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CONTENTS
April 2015 • Volume 13, No. 4
DEPARTMENTS NATIONAL NEWS 23 | VT Shops Win $53K Assignment of Proceeds Suit 24 | Parts in Prime Time: CNN Takes On the Aftermarket 26 | Consumer Websites Debate F-150 Repair Times, Costs IN THE AREA 25 | AASP/MA Shop Featured in ABC News Report on Unsafe Parts SPONSOR SPOTLIGHT 30 | Bernardi Auto Group: A History of AASP/MA Support by Joel Gausten
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FEATURES
TRAINING OPPORTUNITIES 33 | I-CAR Grows in Massachussetts
COVER STORY 18 | CAMARADERIE & COMEDY: AASP/MA HOSTS AN UNFORGETTABLE VENDOR APPRECIATION NIGHT
INSIDE AASP/MA MEMBER BENEFITS 34 | Getting Your Name Out There: Promotional Partners, Inc. by Jacquelyn Bauman
ASSOCIATION UPDATE 38 | AASP/MA “ON THE MOVE” CAMPAIGN TARGETS VOCATIONAL SCHOOLS, NON-MEMBERS
VOCATIONAL SCHOOL SPOTLIGHT 42 | Montachusett Regional Vocational Technical School by Joel Gausten
ALSO THIS ISSUE 7 | CALENDAR OF EVENTS 10 | A MESSAGE FROM THE EXECUTIVE DIRECTOR
LEGAL PERSPECTIVE 44 | The Department of Justice Auto Parts Shutdown by James A. Castleman, Esq.
14 | AASP/MA SUSTAINING SPONSORS 15 | AASP/MA VENDOR NIGHT THANK YOU 18 | A SPECIAL MESSAGE FROM AASP/MA PRESIDENT MOLLY BRODEUR 48 | AASP/MA MEMBERSHIP APPLICATION 54 | INDEX OF ADVERTISERS New England Automotive Report
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MidState Chapter Meeting Greater Lawrence Technical School 57 River Rd., Andover, MA For more information, visit www.aaspma.org.
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PUBLISHED BY: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963
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SkillsUSA State Leadership & Skills Conference Blackstone Valley Regional Vocational Technical High School 65 Pleasant St., Upton, MA For more information, contact Tom Ricci at (978) 562-5300 or bpcenter@yahoo.com. May 12 Statewide Meeting DoubleTree Hotel 5400 Computer Dr., Westborough, MA For more information, visit www.aaspma.org.
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 © 2015 by Thomas Greco Publishing, Inc. Images courtesy of www.istockphoto.com/IStock Photo.
MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
AASP/MA EXECUTIVE COMMITTEE PRESIDENT Molly Brodeur VICE PRESIDENT Adam Ioakim SECRETARY Gary Cloutier TREASURER Kevin Gallerani IMMEDIATE PAST PRESIDENT Paul Hendricks
AASP/MA STATEWIDE DIRECTORS COLLISION DIRECTOR Rick Starbard
AASP/MA CHAPTER DIRECTORS NORTHEAST CHAPTER DIRECTORS Alex Falzone Kevin Kyes SOUTHEAST CHAPTER DIRECTORS Michael Penacho Darlene Andrade MIDSTATE CHAPTER DIRECTORS Tom Ricci Ray Belsito WESTERN CHAPTER DIRECTOR 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
FOR A FULL LISTING OF UPCOMING AASP/MA EVENTS AND TRAINING OPPORTUNITIES, PLEASE VISIT WWW.AASPMA.ORG
WWW.AASPMA.ORG New England Automotive Report
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A MESSAGE FROM THE EXECUTIVE DIRECTOR
The vAlUe oF vendorS Dear Members, If you have attended one of our Statewide or Chapter meetings, you know we are committed to supporting those who support the association. Last month, we honored our valued sponsors and partners at our first quarter Statewide meeting. Their continued efforts create a foundation for this association, and I appreciate the contributions they continue to make. Please join me in recognizing those companies and consider using them in your business. You will find a complete list of our supporters on page 15 and on our website. Last month, we also brought on two new member benefit programs designed to save our members time
and money. The first is Cintas, who will provide our members with document shredding and first aid services. If you are currently using their products in your shop, please let them know you are an AASP/MA member and start saving today! The second is Promotional Partners, Inc. Their program develops a power buying group for members to save you real dollars on promotional products such as apparel, mugs and more! (More information can be found on page 34.) Both of these programs were brought to us by members who recommended their exemplary services. Please visit the Members Only section of our website to find out more about these new programs. Start saving today!
As we welcome in warmer weather, I am looking forward to seeing some new and familiar faces at our upcoming meetings and events. Our rescheduled MidState Chapter training program will be held on Tuesday, April 14 at Greater Lawrence Technical High School from 6-8pm. The presentation will focus on saving you money in your business. Vocational Technical School and Tool Grant Award night will be held on Tuesday, May 12. AASP/MA is committed to creating programs that benefit our members and opportunities for your business. Please visit aaspma.org to register and check out future upcoming events, like our annual Golf Outing at Charter Oak Country Club! In closing, support from our members and sponsors has been extremely positive, and I look forward to our continued growth and success. I hope you will join me in encouraging your fellow shops to participate in the association by attending meetings and events, joining (if they are not current members) and taking advantage of all the AASP/MA has to offer. We are working everyday, but we need your help in building the success of the auto repair industry. 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 six 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! 14 April 2015
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1-800 Radiator & A/C 180 Biz AASP/MA Western Chapter ABSAP Acura of Boston Admiral Fasteners AFLAC AkzoNobel Al Brodeur's South St. Albert Kemperle Amherst Oakham Auto Recycling Artioli Chrysler Dodge Auto Body Builders, Inc. Auto Data Labels, Inc. Autopart International Bald Hill Dodge/Jeep/Chrysler/Kia Balise Motor Sales Company BASF Auto Refinish Bedard Brothers Auto Sales, Inc. Bernardi Auto Group Best Chevrolet Body and Paint Center Boutiette Auto Body Brown Motors, Inc. Cape Auto Body CCC Information Services, Inc. Center Subaru Central Chevrolet
Cintas Colonial Ford, Inc. Don Kennet Ed's Auto Body Enterprise Rent-A-Car FinishMaster Future Cure G & K Services Gonnello SEO Greco Publishing Hendricks Auto Body Hoffman Auto Group Hogan and Van Auto Body Honda Village HUB International New England I-CAR Imperial Wholesale Intercontinental Insurance Solutions IRA Toyota of Danvers Jaffarian Automotive Group Keystone Automotive Industries Kwik Auto Body Supplies, Inc. Langonet, Inc. Lexus of Watertown Linder's, Inc. Lombard Equipment Long Automotive Lynch Associates, Inc.
Marcotte Ford Marlboro Nissan McGee Toyota Mercedes Benz of Natick MidState Chapter Mitchell 1 Montague Brown NAPA New England Collision Equipment Paster, Rice, & Castleman PPG Promotional Partners, Inc. Quirk Auto Dealers Rainbow Auto Paint & Body Supplies Route 16 Auto Parts-LKQ Sarat Ford Sherwin-Williams Spraybooth Services & Equipment Sales Sullivan Brothers Sullivan Tire Corporate Offices Tasca Automotive Toyota of Hanover, Inc. Wagner BMW West Springfield Auto Parts Wolpert Insurance Wreck Check of Boston
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Audi dealers strive to make you an Audi Genuine Parts fan • Audi dealerships have access to over 200,000 Audi Genuine Parts; no other supplier can make that claim • Six parts distribution centers provide daily overnight service to Audi dealers • Non-stocked items are available through the Audi computerized distribution and delivery network • Audi parts departments provide professional customer service that gets you the right part, the first time
Helping you do business is our business. Order Audi Genuine Parts from these select dealers. Audi Natick 549 Worcester Street Natick, MA 01760 www.bernardiaudi.com 800-247-3033 Fax: 508-651-6841
Audi Norwell 59 Pond Street Norwell, MA 02061 Direct: 888-744-8810 Parts: 781-261-5030 Fax: 781-878-1063 email: parts@audinorwell.com www.audinorwell.com
Hoffman Audi 700 Connecticut Blvd East Hartford, CT 06108 860-282-0191 Fax: 860-290-6355 www.hoffmanauto.com
Mattie Audi 80 William S. Canning Blvd. Fall River, MA 02721 800-678-0914 Fax: 508-730-1283 www.mattieaudi.com
Audi Shrewsbury 780 Boston Turnpike Shrewsbury, MA 01545 508-581-5880 Fax: 508-581-5880 email: parts@wagnermotors.com www.audishrewsbury.com Audi Cape Cod 270 North St. Hyannis, MA 02601 PH: 508-815-5600 FAX: 508-568-9410 www.audicapecod.com
IRA Audi 105 Andover Street Danvers, MA 01923 800-774-8411 Parts Direct: 978-605-2182 email: pwalke@iramotorgroup.com www.iraaudi.com
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CAMARADERIE & COMEDY:
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COVER STORY
AASP/MA Hosts an Unforgettable Vendor Appreciation Night
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fter such a harsh and unforgiving winter, the Massachusetts collision repair community found itself in desperate need of a fun night out and a chance to relax during an especially hectic time for our industry. AASp/MA delivered this (and so much more) at the association’s vendor Appreciation night on March 10 at the doubletree by hilton in westborough. industry support is the power that fuels any successful association, and AASp/MA wanted to create a special event that honored and celebrated those companies that consistently go above and beyond. with an active agenda planned for the rest of 2015, the association appreciates this high level of engagement now more than ever. Addressing the full room that gathered for the festivities, AASp/MA president Molly Brodeur summed up the gratitude expressed by all AASp/MA member shops.
ABOVE: The Vendor Appreciation Night drew attendance from Board members, shops and suppliers. RIGHT: AASP/MA Executive Director Jillian Zywien thanked the vendors in the room for their support of the association.
A SPECIAL MESSAGE FROM AASP/MA PRESIDENT MOLLY BRODEUR In our busy day-to-day operations, it’s a rare opportunity for us as collision repairers to be able to spend an evening “off the clock” with our business vendors. AASP/MA’s recent Vendor Appreciation Night enabled us to do just that, while also recognizing the impact that these businesses have on our ability as an association to advocate for the industry at-large. The support and backing from AASP/MA’s vendors has afforded us the luxury of hiring an executive staff that works full time to further our goals, as well as a lobbyist to fight for our initiatives on Beacon Hill. Our volunteer Board of Directors work hard to make our goals a
reality as well, but the truth is that these efforts take a lot of work, work that even our team of volunteers would be hardpressed to have the time for when coupled with their already full schedule of running a business. The financial support of our vendors has truly been a game changer; if not for them and their belief in AASP/MA’s commitment to the industry, we’d certainly not have many of our current association successes under our belt. We’re very lucky to have the level of support that we do, and truly appreciate each and every vendor who is just as committed to benefiting collision repairers as we are.
From the vendors we buy from to the member benefit providers who offer our shops services, I thank all AASP/MA supporters for their assistance in affording us the chance to change the industry for the better. And I encourage you to look closely at each and every name on page 15, and to support those who are supporting you. These companies provide an enormous value to our association, and I urge you to look to them first when purchasing products or services for your business. Thank you again to all of our generous sponsors and to all who helped make our Vendor Appreciation Night a success. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
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A NIGHT TO REMEMBER:
The AASP/MA community came out to give thanks to the vendors who keep it all running. New England Automotive Report
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COVER STORY “we really wanted to put this devito was truly the night’s highlight. evening on for all of you, to thank For nearly 90 minutes, this master of you for your steadfast support of mind control influenced hilarious acAASp/MA and the industry here in tions from a small group of particiMassachusetts,” she said. “if it pants. From dancing like ballerinas to wasn’t for all of you in this room, moving their bodies to the directions this organization wouldn’t be able to of a “voodoo doll,” these willing subdo what we do. [it is] vendor support jects kept the crowd in stitches. new like yours that allows us to hold England Automotive Report’s own Joel events and raise money for the assogausten was one of the attendees put ciation so that we can do the legislaunder hypnosis for the first time. tive work we do and continually “it was quite an experience,” he work on trying to improve the indusrecalls. “After being put into a deep Hypnotist Joe DeVito kept the try here in Massachusetts. For the hypnotic state, i was vaguely aware of crowd amazed and laughing. vendors, benefit providers and main some of the things going around me vendors in the room, we thank you very much. we truly and because of me, but not fully conscious of the fact that value your commitment to the industry. our mission is to i was doing so many things. Members of the audience always make sure that our members are utilizing your filled me in later, while more memories came to me on services and reaching out to you for whatever needs they the way home. Apparently, i was under for 90 minutes. have. Thank you all very much from the Board of direcincredible. And i’ll say this: i was certainly the most retors and executive Board for AASp/MA.” laxed i have been in long time!” while the food and camaraderie were outstanding, the special guest performance by renowned hypnotist Joe MASSACHUSETTS
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NATIONAL NEWS
vT ShopS win $53K ASSignMenT oF proCeedS SUiT It is possible to be paid properly for the repair work you perform. This reality was made abundantly clear on February 18, when Rutland, VT-based shop owner Mike Parker (Parker’s Classic Auto Works) walked away with a Vermont Superior Court jury verdict in excess of $53,000 in his long-running Assignment of Proceeds case against Allstate Insurance. Initially filed in October 2012, the suit enabled Parker’s Classic Auto Works to stand in the shoes of 70 Allstate insureds and request compensation for short-pays on work performed at the shop. These short-pays were in a multitude of areas, including paint and materials, sublet markup and P-Page operations. The amounts ranged from $20.67 to more than $2,800. According to Parker, Allstate was responsible for paying the full, reasonable and necessary amount of his repairs because they chose to settle the claim in money instead of completely replacing the damaged vehicle or repairing it themselves. “They were saying that I won’t negotiate or give agreed prices,” he explained. “They were trying to make that sound negative, that they get to call the shots and I won’t negotiate with them. The shops that do negotiate with Allstate come up with an agreed price, which becomes the cost of repair. However, there is nothing in the policy that states that a negotiation or an agreed price has anything to do with determining the cost of repair. It isn’t what they say it is; it’s a range. The question for the jury was, ‘Is Parker’s Classic Auto Works’ bill reasonable?’ And the answer they came back with was, ‘Yes.’” Additionally, Parker (who uses the PaintEx system to calculate his paint
and materials expenses) was able to score a victory for the industry’s ongoing fight to receive appropriate P&M compensation. “We were able to bring out the fact that they use an arbitrary dollar value that has nothing to do with anything, multiplied by refinish hours that they regularly reduce,” he says. In addition to awarding Parker $35,091.58 for the short pays, he was also awarded $18,167.69 in pre-suit interest. This pre-suit interest is a matter of law in Vermont. The rate was set by the legislature at 12 percent per annum and accrued from the date each invoice was presented to Allstate to the date of the jury verdict. Parker is currently pursuing similar legal actions against a variety of other carriers. Parker says his biggest takeaway from his experiences in court is that Allstate failed to abide by the actual policies they sold to consumers. “It’s very simple,” he says. “They had the option to take control, and they opted to allow the vehicle owner to be the general contractor. They should have stepped out of the picture at that point.” “The juries get it; it’s not complicated,” adds attorney Robert McClallen, who represented Parker in the Allstate case. “The bottom line is that when a person takes his or her car to an independent body shop to get work done, why wouldn’t the independent body shop be able to charge a reasonable fee for the repair? They also get the idea that the only one with skin in the game is the independent body shop – the one who is actually doing the repair. If the repair isn’t good, he or she is the one who is ultimately responsible.”
Unsurprisingly, this philosophy played out in a huge way during the court proceedings. “We asked the Allstate folks, ‘How many repair shops do you have?’ They said, ‘None,’” McClallen recalls. “We then asked, ‘How many repairs do you do on vehicles?’ They said they didn’t do any repairs. We asked then point blank, ‘So if Mike Parker fixes this car, your insured is indemnified by you, you pay the repair bill and the repair is done poorly, can your insured come back on you?’ They said no. Who would they come back on? Mike Parker.” By utilizing the Assignment of Proceeds option, Parker was able to allow his customers to take their cars off the lot, despite the fact that the repair bill was not paid in full because each owner assigned his or her rights to Parker’s Classic Auto Works to go after the remaining dollar amount for the reasonable repair. After years on the front lines of the repairer/insurer debate, McClallen is pleased to see his client experience such a substantial victory. “Mike has been at this for a while, and he’s had the courage to really push these things and take risks,” he says. “I’m glad it’s paying off for him now.” MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
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NATIONAL NEWS
Image courtesy of www.cnn.com
Parts In PrIme tIme: Cnn takes On the aftermarket It was 11 minutes that could change this industry forever. On February 11, Anderson Cooper 360° on CNN aired a special report, “Are Cheap Repairs Part of an Insurance Scheme?” that offered a penetrating look into allegations of steering and unsafe parts usage within the auto insurance industry. The segment (available for free online viewing at http://tinyurl.com/CnnCheaprepairs) not only detailed how the use of aftermarket parts could compromise the safety of a repaired vehicle, but also informed viewers of the much-discussed multi-state lawsuit filed by hundreds of body shops across the country against a number of insurers. The CNN report was unquestionably the first time that matters of this nature were brought to the motoring public’s attention on such a grand scale. Not surprisingly, the broadcast’s shockwaves quickly hit the Commonwealth. “We received a lot of positive feedback from the membership on the CNN piece,” says AASP/MA Executive Director Jillian Zywien. “It is encouraging that the issues facing our members on a daily basis are receiving national attention. Many consumers aren’t aware of their rights and choices when it comes to repairing their vehicle. National news reports, like the one from CNN, shed light on a very real issue facing body shops and consumers. AASP/MA continues our advocacy on behalf of the industry and its consumers.” As New England Automotive Report reached out to a number of AASP/MA members throughout the state for their perspectives, it was immediately clear that the CNN 24 April 2015
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story inspired a variety of strong opinions. Speaking with this publication after being promised anonymity, these repair professionals made it clear that they are fed up with using certain non-OEM parts. Pleased to see the aftermarket parts issue finally hit the mainstream media, one member appraiser was quick to share his reluctance to use many of these products in the jobs he writes. “Technically, they’re not really bringing the car back to pre-loss condition,” he said, “Pre-loss condition had OE parts – not reconditioned, used or ‘LKQ’ parts.” When asked to identify the greatest culprit on the insurance side, another member had trouble narrowing down his list. “It’s not one company; it’s all companies,” he revealed. “We even have a couple that want us to explore the avenue of writing for and putting on used suspension parts. I know I wouldn’t do that to my own car. Why should I take a customer’s car and put in used knuckle and control arms? It’s ludicrous.” Although this member said that his shop will ultimately use OEM if the aftermarket version of the part simply doesn’t work, he is only able to reach this point after jumping through some considerable hoops. “We have to call [the insurer] back out so they can see it to prove to them that [an aftermarket] fender still isn’t fitting properly around the headlight area,” he says. “Of course, this delays the process, and the next call is from the rental company complaining about the time the vehicle is here.” Although all of the AASP/MA members we spoke to agreed with the CNN story in principal, some expressed concern in how some of the issues were portrayed. For example, one part of the report featured CNN Reporter Drew Griffin test-driving a vehicle said to have been repaired at a referral shop location. After noting that three of the vehicle’s wheel rims were still bent after the supposed repair, he took the rickety, clearly unsafe car for a spin. While the act made for riveting viewing, more than a few repairers are questioning exactly how three rims could be bent in a single collision. “There had to be more integrity in the reporting of that,” said one owner. “I suppose it’s possible that was all due to that accident, but it’s highly unlikely.” While repairers across America continue to mull over CNN’s coverage of some very controversial issues, everyone from insurers to politicians are putting in their two cents. In addition to being featured in the CNN broadcast, US Senator Richard Blumenthal (D-CT) sent a letter to Attorney General Eric Holder two days after the show aired,
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IN THE AREA urging the Department of Justice (DOJ) to investigate what the story uncovered. “Contrary to what consumers may be led to believe by their insurers, repair shops preferred by insurers do not necessarily equate with quality repairs,” Blumenthal wrote in the correspondence. “It seems to be common knowledge among auto repair shops that the best way to land a coveted spot on an insurer’s preferred list is not necessarily by delivering consistent, quality service, but by agreeing to charge below-market Labor Rates and use cheaper, salvaged, used or even counterfeit parts of questionable quality and safety.” The day after the Anderson Cooper report, the Certified Automotive Parts Association (CAPA) took the network to task for not acknowledging the presence of certified aftermarket parts in today’s industry. “The bad news: We all know that substandard parts exist in the market,” offered CAPA Executive Director Jack Gillis in a prepared statement. “The good news: CAPA’s independent, fully transparent, non-profit, rigorous quality certification program enables shops, insurers and part distributors to identify high quality, safe and good-fitting alternative parts. Because neither shops nor insurers can identify quality alternative parts by looking at them or depending on seller’s claims, CAPA provides the market with the ability to make an informed and quality-based choice. Shops and consumers want repairable vehicles without compromising quality, and CAPA provides that option. As to the broad brush disparagement of collision repair shops, clearly there are thousands of other American collision shops that do quality work and use CAPA quality parts - it’s just too bad that they weren’t part of the story.” Despite CAPA’s comments, reader feedback received by New England Automotive Report indicated that some shops in the area have encountered similar fit issues with CAPA-Certified parts as they do with non-certified aftermarket parts. Following the airing of the CNN piece, State Farm Spokesperson Dick Luedke said in a statement that the carrier was unhappy with the quality of Griffin’s coverage of the current 36-state suit launched by more than 500 body shops against a multiple of insurers across the US: We are disappointed that CNN did not choose to report what [the industry has] already reported, that all of the counts in the Multidistrict Litigation in Florida that are specific to the state of Florida have been dismissed twice, although the court has permitted the Florida plaintiffs a third chance to replead...We did make CNN aware of those rulings.
AASp/MA Shop FeATUred in ABC newS reporT on UnSAFe pArTS The issues discussed in Anderson Cooper 360°’s investigative report hit close to home on February 24, when Westfield-based shop owner and AASP/MA Secretary Gary Cloutier was featured in a special ABC 40/WGGB television report (“Auto Body Shop Speaks Out About Insurance Scheme”) that questioned the quality and safety of parts used in many of today’s collision repairs. As Cloutier told WGGB reporter Shakala Alvaranga, “We’re being forced to use inferior parts, which in turn is causing inferior repairs [and] putting our customers’ vehicles in a poorer condition.” To illustrate his concerns, the Cloot’s Auto Body owner offered pictures of a variety of aftermarkets parts that clearly did not fit. At another point in the segment, he went through an insurance estimate on camera, noting the high number of used and aftermarket parts listed. “When you take 10, 15, 18 parts collectively – basically the whole front of the vehicle – and try to put all that together, now you’ve got the front of the nose on a vehicle [where] nothing matches up right,” he said. Cloutier, who is one of the 500-plus body shops included in the multi-state suit detailed in the CNN broadcast, tells New England Automotive Report that he is encouraged by the number of recent mainstream news reports focusing on unsafe parts, steering and other critical issues. “People are really starting to take notice,” he says. “Any news and any light we can shed on the fact that the insurance companies are not doing the right thing by their customers is just good for our industry. It’s important for the public to know that they shouldn’t always believe what they’re told.” The ABC 40/WGGB story can be viewed at http://tinyurl.com/wggB-insurance-report.
With word of Anderson Cooper 360°’s exposé still making the rounds, something tells us that this tale is far from over. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
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NATIONAL NEWS by Joel Gausten
ConSUMer weBSiTeS deBATe F-150 repAir TiMeS, CoSTS After months of heavy promotion, the much-discussed aluminum-intensive 2015 F-150 is now on America’s roadways, allowing collision repairers and other automotive experts to get a real-world look into what it really means to fix these vehicles safely and professionally. In an attempt to see how repairing the F-150 measures up to steel vehicles, the automotive consumer website Edmunds.com recently put the truck to the test – with highly controversial results. In a two-part video/three-part story posted at www.edmunds.com on January 26, Edmunds Associate Editor Travis Langness struck the right quarter panel of a brand-new, $52,000 F-150 truck twice with an eight-pound sledgehammer. In addition to causing damage to the panel, the hits resulted in a crack in the right taillight lens that didn’t affect the actual light’s functionality. Edmunds brought the vehicle to an area dealership, Santa Monica Ford-Lincoln, to do the work. Langness received a quote for $2,082.73 and seven to 10 days to completely repair the panel, which the dealer predicted would take at least 20 hours. Additionally, the dealer quoted Langness $60 an hour for the work instead of the dealer’s usual $120/hour aluminum rate because he was paying out of pocket. According to Langness, the dealer’s service manager said the job would take “twice as long as steel.” Within hours of dropping off the F-150, Langness received word from the dealer that the truck’s taillight (which included a blind-spot sensor) was only sold as a complete unit. This brought the amount to replace the light from $106.28 for a standard light to $887.25 for the F-150 unit. When the repair was finally completed, the job took 24.4 hours and cost $2,938.44 (including body labor, parts, paint labor/supplies and sales tax). Twenty of those hours were for the actual aluminum body panel, while the remaining 4.4 hours were for removing the molding and other procedures. Based on these figures, Edmunds reached some intriguing conclusions: If we go with the theory that our service advisor presented...and assume fixing a steel panel would take half the time, it works out to just 14.4 hours of labor. [If you work that into the estimate], you’ll get a total of $2,338.44. That’s $600 less. Assuming that the Labor Rate for aluminum was the $120 an hour the service advisor told us, and going with our quoted time of 20 hours [for] 26 April 2015
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body labor to pound that panel out [plus the other work they did], we’re looking at $4,138.44. That’s a difference of $1,800, a price increase of nearly 77 percent, versus the cost of repairing a steel panel for 10 hours at $60 per hour...There’s plenty to speculate about when it comes to the new 2015 Ford F-150, and we’ve got a year to keep testing out our theories, but there are a few things we know for sure. One: It takes more time, unique tools and specialized training to fix aluminum body panels. Two: Those repairs, whether through higher Labor Rates or longer service times, cost more money than repairing steel. Unsurprisingly, not everyone agrees with Edmunds’ appraisal of the F-150. In a February 6 story, Consumer Reports Online took Edmunds to task for taking the damaged F-150 to a dealer that was not certified by Ford to repair the vehicle. “According to Ford, if Edmunds had taken the truck to a certified shop, the repairs might have been completed in half the time,” noted Consumer Reports Auto Test Director Jake Fisher. “A certified shop would need to maintain the proper equipment for aluminum repair, so they might have replaced the panel rather than just banging the dent out. Also, the aluminum body panels of the F-150 often cost about the same as steel ones, and Ford engineered the F150 aluminum panels to be easier to replace, which also cuts down on repair costs – all of which could have significantly reduced labor costs.” Scott Oldman, Edmunds.com’s editor in chief, offered the following response to Fisher’s concerns: As with any vehicle in Edmunds’ long-term testing fleet, our F-150 experiment was designed to simulate a service experience of any regular truck owner. Like many of these owners, we took our vehicle to the nearest Ford dealership for the repairs. The service advisor said that his facility could handle the repairs, and we trusted him to get the work done. While we were surprised to learn from the advisor that the repairs typically cost twice as much and typically take twice as long on the new aluminum-bodied truck as the steel-bodied truck, we were able to confirm those facts with a trusted local independent body shop. In the end, the work was performed within the time and the cost that was quoted to us, and we were satisfied with the quality of the repairs. As sales of the 2015 F-150 continue to escalate, Ford is working to inform consumers of the benefits of utilizing
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The Edmunds report can be viewed at: www.edmunds.com/ford/f-150/2015/long-term-road-test/2015-ford-f-150-aluminum-body-repairs-part-1-with-video.html. Consumer Reports Online’s response can be viewed at: www.consumerreports.org/cro/news/2015/02/the-real-cost-of-repairing-an-aluminum-bodied-2015-ford-f-150/index.htm.
certified/recognized repair facilities. According to Ford Truck Communications Manager Mike Levine, anyone who purchases an F-150 or any Ford vehicle is encouraged at the time of purchase to register at owner.ford.com to receive regular information about their vehicles. Additionally, the site offers a special search feature that allows customers to specifically look for F-150-certified/recognized shops in their area that can perform aluminum structural repairs. (To sample the search function without having to register, go to owner.ford.com, click on Parts & Accessories, select “Why Ford Collision Parts” and use the “Locate a Dealer” function to search by zip code. Then, use the Advanced Search Filters at the bottom to find area dealers and independents in the F-150 Aluminum Repair category.) Responding to the issues raised by the Edmunds report, Levine is adamant that the video and article do not reflect the everyday realities of repairing these vehicles. “The repair should have taken less than 10 hours, which is comparable with the time it would have taken to repair a steel vehicle with similar damage,” he says.
“One incident with one vehicle at a particular dealer in California is not representative of how things will be for all customers.” Additionally, Levine says that the insurance industry’s response to the aluminum-intensive F-150 has been calmer than some have suggested “When the truck was introduced, we said that [insurance rates] would be comparable to the previous truck and other full-size trucks in the segment,” he offers. “[For example,] State Farm’s make and model rate for the all-new F-150 is in line with that of the ‘14 F-150 – and that comes direct from State Farm.” Calls by New England Automotive Report to Santa Monica Ford-Lincoln for their side of the story were not returned at press time. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
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SPONSOR SPOTLIGHT
A hiSTory oF AASp/MA SUpporT
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lthough one of the worst winters ever seen in New England has finally died down, shops throughout the Commonwealth will surely be dealing with full bays of season-related accidents for months to come. With the need for prompt, professional parts service at an all-time high, the Bernardi Auto Group is ready to assist customers in completing repair orders as quickly as possible. One of the most recognized operations in the region, the Bernardi Auto Group offers a fine line of vehicles including Acura, Audi, Honda, Hyundai, Toyota, Scion and Volvo at seven locations in the Greater Boston/Metro West area. Boasting close to $4 million in quality wholesale collision and mechanical parts, the dealership family offers same- or next-day deliveries to an ever-growing list of parts customers. Current and new accounts are serviced through the efforts of road sales representatives Brandon Fitzpatrick and Rich Giordano, who generate daily reports for the Group on the customers they saw and what occurred during each visit. This offers Bernardi front line information to help serve their customers better. Thanks to this feedback, the Bernardi operation has been successful in addressing one of the auto body industry’s greatest concerns. With more and more shops feeling pressured to use aftermarket parts, Bernardi has worked hard to ensure that their customers always have options for OEM products. Thanks to the extensive use of CollisionLink, shops can use the best parts for the job no matter what. “[The rise of aftermarket parts] has made our job more challenging, and obviously the factories recognize that,” explains Fixed Operations Manager Alan LePage. “That’s primarily the reason why CollisionLink started; it was to give repair shops an option where they can continue to buy factory parts and we receive some financial assistance from the manufacturer to do that.” Of course, it takes a great deal of innovative thinking and a strong commitment to excellence to keep a business of Bernardi’s size moving forward. In LePage’s mind, the dealer’s ongoing success has been the result of a continued focus on improving efficiency. “One of the most critical things that has happened has been daily
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stock orders for our parts departments, which help us in reducing our cost of operation,” he says. “We can reduce the size of the inventory and the obvious costs of that inventory.” Three years ago, Bernardi’s in-house capabilities grew to new heights when they purchased an extensive warehouse in Natick to house their Honda, Audi, Volvo and Hyundai wholesale products under one roof. When not serving customers by day, Bernardi maintains relationships with repairers through ongoing membership and participation in AASP/MA. When you go to any major association gathering, there’s an excellent chance that Bernardi will be there in support. In LePage’s mind, there are multiple advantages to helping AASP/MA move forward. “I’ve always felt that you have to have a relationship with your customers, and not just on a business level,” he offers. “The association gives us an opportunity to meet with them in a different setting and get to know them a little more personally. We also get feedback from them through the association as to their expectations from us.” Thanks to their solid reputation and dedication to AASP/MA, the Bernardi Auto
Group will surely enjoy great success in 2015 and beyond. Of course, having so much snow in recent months certainly helps. As LePage says, “Based on the current orders coming in, and the feedback we’re getting from customers, there is an abundance of work out there right now. We anticipate some very good sales over the next few months.” For more information on the Bernardi Auto Group (including a complete list of locations), see their ad on page 28. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
Bernardi Fixed Operations Manager Alan LePage credits the operation’s success to its commitment to efficiency.
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TRAINING OPPORTUNITIES
i-CAr growS in MASSAChUSeTTS in Massachusetts
With spring finally here, it’s time to hit the classroom as I-CAR works to greatly expand its offerings in the Commonwealth! AASP/MA member and current I-CAR volunteer committee chairman Josh Fuller (Fuller Auto Body, Auburn) is hopeful that his peers in the association will take advantage of what these upcoming April classes (three of which will be hosted at his shop) will offer. “There are areas of opportunity in this industry that we as owners and leaders need to really embrace, and I think I-CAR is one of them,” he says. I-CAR’s Massachusetts offerings are determined by the classes necessary for individuals to maintain their Platinum status and for shops to maintain their Gold status. “The education structure and knowledge that I-CAR brings to the table is paramount for the future of our industry in the state,” he says. “If you’re not training on new technologies and materials that are out there and constantly changing, you’re essentially falling behind.” For more information on upcoming I-CAR events (or to learn more about the volunteer committee), please contact Fuller at jfuller@fullerautomotive.com.
April 1, 2015 Advanced Steering & Suspension Systems Damage Analysis Fuller Auto Body, Auburn, MA April 8, 2015 Plastic & Composite Repair Fuller Auto Body, Auburn, MA April 9, 2015 Hazardous Materials, Personal Safety & Refinish Safety Nickole Auto Body, Saugus, MA April 9, 2015 Aluminum Exterior Panel Repair & Replacement Assabet Valley Technical High School, Marlborough, MA April 15, 2015 Wheel Alignment & Diagnostic Angles Fuller Auto Body, Auburn, MA Visit www.i-car.com for more information.
MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
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INSIDE
MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
MEMBER BENEFITS by Jacquelyn Bauman
GettInG YOur name Out there: PROMOTIONAL PARTNERS, INC. everyone wants to see their name in lights, but as a business, what good does that actually do you? is it really better than having your name in the hands of your existing and potential customers? Through a new program with AASP/MA and Promotional Partners, Inc., association members can now receive massive discounts on promotional products in order to help spread recognition and increase their bottom line. Steve Elkinson, owner of Promotional Partners, Inc., has been a part of the promotional products industry for over three decades. In that time, he has owned and operated a variety of different businesses in the industry as a way to increase his knowledge of products available to his customers. “I’ve done everything you can do in this industry, from silk screening to embroidery,” Elkinson recalls. “Promotional Partners, Inc. is my third business in this field.” With so much experience in this field, it is of no surprise why the association sought to create a program with this company for its membership. “[AASP/MA President] Molly Brodeur and I met through BNI, an international business networking initiative through which business owners create contacts and work with one another,” Elkinson explains. “She thought that the services that my business offers could be of use to association members.” Through a number of negotiations and planning, AASP/MA and Promotional Partners, Inc. were able to create a power buying group for members as a way to provide deep discounts on promotional products for shops who cannot always afford to budget for them. “When larger companies want to buy products, they usually do so on such a scale that we can afford to give them deep discounts,” Elkinson explains. “If a company is buying $250,000 worth of promotional products a year, it is easy to give them these products for only 15 percent more than the manufacturer’s price, as opposed to the typical 4060 percent that other business would receive. Obviously, shops in Massachusetts aren’t going to be spending $250,000 a year alone on these kinds of things, but if you combine all of the over 200 shops in the association, the numbers are much closer, if not above that amount.” To join the power buying group, there is an annual fee of $360 for which shops can receive products for just 15
percent over the manufacturer’s price. (For example, an embroidered sweatshirt that would cost $35 apiece would come to just $21, saving members 40 percent overall.) Additionally, $300 of that fee goes to your first order of $2,000 or more, while the other $60 goes to fund association initiatives. Elkinson explains that this annual cost is not a fee to be a part of the group; it is simply a commitment on behalf of the member that they will participate. For those who don’t want to be a part of the power buying group, or who do not intend on spending $2,000 on promotional products (but who still want to receive a discount), there is a program in place to support their needs as well. “We didn’t want to exclude anyone,” Elkinson says. “And we didn’t want to penalize smaller shops just because they didn’t want to or didn’t have the means to join these power buying groups. For those shops that want a deal but do not want to participate in that particular way, I can offer them products at 20 percent above manufacturersupplier costs.” Not everyone understands the need for such products in their business, relying instead on the draw of advertising alone to bring in customers. “Advertising is like an experiment,” Elkinson states. “You’re not sure if it’s the newspaper, direct mail, radio or online where you see your best return. But with promotional products, you get to choose your real estate in your customer’s life. In addition to getting a free gift – which everyone loves – you get to decide where you want your name. Do you want to be in their kitchen on a mug? Or on their desk in a calendar? Or in their hands on a pen? It’s up to you.” Promotional Partners, Inc. works with non-commissioned account representatives who only have your best interest in mind. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
For more information on how to get involved, call Steve Elkinson at his office at (508) 229-2211, on his cell at (508) 942-5833 or email him at steve@promotional-partners.com. To browse their products, please visit promotional-partners.com. 34 April 2015
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New England Automotive Report
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ASSOCIATION UPDATE
by Joel Gausten
If you have read recent issues of New England Automotive Report, you know that AASP/MA has made a strong commitment to supporting Massachusetts vocational school programs. In addition to performing regular site visits of area schools to gain insight into each program’s strengths and needs, the association is currently “On the Move” and arranging for key association meetings to be held at vocational facilities throughout the state. The first gathering of this nature, a MidState Chapter meeting scheduled for April 14 at the Greater Lawrence Technical School in Andover, will feature encore presentations by Frank Collins of Energy Efficiency & Sustainability Consulting (EES; www.itseesy.com) and Emily Stout of Venly (www.venly.com), who both previously appeared at the January 13 presentation at the MidState Chapter Meeting in Westborough. (“MidState Meeting Explores Social Media, Energy Efficiency,” NEAR, February 2015). In addition to putting body shop owners directly in touch with school representatives, the meeting will also serve as a way for AASP/MA to continue its other major initiative for the year: Building a stronger membership. As a way to introduce more businesses to everything that AASP/MA has to offer, longtime vendor members Kwik Auto Body Supplies and Don Kennett, Inc. have graciously stepped up and offered enough financial support to allow the association to offer free admission to the April 14 meeting to non-members. Naturally, AASP/MA President Molly Brodeur was blown away by the high level of industry support displayed by both companies. “It says to me that they understand the value of belonging to our association, and that gets me excited,” she says. “They believe in what we have to offer membership - education, information, opportunity for involvement in industry issues and peer-to-peer interaction. The fact that they’re willing to be foot soldiers for us is really fantastic.” Brodeur is looking forward to hosting similar meetings at school across Massachusetts as the year carries on. “It’s brilliant because it accomplishes a lot of things,” she says of the arrangement. “It brings the vocational school into the mix and encourages engagement between instructors, students and shop owners. Bridging the gap 38 April 2015
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between the vocational tech collision programs and the industry at-large is paramount if we are going to ensure young technicians matriculate into the trade and ultimately create a lifelong career. We are hoping that utilizing the vocational schools as meeting locations will allow us to reach as many non-members as possible. They bring a lot of valuable information to the table, and we need to hear from them.” Gary Brown, general manager of Kwik Auto Body Supplies, is pleased to offer his collision repair customers a unique opportunity to touch base with the educators who are doing their part to train tomorrow’s technicians. “We can all get a lot of things accomplished with these localized meetings for a very small cost,” he says. “The kids who get into this workforce have a nice, long career path in this industry. We need to get the message out that it does exist.” In Brown’s mind, the ultimate goal of these meetings is more than just soliciting new faces; it’s also about getting existing members to step up to the plate and increase their participation. “A good portion of our top customers already have membership in AASP/MA, but there are so many customers who are still not involved,” he reveals. “Also, some members might pay the fee, but might not have much involvement on a local level. We’re looking to see the current AASP/MA members start to take greater advantage of these monthly meetings. An informed collision center base is very important for us in our negotiations and dealings with insurance companies and everything else.” As Don Kennett Vice President Bob Levy sees it, the April 14 meeting will benefit the industry by providing expert presentations on areas that help shops improve their bottom lines. “If you bring something to the table that is of value to [shop owners], they will show up,” he says. Looking ahead, Levy is hopeful that AASP/MA’s meetings will encourage auto body instructors to better continued on pg. 50
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VOCATIONAL SCHOOL SPOTLIGHT by Joel Gausten
MonTAChUSeTT regionAl voCATionAl TeChniCAl SChool This writer has been to dozens of educational facilities over the years, but visiting the technologically advanced Montachusett Regional Vocational Technical School (“Monty Tech”) in Fitchburg was an unforgettable experience. After signing in as a guest (a process that included getting a photo taken and scanning my driver’s license), I walked through the door of the school’s body shop and was immediately transported into the future of automotive repair education. Boasting some of the most innovative technologies available to collision repair students, Monty Tech’s spacious (and virtually spotless) facility includes a body repair area, a metal shaping area, a detailing bay, a paint booth that utilizes PPG waterborne paint, a frame area for welding and a separate classroom. The department’s specialized equipment includes a Chief frame machine, a Chief Velocity laser measuring system, a CCC Pathways estimating system and an i4 resistance spot welder. Serving freshmen through seniors, the program utilizes the Education Edition of I-CAR’s Professional Development Program (PDP) to provide students with an opportunity to reach ProLevel 1 status in the PDP’s Refinish Technician and Non-Structural Technician roles and leave school with I-CAR Platinum recognition. In addition to following the I-CAR curriculum, Monty Tech instructors David Lelievre, Peter Gallant and Mike Forhan work to add a spirit of fun to their teachings. Last year, a pedal car created by Monty Tech students (pictured, top right) took the top spot at the World of Wheels. Additionally, students can develop their talents by crafting and painting custom metal mailboxes and taking on a variety of other projects. “It covers a lot of performance competencies that the kids need to learn before the kids continued on pg. 50 42 April 2015
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This pedal car, created by Monty Tech students, took home the top prize at last year’s World of Wheels show.
Monty Tech student Kyle Welsh
Monty Tech student Meghan Maloney
President Molly Brodeur visits with Montachusett Tech instructors (left to right) David Lelievre, Peter Gallant and Mike Forhan.
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LEGAL PERSPECTIVE
the DePartment Of JustICe autO Parts shutDOWn by James A. Castleman, Esq. Collision repair shops are not the only businesses that have to be concerned with antitrust laws. As it turns out, Japanese auto parts manufacturers appear to be a much bigger target, with much more to lose and a much greater ability to pay. Over the past several years, the United States Department of Justice (DOJ) has been conducting the single largest antitrust investigation and prosecution in its history, with various Japanese parts manufacturers as the primary object of their attack. To date, these manufacturers have paid more than $2.4 billion in fines and several of their executives have gone to jail. Additionally, private civil lawyers have now picked up on the DOJ prosecutions and have started suing these parts manufacturers on behalf of vehicle manufacturers, car dealers and consumers. These private civil lawyers are seeking and obtaining millions of dollars in damages on behalf of their clients, based on claims of paying significantly more for cars and car parts than they should have. Theoretically, the result of all of this should be that the price of auto parts (as well as the price of the vehicles in which they are being installed) is going down. I have yet to see this happen, and I am not sure if you in the collision repair industry have yet to see it either. hIstOrY Of the InVestIGatIOn The first target of the DOJ investigation was a manufacturer of wire harnesses. That led to investigations of three manufacturers that supplied Toyota parts. The information discovered in those matters led, in turn, to dozens of investigations of companies that supplied parts to Toyota, Nissan, Suzuki, Subaru, Isuzu, Honda, Mazda, Mitsubishi, Chrysler, Ford and General Motors. (Perhaps European car manufacturers had avoided the problem - or perhaps the investigations just have not gotten there yet.) The range of parts involved has become enormous: steering wheels, seat belts, ignition coils, windshield wipers, windshield washer components, automatic transmission fluid heaters, starter motors, alternators, fuel injection systems, power window motors, compressors, condensers, HVAC 44 April 2015
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units and their components, heater cores, hoses, electronic control units, heater control panels, steering columns, bearings, HID lamp ballasts, etc. The investigations eventually also went beyond Japanese manufacturers to companies in other countries and to manufacturers of aftermarket parts as well. The incredibly wide expansion of the investigations was not coincidental. The DOJ has an “amnesty� program in which it rewards defendants with leniency if they self-report their involvement in other conspiracies and name their co-conspirators. The defendants in the relatively minor wire harness investigation proved to be an excellent source of information regarding much wider conspiracies involving larger companies and many more parts. The defendants in those additional matters then provided information regarding even more conspiracies and more parts. Many of the DOJ investigations and prosecutions led to negotiated corporate plea deals involving significant criminal and civil fines, as well as individual plea deals involving jail time - something rarely invoked in antitrust matters and never previously seen to such an extent. One of the biggest monetary settlements was with the Bridgestone Corporation, entailing price fixing of rubber anti-vibration parts. In a plea deal, Bridgestone agreed to pay $425 million in criminal fines for conspiring to fix prices, rig bids and allocate market sales. About two dozen individuals, including company vice presidents and US sales managers, admitted their involvement in criminal antitrust conspiracies and have gone to jail. Notably, many of the individuals who agreed to jail time not only participated in the antitrust conspiracies, but also engaged in activities that obstructed the DOJ investigation, including massive shredding of documents and wholesale deletion of emails. The scope and depth of the DOJ investigation has been larger than any other in its history, but the prosecutions are unusual in other respects as well. First, it is extremely rare that the DOJ has been able to prosecute foreign nationals in the past. While some of the individual defendants are US
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citizens, many are not. Plus, all of these individuals agreed to recognize the jurisdiction of US courts and serve time in US penitentiaries, including some individuals who were working and living solely in Japan and engaging in conduct that only took place in that country. The DOJ investigated because the parts were used in vehicles being manufactured in US plants and being sold through US dealers to US consumers, yet many of the individual conspirators had never engaged in any illegal activity on US soil. The overall investigation led to unprecedented cooperation between US authorities and similar regulatory agencies in other countries throughout the world, including agencies in Japan, Canada, Australia, Brazil, Korea, the United Kingdom and the European Union. Not only did these agencies provide important information to the DOJ, but they began investigations of their own. Many have now prosecuted actions in their own countries. Within more recent years, and as the result of the DOJ criminal convictions, civil class action lawsuits on behalf of manufacturers, car dealers and consumers have sprung up. There have already been several multi-million dollar civil settlements of these suits. Indeed, it is difficult for a company to deny civil liability, which requires proof by a “preponderance of the evidence,” when they have already agreed to criminal liability (which presumes the stricter standard of proof “beyond a reasonable doubt.") The only real issue left is the amount of resulting damages. What DID theY DO? The scope of illegal activities engaged in by the parts manufacturers is mind-boggling. Not only did they engage in conduct that is recognized as illegal in the United States and most other industrialized countries, but they did so fairly openly. Meetings between major players were regularly scheduled and widely publicized among them, and voluminous emails charting their conduct (although often coded) were routinely exchanged. Principally, the parts manufacturers agreed to allocate markets, rig bids and fix prices. In particular, they would agree that one manufacturer would get to be the supplier of a particular part for a particular carmaker, and would be doing so at an agreed-upon price. As an example, if Toyota were soliciting bids for a particular part, the conspirators would agree that one of them would bid for that job at a given agreed price point, while the others would agree to submit higher, non-competitive bids. Another conspirator might be the agreed upon supplier of the same part for Honda, perhaps at a slightly different price point, but with the other conspirators again submitting non-competitive, higher bids. Often, the agreement was for parts used in a particular line within a carmaker (i.e., one parts manufacturer would be the supplier for a particular part for the Toyota Camry, while another would be the supplier of the
same part for the Toyota RAV4.) Sometimes, carmakers would ask for price concessions if they thought that quoted prices were too high, but the conspirators agreed that any concessions would be limited to a particular range. Small companies do not manufacture parts for major carmakers. As a result, only a limited number of companies can afford the manufacturing infrastructure needed to generate the vast numbers of parts demanded by the carmakers. Of course, all of those companies want to make sure that they can operate at a profit. What better way to do so than to agree with the limited number of competitors in the marketplace as to who will supply what parts to which carmakers, and at what price? If it works and goes undiscovered, each of the parts manufacturers does quite well. But ultimately, the carmakers, dealers and car buyers suffer by paying higher prices all along the manufacturing, supply and sales chain. Another key element of the conduct of the conspirators in these matters has been the significant effort to cover their tracks once they found out that they were being investigated. While it may not be uncommon for subjects of DOJ criminal investigations to want to hide evidence of their actions, the players in these cases went over the top. Massive amounts of documents and emails were destroyed by the targets of the investigations. Although obstruction of justice charges are rarely prosecuted in criminal antitrust matters, as a result of the blatant destruction of huge amounts of evidence in these matters, the DOJ has vigorously prosecuted the active participants in these cases. It is these individuals who have faced the stiffest jail sentences, and the DOJ has let it be known that it will continue to seek imprisonment for people engaged in destroying evidence. whAT proMpTed The inveSTigATion? Although there is no particular statement by the DOJ as to why they began investigating parts manufacturers, it must be recognized that carmakers and dealers represent a large and influential sector of business in the United States. They are the businesses that can afford to pay for multiple minutes of ads during the Super Bowl. While I have no direct evidence of the carmakers lobbying the DOJ to investigate, it is not a long leap to suppose that the auto industry may have had an effect on the DOJ’s actions. On the other hand, perhaps things just did not seem right to some investigators within the DOJ, or perhaps some disgruntled employee of a parts manufacturer made a complaint. Whatever the initial incentive for the investigation, it is clear that the DOJ’s amnesty program was the cause of its widespread expansion. ConClUSion It should be recognized that the DOJ’s investigations and prosecutions of auto parts manufacturers have not continued on pg. 54 New England Automotive Report
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2015 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.
*** PLEASE TYPE OR PRINT LEGIBLY *** BUSINESS INFORMATION: Mr.
What benefits motivated you to join AASP of Massachusetts?
Mrs.
Ms.
Business Representative Name:
________________________________________________________
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PERSONAL INFORMATION:
Street Address ________________________________________________________________________________________________________ Street
City
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Mailing Address ______________________________________________________________________________________________________ Street
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City
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Enrolled By (Name and Address) ________________________________________________________________________________________ MEMBERSHIP TYPE
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REPAIRER MEMBER (check one) Collision Repair Shop Mechanical Repair Shop Both, Collision & Mechanical Repair Shops Other Repair Shop
Nickname ________________________________________________ ANNUAL MEMBERSHIP DUES (The AASP membership year is from January to January 2016)
Total Due ....................................................................................$395.00 SUPPLIER/ASSOCIATE MEMBER (check one) Auto Paint/Crash Parts/Auto Parts/Wholesaler Equipment/Tool Supplier Manufacturer/Sales Agent Services (Computers, Software, Vehicle Rental, Other)
NEW! Political Action Committee (PAC) Donation ...............$_____
Check or Cash Credit Card:
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LIST OTHER SPECIALTIES ____________________________________ ________________________________________________________ Just like good tools and equipment, membership in AASP of Massachusetts is a valuable investment. AASP of Massachusetts works for you through such outstanding programs as: (1) management and technical training; (2) discount uniform rental; and (3) a wide variety of other business services. Put AASP of Massachusetts to work for you today. COMPLETE THE MEMBERSHIP APPLICATION AND RETURN IT WITH PAYMENT TO AASP OF MASSACHUSETTS.
Card Number: __________________________________________ Expiration Date: ________________________________________ Signature: ______________________________________________ Date: __________________________________________________
For oFFiCe USe only Check number ______________________________Check date ________________________Check Amount ______________________________ date Joined ______________________________Member number ______________________next Bill date ______________________________
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. 48 April 2015
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voCATionAl SChool SpoTlighT continued from pg. 42 move on to repairing cars,” says Lelievre of the mailbox project. “First of all, they’re doing a lot of measuring. We also do a lot of metal shaping, and they get to use the squeeze-type resistance spot welder to weld the bottom [of the box]. Then there’s the paintwork.”
“Some of these small projects give these kids the fundamentals they will apply when they start working on a customer’s vehicle,” adds Forhan. “They’re using metal repair and welding and getting familiar with plastic, putty and other things. Now when we put them on a bigger job,
they understand how to set up a weld and how fast plastic is going to dry before they start putting it on the vehicle.” When not wowed by the great work happening on the floor, visitors will notice that nearly half of the program’s students are female. “We’re trying to get [female students] more involved,” Gallant says “Any kid can do any work out there if he or she applies themselves. We feel strongly that it really doesn’t have to be just a ‘man’s’ trade.” Not surprisingly, AASP/MA President Molly Brodeur greatly enjoyed experiencing Monty Tech for herself. “The Auto Body/Collision Repair program at Monty Tech is truly impressive and inspiring,” she says. “At a time when shops’ expectations for new techs is at an all-time high, this school is taking the initiative to embrace the I-CAR curriculum to give students a more streamlined skill set that will be of genuine value to employers. The high quality of the program’s equipment and the instructors’ willingness to add an element of fun to the students’ activities only add to what this facility has to offer.” MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
ASSoCiATion UpdATe continued from pg. 38 engage with the industry that will someday employ their students. “All these teachers are concerned and care about these kids,” he offers. “If you bring them all together and try to teach them the same things and figure out where we’re going, it’s only going to help the students.” Bolstered by the early success of the “On the Move” initiative, AASP/MA encourages members both new and old to make a serious effort to build stronger relationships with the vocational instructors in their communities. As Brodeur says, “The youth are our future. If we don’t start making some drastic improvements in our attraction and retention of these young technicians, our industry will suffer greatly as technicians continue to age out of the trade.” 50 April 2015
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MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
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BOSTON VOLVO VILLAGE Parts Direct: 800-336-2355 Fax: 617-560-1742
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AUDI NORWELL Parts Direct: 888-744-8810 Fax: 781-878-1063
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NISSAN VILLAGE Parts Direct: 888-309-0980 Fax: 508-699-2396
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VOLVO VILLAGE OF HINGHAM Parts Direct: 781-829-3120 Fax: 781-829-3193 parts@volvohingham.com
VOLVO VILLAGE OF DANVERS Parts Direct: 978-741-3474 Parts Fax: 978-624-4455
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• Accurate, professional wholesale staff • Fast Delivery to Your Door • Competitive Discounts • Large Inventory - Over $4 million in mechanical and collision parts • Collision Link
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VILLAGE WHOLESALE HOTLINE: 1-855-VAG-PART Visit us on the web: www.villageautomotive.com 1-855-824-7278 New England Automotive Report
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LEGAL PERSPECTIVE continued from pg. 45 N
ended. Even though the investigation is currently the largest antitrust investigation in the history of the DOJ, it may still get much larger. The private civil class action suits have really just begun. What will be the end result of all of this? Will parts manufacturers really change their ways? Perhaps most importantly for the rest of us, will the investigation actually lead to lower
prices for auto parts and the cars that we buy tomorrow?
E
W
E
N
G
L
A
N
D
AUT M TIVE
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.
AD INDEX Audi Group ....................................................17 Axalta Coating Systems ..................................4 Bald Hill Chrysler Jeep Dodge Ram............11 Balise Wholesale Parts Express ....................16 Baystate Chrysler/Jeep/Dodge ..................33 Bernardi Group ........................................28-29 Best Chevrolet/Best CDJR..........................IFC BMW Group ..............................................36-37 BMW/Mini of Warwick ................................40 Clay Subaru ....................................................27 Colonial Auto Group ......................................6 Empire Auto Parts..........................................10 Enterprise ........................................................31 First Chrysler-Dodge-Jeep-Ram ..................11 First Ford ........................................................11 First Hyundai..................................................11 Ford Group ....................................................53 Future Cure ....................................................50 Honda Group..................................................22 Hyundai Group ..............................................39 Imperial Ford ..................................................56 Infiniti of Norwood........................................32 Ira Group....................................................12-13 Kelly Automotive Group............................IBC Linder’s, Inc. ..................................................54 Long Automotive Group ..........................OBC Mazda Group..................................................43 Mopar Group....................................................8 Nissan Group..................................................49 PPG ....................................................................3 Robertsons GMC Truck ..................................9 Sarat Ford-Lincoln ........................................20 Sentry Group ..................................................41 Subaru Group............................................46-47 Tasca Group ....................................................21 Toyota Group..................................................35 Village Auto Group........................................51 VW Group ......................................................52 Wellesley Toyota/Scion ..................................9
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