show. “Things are changing,” Skorik says. “We’re trying to stay at the forefront of our industry so that our customers can stay at the forefront of theirs. We were ecstatic when we found out this new technology would be ready by the time NORTHEAST came around. There’s no better venue for us to get the word out about this product.” Even if your shop is equipped to your satisfaction, NORTHEAST still has plenty to offer. In addition to industry-leading exhibitors, the show is also home to a wide array of educational opportunities and association-related events. Industry mainstay and CollisionAdvice President Mike Anderson will be presenting at the show on Friday and Saturday. As anyone who has ever attended one of Anderson’s seminars before knows, they are can’t-miss discussions. Aside from Anderson, NORTHEAST will also host an OEM repair panel in which major players from the industry’s leading manufacturers will gather to discuss the ins and outs of their certification programs. For shops in the Commonwealth, one presentation that will stand out is a special examination on the implications of photo estimating to repairers, facilitated by CollisionHub Founder and CEO Kristen Felder. With such a hot-button issue permeating the local auto body field, this is guaranteed to provide the pertinent information that you need to know if photo estimating has impacted your business. Free pre-registration is now open for NORTHEAST 2016 at tinyurl.com/NEreg16. For more information about the show, please visit aaspnjnortheast.com. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

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February 2016

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February 2016

[NATIONAL] NEWS by Joel Gausten

RICO SUIt DISMISSED IN FLORIDA A high-profile class-action RICO lawsuit brought against the top insurers in the nation has been dismissed in a Florida court. As previously reported in New England Automotive Report (“Frustration & Litigation: The Insurance Industry Gets Served,” October 2014), the Crawford’s Auto Center Inc. and K&M Collision LLC et al. v. State Farm Mutual Automobile Insurance et al. litigation alleges that State Farm, Allstate, GEICO, Progressive, Farmers, Liberty Mutual and Nationwide conspired to control the cost of automobile repairs and also violated the Racketeer Influenced and Corrupt Organization Act (RICO) by creating artificial “prevailing” rates based on their DRP shops’ use of products by the industry’s three leading Information Providers (Audatex [AudaExplore], CCC or Mitchell). The 164-page suit, which also names the three IPs as well as USAA, Travelers and American Family as conspirators, claimed that the Defendant insurers (together with the three conspirator carriers) collectively hold 70 percent of the market “and control all

aspects of collision repairs, including establishing the industry standards for compensation paid to repair facilities.” Additionally, the suit alleges that the Information Providers “serve two masters” – the Defendant insurers as well as “the repair facilities, which must use the estimating programs to perform their work because the estimates are the only means by which insured repairs are paid.” The Crawford’s case was originally filed in the US District Court for the Northern District of Illinois, Eastern Division on April 30, 2014. Later that year, the case was transferred into the much-discussed Multidistrict Litigation (MDL) heard in the US District Court for the Middle District of Florida, despite the Plaintiffs’ objections. In a 19-page decision (available online at tinyurl.com/nwynnwv, courtesy of Repairer Driven News), Middle District of Florida Judge Gregory A. Presnell criticized the Plaintiffs for filing a “shotgun pleading,” a term commonly given to a legal complaint (or an answer to a complaint) that presents an excessive number

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of facts without clear organization to describe a defense or cause of action. Calling the complaint “likely 100 pages longer than it ought to be,” he noted that the Plaintiffs failed to effectively show that the Defendants participated in an illegal enterprise through a pattern of racketeering: The reader who makes it all the way through the Amended Complaint comes away with detailed knowledge of automobile repair industry minutiae but little information about what any Defendant did that was actually improper. For present purposes, however, the Plaintiffs’ failure to properly plead a pattern of racketeering activity overshadows their failure to describe the workings of these alleged enterprises. Presnell dismissed the case “without prejudice,” meaning that the Plaintiffs have an opportunity to file an amended complaint. New England Automotive Report will provide updates on the case as it develops. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

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[LEGAL] PERSPECTIVE by James A. Castleman, Esq.

tEARDOwNS There is an old saying that “bad facts make bad law.” This applies to courts and government agencies that make questionable legal interpretations in order to avoid what they perceive to be unfair results in cases where the underlying facts of the situation are odd or extreme. The problem is that once that legal interpretation is made, it becomes precedent and has to be applied in the future to cases with more mainstream fact patterns. I thought of “bad facts make bad law” when I was reading the reported discussion of the Auto Damage Appraiser Licensing Board (ADALB) regarding collision repair shops tearing down damaged vehicles before getting the approval of their customer’s insurer (“ADALB Targets PreInsurer Teardowns,”NEAR January 2016). The Board was looking at reports of possible improper behavior by some shops when deciding how to interpret its existing regulation language relating to teardowns. I became concerned that the Board would ignore what appears (in my opinion) to be the correct way to read the regulation, in order to diminish improper actions by a minority of shops. Moreover, I became concerned that the majority of shops – the ones that do it the correct way – would suffer if the ADALB actually adopts such an interpretation. (And it is possible that the ADALB may have made an interpretation by the time that this article goes to press.) thE tEARDOwN ISSUE One sentence of the ADALB’s regulation says, “If the appraiser determines that preliminary work or repairs would significantly improve the accuracy of the appraisal, he or she shall authorize the preliminary work or repair with the approval of the claimant and shall complete the appraisal after that work has been done.” The issue is whether this sentence applies to all appraisers, or only to insurance appraisers. Is it proper for a body shop to teardown a car so that it can write a more accurate appraisal, even if the appraiser for the insurer covering the loss has not authorized it? Or can the shop’s own licensed appraiser be the one to authorize the teardown? Of course, in either situation, the claimant has to give his or her approval. In my opinion, it is clear that the sentence in question applies to all appraisers. If the shop’s appraiser believes 34 February 2016

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that a teardown is necessary to be able to write an accurate appraisal, then he or she should be able to authorize the shop to tear down the damaged vehicle to the extent needed to be able to write an accurate estimate. My belief is based on two factors. First, the sentence says “appraiser,” not “insurance appraiser.” By definition, as set out earlier in the regulation, the word “appraiser” means “any person licensed by the Auto Damage Appraiser Licensing Board to evaluate motor vehicle damage and determine the cost of parts and labor required to repair the motor vehicle damage.” Body shop appraisers are obviously included in this definition. Second, under the regulation, every appraiser is supposed to specify “all damage” attributable to a loss when writing a damage appraisal. Body shop appraisers are required to write their own appraisals for the purpose of negotiation. Under the regulation, they “must” prepare an appraisal. It would appear to be impossible for a repair shop appraiser to be able to write a required appraisal with accuracy unless he or she could authorize a necessary teardown. In fact, it would seem to be more cost-effective for a shop appraiser to be able to authorize a teardown before the insurance appraiser comes to view damage to avoid the possible need for that appraiser to come back for a supplement. Despite all of this, there are reported abuses of the system, as noted in the ADALB’s discussion. Some shops may improperly tear down vehicles to such a degree that the insurer cannot tell what the true damage actually was, whether there may have been old damage or whether there might be other reasons for the insurer to deny part or all of

the claim. Additionally, some shops may unnecessarily tear down vehicles that are clearly total losses and then ask to get paid for it. whAt ShOULD A ShOP DO? If you are a body shop appraiser, what should you do if you believe that a teardown is needed for you to be able to write an accurate appraisal? First, get your customer’s authorization for it. This is required by both the ADALB’s regulations and the Attorney General’s regulations if you are going to charge for the procedure. Second, consider at least letting the insurer know in advance before you perform the teardown. If the insurer approves, then they have no excuse for disapproving of your actions. Even if they do not approve, they have been put on notice of what you are going to do. Third, take detailed pictures of the vehicle before you conduct the teardown. That way, you have evidence to present the insurer if they claim that they didn’t know there was unrelated prior damage, or if they question whether there is coverage for it. Fourth, if a vehicle is clearly a total loss, don’t tear it down. If you do, all you may be doing is aggravating the insurer and your customer. If the insurance appraiser comes out and doesn’t believe that it is a total loss, then

they are almost certainly going to approve a teardown at that time anyway and you have a better claim for charging for the procedure (and maybe even for some additional storage). GEttING PAID FOR thE tEARDOwN A final issue is whether a shop should be entitled to reimbursement for a teardown, even if it has not received an insurer’s authorization. In my opinion, if the teardown is legitimate, then the shop should be entitled to payment. After all, the work needed for the teardown has been done, and it was necessary in order to properly assess the damage. But let’s see what the ADALB says.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

Attorney James Castleman is a managing member of Paster, Rice & Castleman, LLC in Quincy, MA. He can be reached at (617) 472-3424 or at

jcastleman@ prclawoffice.com.

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CONTROVERSIES & COMPLIANCE: On January 6, AASP/MA hosted its first gathering of 2016 at the Assabet Valley Regional Technical High School in Marlboro. The Statewide Meeting served to inform attendees of critical insurance industry developments and state efforts to help shops stay in compliance with evolving safety and environmental regulations. A PROBLEMATIC POLICY AASP/MA executive team member Peter D’Agostino got the Wednesday night event off to a rousing start by offering an extensive – and troubling – discussion on the recent model standardized auto insurance policy filed by the Automobile Insurers Bureau (AIB), an association comprised of numerous insurance carriers operating in Massachusetts. Filed by the AIB last May and approved by the Division of Insurance five months later, the model policy is open for adoption by an insurer to reflect that company’s coverage and rules. According to a message on aaspma.org posted prior to the meeting, the AIB document “does not automatically change insurance policies in Massachusetts; however, it sets the standard for insurers to use in their own specific filings. Any insurer that wishes to adopt the policy [in whole or in part] must still file the same with the Massachusetts Division of Insurance, but with the recognition, [that] certain terms have already been approved.” This is AIB’s first model policy filing since 2008. Although no insurance company

Inside AASP/MA’s First Meeting of 2016 by Joel Gausten had officially filed this policy at the time of the meeting, D’Agostino noted that AASP/MA is actively following a strategic plan to address “some significant changes to the policy” that are “very concerning to the industry and to the consumers.” On the top of AASP/ MA’s list of issues is the AIB’s policy language related to the cost of a repair, which if adopted, could result in an insurer reimbursing Labor Rates based on pricing determined by their direct payment plan. D’Agostino warned that the AIB policy is also targeting towing and storage. “They now have tied the rate of reimbursement for towing and storage to the rate set by [the Department of Public Utilities] for involuntary tows,” he explained. “The language specifically says that the insurance company will only reimburse its consumer the rate established by law or regulation. There are no laws in the Commonwealth that establish the rate; there is only a regulation, and the regulation only applies to involuntary tows. It’s $90 for the hook and $35 a day for the storage; that is their maximum rate of reimbursement under this policy. If you charge your customer for site cleanup, glass cleanup [or the removal of] antifreeze [or] hazardous material, all those other charges – in theory – may not be covered.” If this language is embraced by insurers, repair shops may be faced with having to charge their customers the difference in costs associated with these services.

AASP/MA executive team member Peter D'Agostino updated members on controversial actions by the Automobile Insurers Bureau (AIB).

“If a consumer is told, ‘Hey, your insurance company doesn’t cover hazardous material,’ they would feel obligated to pay that bill,’” D’Agostino observed. “But if [shops] say, ‘Your insurance company does cover storage, but not at the rate I charge, so you owe me the difference,’ I think that’s where the challenge [exists].” Perhaps the greatest sting that consumers could feel from the AIB’s plan is in the form of new language that excludes carriers from having to pay “punitive or exemplary damages” which, in Massachusetts, usually refers to statutory penalty damages, like 93A damages for the insurer failing to settle a claim in good faith. With so much at stake for Massachusetts repairers and policyholders, AASP/MA is taking a proactive approach in combating the AIB’s initiatives. This includes (but is not limited to) asking various committee members

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in the Legislature to sign a letter to Attorney General Maura Healey asking her to investigate the legality of some of the Bureau’s suggestions. The association is also working to build a coalition with customer advocacy groups, personal injury attorneys, tow industry representatives and other parties that would be affected if an insurer moved forward with the AIB’s guidelines. “The reason this is significant is because [the AIB’s plan] hasn’t been implemented,” D’Agostino said. “To get the Legislature and the Attorney General to [look into] something that’s proposed is very difficult. But we felt that it’s so important to get ahead of this, and the people we’ve spoken to agree.” AASP/MA plans to host an extensive meeting on the AIB policy in March. Once finalized, information on the event will be posted on aaspma.org. The AIB’s policy is available online at tinyurl.com/hqmhuvm. For more information on the Bureau, visit aib.org. KEEP IT CLEAN In an effort to assist collision repair businesses in staying on top of numerous environmental health and safety requirements, the January 6 meeting included a presentation from the Massachusetts Office of Technical Assistance (OTA) following the AIB update. The OTA is a non-regulatory agency within the Executive Office of Energy and Environmental Affairs (EOEEA) that provides free, confidential, onsite technical and compliance assistance to manufacturers, businesses and institutions. In addition to assisting with issues related to the Toxics Use Reduction Act (TURA), the OTA also helps companies with energy efficiency and water and resource conservation. Recently, it put together the MassCar guide, an updated version of its CRASH Course publication developed in the ’90s with input from the Massachusetts Auto Body Association (MABA). The goal of MassCAR is to help auto shops understand and achieve compliance with requirements, and also help these companies gain insight into pollution prevention techniques and best practices. As 42 February 2016

practices. Shops that provide feedback or participate in training will receive a MassCAR certificate to acknowledge their efforts and contributions to this program and the environment.

Tiffany Skogstrom, environmental analyst for the Massachusetts Office of Technical Assistance (OTA), detailed some of the common safety issues found at body shops.

previously reported in New England Automotive Report (“AASP/MA Members Sought for Environmental Compliance Project,” May 2015), the OTA called upon collision repair facility owners and employees for their help in the review and revision processes. This endeavor was named the Sustainability Training and Auto Repair Shops (STARS) program. Shops that participated in the development of STARS became members of the Massachusetts Clean Auto Repair (MassCAR) Partnership and received special recognition for their contribution. The newly revised MassCAR manual is broken into three parts: • The MassCAR checklist, which is a summary of actions a shop can take to ensure that requirements are followed and to show its good-faith efforts to stay in compliance while protecting its workers and the environment. • MassCAR fact sheets, which include detailed information about key auto body and repair topics identified by the project partners. These fact sheets are intended to provide users with information, benefits, possible obstacles and steps forward for implementing each topic outlined. • The MassCAR Environmental Achievement Statement, a downloadable self-certification document that shops can use to advertise and celebrate their environmental

New England Automotive Report

During her overview of some of the common hazards and mistakes found on the shop floor, OTA Environmental Analyst Tiffany Skogstrom urged attendees to make sure they have Safety Data Sheets (SDSs) for all chemicals used in that facility. “You have to have those available for every chemical and in a place where all of your employees know where they can find it,” she explained. “If they spill something or something goes down the drain, they need to know how to handle it accordingly.”

OTA Environmental Engineer Marina Gayl discussed the importance of accurate recordkeeping and reporting.

Additionally, Skogstrom warned shops about methylene chloride, a compound found in paint strippers and thinners. “There’s a skull and crossbones next to it for a reason,” she said. “It causes cancer, but everything that causes cancer has a secondary health effect...It kills you. There have actually been fatalities from people who have used methylene chloride. If you can smell it, you’re already being overexposed.” And here’s another crucial tip from Skogstrom: “Latex gloves are designed to protect you from germs, not chemicals.” Offering perspectives on the much-discussed 6H Rule, OTA Environmental Engineer Marina Gayl noted that shops can petition the EPA

for an exemption from the regulations if they can demonstrate that they do not spray coating containing chromium, lead, manganese, nickel or cadmium. However, she stressed that the exemption must be properly filed in order to take advantage of it. “It has to be done,” she said. “You can’t just assume, ‘If I don’t have the chemicals, then I don’t need to do anything.’ You have to send in the petition.” The January 6 presentation was the first in a series of statewide education events that were scheduled through early February. (Remaining dates are available at tinyurl.com/ gtwmfzy.) Attendees will receive a hard copy of the MassCAR book, while the digital version will soon be made available at tinyurl.com/ jjxqx5w. For more information, please contact Tiffany Skogstrom at (617) 626-1086 or tiffany.skogstrom@ state.ma.us. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

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EqUIPMENt ExPERtS PREdict tRENds

foR 2016

As technology on vehicles continues to evolve, so must the equipment that is used to service them. Last year saw a multitude of changes hitting the industry, from new technological systems in commercial vehicles to aluminum becoming more widely used on one of the nation’s most popular vehicles, the 2015 Ford F-150. To address this rapid evolution in the field, equipment manufacturers are developing ways to solve the newest problems hitting shops. As Kevin Lombard of Massachusetts-based ProSpot distributor Lombard Equipment, Inc. notes, one of the most pervasive issues in the industry at the moment is the lack of good-quality technicians. To remedy at least some of the problems that accompany this dilemma, ProSpot has developed the i5, which has what Lombard refers to as “auto weld/smart weld” technology. “This machine adjusts the power, the squeeze pressure, you name it,” he explains. “All a technician has to do is pull the trigger and the machine starts welding. Our industry is so starved for experienced technicians, so this system helps to take B- and C-level techs and make them weld like an A-level tech because the machine is making all of the adjustments for them. You don’t have to have a lot of skill to weld like a skilled guy.”

“By improving the quality of their work environment, they can accomplish more.” - Tim Morgan

[TOOLING] & EQUIPMENT by Jacquelyn Bauman

In the same vein, Tim Morgan of Spanesi outlines one of the ways his company is working to make the demanding on-the-job work of a body shop technician a little less strenuous for an aging labor pool. “Of course, a big frame rack is going to be used for heavy structural or aluminum repairs, but as of right now, a lot of minor repairs are being done on the floor,” he notes. “Our Multi Bench system, an electrohydraulic lift suitable for lifting any type of vehicle, allows technicians to work on their feet as opposed to on their knees. As our employees age, we want to adapt to have some comforts for them. Getting technicians off of their knees makes them more productive, because the work is less physically demanding. By improving the quality of their work environment, they can accomplish more.” Looking ahead, Morgan and Lombard agree that the creation of more universalized tools is an equipment trend coming down the road. Lombard believes that universal jigging will become more popular as more vehicles adapt to aluminum technology, while Morgan predicts OEM certification programs will require more straightening benches with universal fixtures. Although Lombard points out that many of these rapid changes hitting the industry have been a wake-up call to a number of shops (causing them to pick their feet up and invest in new training and equipment), Morgan believes there is one aspect of the industry that is still lacking. “If they’re not already, technicians need to make sure they’re measuring a car electronically both before and after the repair,” he says. “When a car comes in, you need to know exactly what it needs, and you need to be sure when the repairs are over that it’s received all of those things. How can you know that if you’re not measuring? There’s a lot of repairs or small tweaks that are being done to make things fit as opposed to properly measuring from the beginning. That’s the key to the measuring system, to do it throughout the process. Measuring systems are going to become increasingly important in the technological changes facing our industry.” It is undeniable that recent years have been revolutionary in the automotive repair field, and Lombard and Morgan are not alone in predicting that the next two to five are going to continue to bring massive changes for shops. To continue to stay ahead of this constantly evolving market, training, self-reflection and consistent research are necessary. To find out more about the equipment mentioned in this article, visit spanesi.com and lombardequipment.com. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

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[TECH] CORNER by Jacquelyn Bauman

CARS LIkE COMPUtERS: how to Adapt to Industry Changes Only a few decades ago, computers used to be the size of an entire room. Fast-forward to 2016, and a computer with the same power can now fit in your back pocket. With a society that is becoming increasingly dependent on technology, it is no wonder that vehicles on the roads today are becoming more and more like the computers that help us run our everyday lives. So how do we stay ahead of the curve? New England Automotive Report touched base with Jake Rodenroth, director of client services at Collision Diagnostic Services (creators of the asTech scan tool) to help answer this question. Having presented on this topic at massive industry events like SEMA, Rodenroth has a unique perspective on what it takes to stay on top of the technology hitting your shops. In his mind, vehicle electronics require the same type of investigation as any other change impacting the market. “Like with any piece of vehicle technology – whether it’s an exotic metal that you’re working on like aluminum or ultra high-strength steel, or electronics like convenience systems or safety features – research is required to understand how the system works, how the various parts on the vehicle interface with that system and how any repairs to those parts can affect the way these electronics work,” he explains. Rodenroth notes that convenience systems on cars are hidden in many places, such as in a mirror assembly or a door handle. “As an industry, we’re accustomed to taking those parts out for repairs, and when we cycle a key and move a car with that part unplugged, the

control module senses an issue and can disable the system,” he offers. “We trigger a lot of electronic fault codes and we’re not aware of it because the dashboard tells us that everything is okay.” The disconnect within the industry on electronic systems is a training and awareness issue, which is why Collision Diagnostic Services has worked with I-CAR to update their diagnostics curriculum. For those who are curious as to what vehicles they should specifically be aware of when looking at electronic systems, Rodenroth gives the following examples: Highly optioned cars (Acura, BMW, Lexus) Luxury vehicles with advanced safety systems or convenience systems (hands-free, etc.) Hybrid and electric vehicles with systems like regenerative braking and elaborate cooling systems for battery packs However, it should be noted that almost all modern vehicles on the road today have features that can be disrupted by basic repairs. Bluetooth is a standard feature in most vehicles being offered due to hands-free legislation in a number of states. Rodenroth notes that the wiring for Bluetooth is often affected during trim procedures, as it tends to come out

when removing quarter panels. When dealing with any new procedure on the market, looking at OEM information is the most important step. “If shops don’t have access to OEM information, they won’t be able to stay in business,” Rodenroth warns. “You look at sectioning procedures and where the cut lines are on a quarter panel. If you’re not looking at the OEM information in those aspects of your business, you’re going to struggle with electronics.” Other than researching OEM information, Rodenroth’s biggest piece of advice is to scan a vehicle before and after the repair. “How do you know if the vehicle is correct if you didn’t pre- or postscan the car?” he argues. “How do you know what it came with? How do you know what it left with? If you scan the car and there are no faults, at least now you know there are no faults.” To illustrate his point, he cites one of his clients in Montana, who scanned 100 vehicles pre- and post-repair. In all but one case, he found a code on the vehicle. While he would prefer your scans be done with an asTech, Rodenroth simply cares that it’s being done at all. “If you don’t want to scan with an asTech, I’m okay with that,” he says. “Just scan it with something. Don’t scan it with nothing. It’s a considerable investment to use scan tools. You should

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February 2016

2016 MEMBERSHIP APPLICATION MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

As a member of the Alliance of Automotive Service Providers of Massachusetts (AASP/MA), I will abide by the association’s bylaws and code of ethics. I understand that membership in AASP of Massachusetts is non-transferable, and I must remain current with my dues in order to be a member in good standing. I understand that if I discontinue my membership that I must immediately cease using any association promotions, logos or materials. Additionally, I understand that as part of my AASP of Massachusetts membership, I will receive New England Automotive Report, the official publication of AASP of Massachusetts, faxes, emails and other mailings.

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PLEASE COMPLEtE thIS MEMBERShIP APPLICAtION AND REtURN It wIth PAYMENt tO AASP-MA OFFICE. 12 Post Office Square, 6th Floor • Boston, MA 02109 Phone: (617) 574-0741 | Fax: (617) 695-0173|jzywien@aaspma.org As required by the U.S. Tax Code, AASP of Massachusetts, Inc. informs its members that 75% of the dues paid to the association are tax deductible. The remaining 25% is allocated to legislative activities and is not tax deductible. 50 February 2016

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Sliech Auto Body, Inc. Having been a member now for almost six months, John has seen the value of the association and its impact on the industry. “When we band together, we have more power,” he states. “There’s strength in numbers.” Despite positive changes in the industry through the unification of Commonwealth-based shops, he is worried about what the future brings for the field. “The way they’re making cars nowadays, everything breaks,” he expresses. “It’s like the cars are made of plastic. I don’t know what the next generation of repairers are going to do.” Regardless of the direction the next few years will bring for automotive technicians, John is grateful for this industry and everything it has brought him and his family. Between his days at his shop and his spare time spent boating on the water, he is satisfied with the life he is leading. When all is said and done, he has one piece of advice for those who are looking to get the most out of the field they’re in. “Put your focus on learning,” he says. “No one can ever take your knowledge away from you. Learn how to repair cars right, learn how to run your business and learn how you can make it better for everyone around you.” MASSACHUSETTS

“When we band together, we have more power. There’s strength in numbers.”

BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

New England Automotive Report

by Jacquelyn Bauman

MASSACHUSETTS

MEMBER SHOP SPOTLIGHT

When things fall apart, someone needs to put them back together. This is something that everyone in the collision industry knows; for most repairers, it’s in their blood. John Sliech, Jr. of Sliech Auto Body in Feeding Hills is no different. Like many other shop owners, he got into the industry because of his father, who opened Sliech Auto Body in 1985. “I started in the shop when I was really young,” the second-generation repairer recalls. “I began by sweeping the floors, helping out around the shop, and eventually I got started working on cars. I didn’t go to school or anything; I just learned the trade hands on.” In the early 2000s, John and his brother Dennis took over the business after their father’s passing, and the rest was history. Recently, John was approached by AASP/MA Board member Peter Langone (Langonet Auto Body & Frame, Agawam), who informed him all about what the association does and how it benefits area shop owners. “Pete’s right down the road from me, so he stopped in one day to talk about the association,” he explains. “I was really interested in the work they were doing at the Capitol. I think the legislation stuff is the biggest part of why I joined.”

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[TECH] CORNER N

continued from pg. 49

look at the bulk of manufacturers you’re doing and what sort of solution fits you best. Whether it’s an asTech, an OEM scan tool or it’s from a dealership, there’s a lot of different ways for you to do it.” Collision Diagnostic Services is working on a number of ways to help the industry in this avenue. In addition to soon hosting four monthly blog posts with copious information on

pre- and post-repair scanning, they will also be holding quarterly webinars that are open to everyone – not only asTech owners. As Rodenroth says, these systems aren’t “something that’s going away.” For more information on Collision Diagnostic Services and asTech, visit astech.com. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

AUT M TIVE AD INDEX Allen Mello Chrysler Dodge Jeep Ram ......28 AP Media ........................................................21 Audi Group ....................................................29 Audi Shrewsbury ..........................................23 Axalta Coating Systems ..................................4 Bald Hill Chrysler Jeep Dodge Ram............19 Balise Wholesale Parts Express ....................20 Baystate Chrysler/Jeep/Dodge ..................31 Best Chevrolet/Best CDJR..........................IFC BMW Group ..............................................26-27 BMW/Mini of Warwick ................................14 Clay Subaru ......................................................9 Colonial Auto Group ....................................22 Empire Auto Parts..........................................43 Enterprise ........................................................11 First Chrysler-Dodge-Jeep-Ram ..................30 First Ford ........................................................30 First Hyundai..................................................30 Ford Group ....................................................37 Honda Group..................................................36 Hyundai Group ..............................................15 IkotecUSA ......................................................10 Imperial Ford ..................................................37 Infiniti of Norwood........................................39 Ira Group....................................................12-13 Kelly Automotive Group............................IBC Kia Group........................................................40 Linder’s, Inc. ..................................................54 Long Automotive Group ..........................OBC Mazda Group..................................................48 Mercedes-Benz of Shrewsbury ....................23 Mopar Group..................................................44 Mr. Pothole Man ............................................10 Nissan Group..................................................45 PPG ....................................................................3 Robertsons GMC Truck ................................35 Sarat Ford Lincoln..........................................43 Sentry Group ..................................................38 Steck ................................................................21 Subaru Group............................................32-33 Tasca Group ......................................................6 Toyota Group..................................................52 Village Auto Group........................................46 VW Group ......................................................53 Wagner BMW of Shrewsbury ......................23 Wagner Kia of Shrewsbury ..........................23 Wellesley Toyota/Scion ..................................8 Wheel Collision Center ................................31

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