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4 August 2022
New England Automotive Report
August 2022 • Volume 20, No. 8
DEPARTMENTS PRESIDENT'S MESSAGE 6 | Stand Up, Stand Together by Kevin Gallerani
CONTENTS NATIONAL FEATURE
EXECUTIVE DIRECTOR’S MESSAGE 8 | Egregious by Evangelos “Lucky” Papageorg LOCAL NEWS 14 | AASP/MA Returns to the Green in September by Alana Quartuccio Bonillo
VENDOR AFFINITY PROGRAM SPOTLIGHT 18 | Kwik Auto Body Supplies
20 | What Makes a Good Parts Supplier?
by Chasidy Rae Sisk
COVER STORY
by Alana Quartuccio Bonillo
LEGAL PERSPECTIVE 34 | What the Heck is Estoppel? by James A Castleman, Esq.
ALSO THIS ISSUE 7 | AASP/MA MEMBER APPLICATION 15 | AASP/MA GOLF OUTING SAVE THE DATE 19 | AASP/MA VENDOR AFFINITY PROGRAM SPONSORS
28 | Backlog Forces Shops to Strengthen Core Principles by Chasidy Rae Sisk
New England Automotive Report
August 2022 5
PRESIDENT’S MESSAGE
Stand Up, Stand Together KEVIN GALLERANI
By the time this magazine reaches your hands, the most recent legislative session will have ended, determining the fate of House Bill 4868 (formerly HB 1111/Senate Bill 709), which recently received an “ought to pass” recommendation from the House Committee on Steering, Policy and Scheduling. Although I don’t yet know whether we’ll win or lose, I know one thing for certain – it’s time that shops across the Commonwealth stand up for themselves! As shop owners and managers, we need to push back on the insurance carriers that still believe a $40 labor reimbursement rate is sufficient for us to run our businesses. We need to tell them that we won’t accept such a pittance…and we need to let them know that we won’t be pacified by a $5 increase that barely makes a dent in correcting the deficient amount we’ve been receiving for decades. But if you don’t ask, you absolutely won’t receive what you need. There’s plenty of work out there, so there’s no reason to deal with insurers who won’t work with us. We stopped accepting work from certain carriers, but so did other shops in the area. We hate inconveniencing our customers, but it’s time we send a message: We, the auto body professionals of Massachusetts, will not continue to kneel before the almighty insurer and do their bidding. We will stand up for our customers, our shops, our livelihoods and our industry. It’s difficult and a little scary to decide that you won’t accept certain carriers, but if we just keep taking it – and complaining, instead of doing something about it – nothing will ever change. That’s where AASP/MA comes in. Our association offers
STAFF
AASP/MA EXECUTIVE COMMITTEE
PUBLISHER
President Kevin Gallerani
Thomas Greco | thomas@grecopublishing.com
SALES DIRECTOR Alicia Figurelli | alicia@grecopublishing.com
EDITORIAL/CREATIVE COORDINATOR Alana Quartuccio Bonillo | alana@grecopublishing.com
OFFICE MANAGER Donna Greco | donna@grecopublishing.com
PRODUCTION COORDINATOR Joe Greco | joe@grecopublishing.com
MANAGING EDITOR Chasidy Rae Sisk | chasidy@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
PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
AASP/MA PRESIDENT KEVIN GALLERANI is president of Cape Auto Collision Center in Plymouth, MA. He can be reached at (508) 747-0316 or kevin@capeautobody.com.
Vice President Matthew Ciaschini
Treasurer Dana Snowdale
Secretary Gary Cloutier
AASP/MA STATEWIDE DIRECTORS Director At-Large Adam Ioakim
AASP/MA DIRECTORS
Legislative Director At-Large Tom Ricci
ZONE 1 Mike Penacho Dan Wenzel John Studer
ZONE 2 Ray Belsito Joshua Fuller Brenda Lacaire
Affiliate Director Rick Fleming
Affiliate Director Bill Spellane
ZONE 3 Andrew Potter Brian Stone
AASP/MA ADMINISTRATIVE OFFICE AASP/MA Executive Director Evangelos “Lucky” Papageorg
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 © 2022 by Thomas Greco Publishing, Inc. Images courtesy of www.istockphoto.com
6 August 2022
a community for repairers. We host training classes, but we also offer the opportunity for collision repairers to gather and network with one another. Our gatherings are a chance for the shops to share their concerns, receive coaching and explore various options that have worked for our peers. We’re working hard to support the industry, but to be able to do that as effectively as possible, we need shops in the Commonwealth to come out and support us too. AASP/MA’s 2022 Golf Tournament is coming up on September 14 and will be held at the Heritage Country Club in Charlton. Each year, we have a bunch of awesome prizes and an even better steak dinner, but my favorite part is meeting with other shop owners and their teams from all over the state. Our conversations always reinforce the realization that we’re all dealing with the same issues; you’re not alone, and that’s powerful knowledge to possess. Mark your calendar, schedule the day off, and plan to come support the association at our annual fundraiser, which helps us to get things done. The fruits of AASP/MA’s labors have been evident, especially in this past year, so if you’re as eager to see change as I am, I hope I’ll see you next month when we get together for a fun day on the golf course before we gear up to continue this battle to protect our futures.
New England Automotive Report
AASP/MA Administrative Assistant Alana Bonillo
WWW.AASPMA.ORG
Collision Director At-Large Rob DelGallo ZONE 4 Kevin Kyes Jim Marshall Paul Tuscano Affiliate Directors Frank Patterson Jeff White Don Dowling P. O. Box 850210 Braintree, MA 02185 617-574-0741
Membership Application 2022-2023
AASP-MA P.O. BOX 850210 Braintree, MA 02185 Phone: 617-574-0741 Fax: 973-235-1963 Email: admin@aaspma.org
Please complete this form and return to our office via mail, email or fax with your dues payment. Thank You! BUSINESS INFORMATION Massachusetts Shop Registration # __________________
Total number of Staff (Techs, office, Mgrs)________
Company’s Official Name: ________________________________________________________________________________________________ Business Physical Address: _______________________________________________________________________________________________ Business Mailing Address (If Different): ________________________________________________________________________________ Telephone Number: (______)-________-___________ Fax: (______)-________-___________ DUES STRUCTURE. Collision Shop Annual Dues: $650 / 12 Months* PRIMARY BUSINESS CONTACT Name: _______________________________________________________________________________________________________________ Email: _______________________________________________________________________________________________________________
YES � Please list my business as an AASP/MA member in good standing on the AASP/MA website for consumers to consider using for the collision repairs and assistance with the claims process. I understand this is a member benefit (_________ initials Date ___/____/2022) Yes � Please send me information regarding the following MONEY SAVING BENEFITS: � Dental plan � Healthcare plan � Credit card processing � Grant writing/training � Google presence optimization � All five PLEASE ENCLOSE PAYMENT WITH YOUR MEMBERSHIP APPLICATION Check# : _______________ (IF collision shop please note your RS# on the memo line of the check) CC #: ______________________________________________________________________
OR
EXP: ________/___________ CID: _________________
Billing Address: ______________________________________________________________________________________________________________ Name On Card: _____________________________________________ Signature: ____________________________________________________ Note: A 4 percent convenience fee will be charged for membership renewal via credit card transaction
I hereby make this application for membership with the Alliance of Automotive Service Providers of MA (AASP/MA) for membership dues 2022-2023 as provided for in this contract. *Membership Dues are for a twelve-month period commencing on your anniversary month of membership.
REV 7/22 New England Automotive Report
August 2022 7
EXECUTIVE DIRECTOR’S MESSAGE
Egregious EVANGELOS “LUCKY” PAPAGEORG
According to the Merriam-Webster dictionary, the definition of the word egregious is “especially and conspicuously bad.” Among the synonyms listed for egregious are “blatant, flagrant, glaring, obvious and striking,” all of which have a negative feel to them. Because of the negative connotations associated with the word, I was particularly concerned when I heard it used in conjunction with our legislative bill which would set a minimum labor reimbursement rate. It is particularly disturbing because, if anything is truly egregious, it is the lack of fairness and reasonability insurers and our legislators have displayed when called upon to address the issue. There are countless examples of what is truly egregious about the artificially set and suppressed labor reimbursement rate paid to the ill-informed and misguided insureds of Massachusetts. The fact that insurers can pawn themselves off as the experts in the repair process is insulting and egregious. Insurers pretend to be the “good hands people” who are “on your side” trying to “save you 15 percent” by letting the policyholder customize their coverage only to hear down the road, “We don’t pay for that” because you didn’t select that coverage. (At least the insured saved 15 percent, but at what expense?) Insurers got into business to make money by making certain promises to their policyholders, and they should be held accountable to keep those promises. The lack of accountability is indeed egregious. Intimidating and threatening hard-working collision repairers that will be put out of business due to insurers steering illinformed and misguided policyholders to the shops who are either playing ball or have had to succumb to the pressure if they want to “survive” and get onto referral, or worse yet, sign onto program contracts, is egregious. Referral and program contracts, which at first seemed like they were a benefit but have been progressively more of an anchor and a weapon to keep the collision industry repair industry pitted against itself, are egregious. Insurers who turn a blind eye to all but their bottom line at the peril of their policyholders are indeed egregious. High on the list of egregious acts is the current attempt to pacify the collision repair industry once again with paltry increases of $1, $3, $5 or in the case of one national insurer, an increase of $10 dollars per hour. To each of these increases, we say, “Thank you” and “Welcome to: late 1996, June 1999, the first quarter of 2000 and the middle of 2003 respectfully.” Thankfully, a growing number of shops are not falling for this worn-out ploy. “Thank you, insurance industry,” but you are still at a minimum $24 and nearly 20 years behind what would be considered a fair and equitable rate had you just kept pace with inflation. Some might say the requested increase is egregious;
8 August 2022
New England Automotive Report
however, when you weigh it against an actual 152.5 percent increase in inflation, 261 percent increase in insurance premiums, a 270 percent increase in minimum wage versus a labor reimbursement rate increase of only 33 percent over the same period, the requested increase amount is more than fair and equitable. The fact that the minority in the collision repair industry, who have given up trying to make a change or maybe never even tried at all, have been used to a set “prevailing” rate is egregious. The fact that the word “prevailing” is even allowed to be used, when the word “dictated” is much truer to the fact, is egregious. Alleging the proof is in the fact that properly trained, staffed and equipped collision repair shops would “willingly” accept $40/ hour for their expertise and the liability they take on is absurd and egregious. It is intimidation and fear of losing one’s business that has driven the “willingness” of collision repairers. The good news is that the same fear is driving more and more shop owners to take the time to explain the issue of a suppressed labor reimbursement rate to their customers. They are no longer as fearful of losing a customer because they have chosen to charge a rate which will not only allow them to survive but also take the additional steps towards thriving. Shops are finding that they can create an “alliance” with their customers. Although some customers are purely price driven and would rather believe insurers’ egregious misstatements, more shops are finding that safe and proper repairs are the key focus of their customers. As an example, a shop that has taken the time to explain to a potential customer that only 11 shops out of 252 registered shops in the Worcester area consider the insurance company (instead of the
If anything is truly egregious, it is the lack of fairness and reasonability insurers and our legislators have displayed when called upon to address the industry's issues. continued on pg. 12
New England Automotive Report
August 2022 9
10 August 2022
New England Automotive Report
New England Automotive Report
August 2022 11
EXECUTIVE DIRECTOR’S MESSAGE continued from pg. 8 vehicle owner) to be their customer has found that not only do they retain the customer, but the customer is willing to accept the shop’s posted labor co-pay figure and will purse the insurer for reimbursement. Conversations and discussions such as the one above are turning against the egregious acts of the insurance industry and are being accomplished daily, shop by shop. Soon, it will be the minority of shops that will be hearing “You’re the only one.” “You’re the only one” who cannot afford to properly pay and retain skilled, well-trained technicians. “You’re the only one” who does not have the proper, well maintained and up-to-date equipment to work on today’s vehicles. “You’re the only one” who doesn’t seem to understand that I am your customer. “You’re the only one” who doesn’t understand that I am concerned with my safety and the safety of my family rather than the price. Sure, you will not land every job where you discuss the need for a co-pay, but do you really want that person for a customer? More and more shops are perfecting the process of turning the insurance industries’ egregious propaganda back against them. These same shops are also able to entice skilled technicians to their shops because of what they can offer in the form of better wages, benefits and work environment. These same shops are still booked
12 August 2022
New England Automotive Report
weeks in advance. Some shops are reporting receiving calls from inside adjusters who are confused as to why they are being sent bills from their insureds asking for reimbursement for procedural and labor reimbursement differences not paid for by the appraisers. The adjusters are asking the shops what they should do with the bill. “Pay the person” seems to be the most appropriate response! More and more shops are reporting that their customers are getting reimbursed by the insurer. If YOU don’t ask, you will never know what you can get. As this issue of New England Automotive Report goes to print, we do not know what the final outcome of our efforts will be regarding HB 4868, An act to establish minimum reimbursement rate to insurance claimants, but what we do know is that we, as an industry, have the ability to control our future, with or without passage of the bill. Not believing that you have control would truly be egregious! PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
AASP/MA EXECUTIVE DIRECTOR EVANGELOS “LUCKY” PAPAGEORG can be reached at (617) 574-0741 or lucky@aaspma.org.
New England Automotive Report
August 2022 13
[LOCAL] NEWS
by Alana Quartuccio Bonillo
AASP/MA Returns to the Green in September AASP/MA surely set the course for a productive 2022. With a strong legislative push for labor rate reimbursement reform and efforts to right the wrongs of the ADALB progressing further than ever before, it’s been quite a successful year thus far. Now, the association and its supporters are getting ready for the next course on deck – the golf course! Every September, AASP/MA gathers the automotive community on the green for a fun day of camaraderie, networking and friendly competition! And this year is no different. After their very successful 2021 event at the Heritage Country Club, AASP/ MA decided to host their annual fundraising event at the same location this year, and shop owners, vendors and other automotive supporters from all over the state are polishing off their clubs and getting ready to head to Charlton on September 14. The annual event is a chance for shop owners to take a break from the hectic day-to-day and enjoy some time with colleagues in a leisurely game of golf. The annual outing also serves as AASP/MA’s main fundraiser with proceeds supporting their work year round – especially in regard to fighting for change at the State level where the push is needed most. Golfers can expect the same level of competition, exciting contests and a mouth-watering steak dinner that last year’s event had to offer. The ball drop will once again kick off this year’s tournament. Last year, a sea of golfers stood wide-eyed as a crane hoisted AASP/ MA Executive Director Lucky Papageorg into the air, so he could drop individually numbered balls onto the green – the one which measured closest to the pin claimed $500 for its owner! This year, the stakes may be even higher! Come to the event, purchase one ball for $20 or three balls for $40, and cross your fingers that one of your balls will be the winner!
14 August 2022
New England Automotive Report
In addition to cash prizes, golfers will have a shot at winning various items, such as bluetooth speakers, coolers, sports event tickets and thensome, through the multiple hole-in-one contests set up on the course, allowing golfers to truly put their skills to the test. Don’t golf? No problem! Non-golfers can still take part in the fun by coming by to assist throughout the day and join colleagues for dinner following the tournament – the meal is something the entire crew at the shop can take part in once the tournament is finished on the course - a great way to thank your crew for a job well done. AASP/MA would not be able to make this event such a success without its generous sponsors. Last year, every hole and hole-in-one sponsor received an exclusive commemorative flag featuring their company logo. Commemorative flags exclusive to this year’s event will be offered, so don’t wait too long to sponsor a hole or a hole-inone contest! Check in will begin promptly at 7:30am, and the festivities will kick off with the ball drop taking place at 10am, followed by the Shotgun Start. Then golfers will take to their carts and hit the green until it is time to head back with their completed score cards to enjoy grilled steak and refreshments. And thanks to the various items donated by generous participants and vendors, along with this year’s raffle prizes and the 50/50, just about no one will go home empty handed! Register as an individual player ($175) or a foursome ($700) via aasp-golf-tournament.perfectgolfevent.com/registration. Multiple sponsorship opportunities are also available. Visit aasp-golf-tournament.perfectgolfevent.com to secure your sponsorship before they all sell out. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
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AASP/MA
GOLF TOURNAMENT
2022
Wednesday, September 14 at Heritage Country Club in Charlton REGISTER HERE: aasp-golf-tournament.perfectgolfevent.com
16 August 2022
New England Automotive Report
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New England Automotive Report
August 2022 17
[VENDOR AFFINITY PROGAM] MEMBER SPOTLIGHT by Alana Quartuccio Bonillo
Kwik Auto Body Supplies Body shops who rely on Kwik Auto Body Supplies do so because they know they will get a lot more value for the price of paint and supplies. Run by second generation owner Gary Brown, the family-owned and operated business has been serving shops throughout Massachusetts for over 60 years and counting. Gary’s father, Les Brown, was one of the three founding partners who started Kwik Auto Body Supplies in 1960. Gary fondly remembers working in the warehouse as a kid. Although he grew up around the operation, he didn’t envision a career at his father’s business. But life had other plans. After obtaining a finance degree in college, he worked in the stock market for Paine Webber for a few years. His financial background was soon needed at his father’s operation. The partners had decided to sell, but the deal never got off the ground. One thing led to another, and soon, the younger Brown found himself purchasing the business and taking it over. “I came in by default, but I have no regrets,” Gary admitted of the way things worked out. “Once I bought the business, I
knew I was doing the right thing. My father had started it, and I wanted to carry it on.” The company has achieved substantial growth over the years out of two locations. Its primary is based in Medford, which he refers to as Boston North. The second location, which he calls Boston South, is based in Randolph. The team at Kwik Auto Body Supplies strives to make sure every customer gets even more than the quality service and fast delivery they have come to expect. “Every distributor can sell paint and supplies and have a good delivery service, but we really delve into the consulting side of it by looking at the financials with our customers so they can see a clear picture of where things can be,” expressed Gary. Added value through consulting, training and technical support – that goes as far as providing a paint technician to fill in at a shop in emergency cases – is what they strive to provide for their customers day in and day out. Gary believes this, along with the strong partnerships and relationships they have made over the years, is what has led to their longevity as they have the ability to
deliver much more than cans of paint. “We never expect that loyalty,” he said of their long-term customers. “We know we need to earn it every week. It’s what we work to deliver and what is expected of Kwik Auto.” They work closely with their main paint line – PPG – which offers a whole business development suite that “really dives into everything with classes on estimating, front office procedures, productivity and outside-the-box classes that go beyond spraying a can of paint.” Kwik also works under the LKQ/ Keystone umbrella to serve as the aftermarket parts distributor’s “paint arm.” Although Kwik Auto Body Supplies strictly just sells automotive paint products, they can work with LKQ to put bundled deals together for their customers if they are in need of LKQ products. Long-term relationships on the inside are also a major part of the business’s success. Gary is grateful for his team of 30 employees, many who have stayed with the company for decades. Two examples are his general managers: Bill D’Orlando, who has been with him for 30 years, and Eldar Dutra, who has 23 years with Kwik Auto since they opened the Randolph location. “We don’t have a lot of turnover. We always try to do the right thing for our employees, and our customers like to deal with the same people who they have come to know over the years.” A longtime supporter of AASP/ MA, Kwik Auto Body Supplies is a Silver level sponsor in the association’s Vendor Affinity Program. Gary fully recognizes the importance of being involved with AASP/ MA. He even served on the board several years ago. Kwik Auto came on board as a sponsor in the program as Gary believes it’s important to their business to show their support for their local auto body association. With more than 60 years under their belts and not going away anytime soon, Gary truly believes their longevity lies in how they treat their customers and making sure they “work to deliver more than paint, day in and day out.” PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
18 August 2022
New England Automotive Report
A M P/
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Thanks to our VAP Members for their continued support during this pandemic crisis.
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August 2022 19
[NATIONAL] FEATURE
by Chasidy Rae Sisk
What Makes a Good Parts Supplier?
Parts, parts, parts – shops can’t perform repairs without them, but they don’t show up by magic. Each facility has its own process for ordering and acquiring the vehicle components needed for each job, yet even the best developed parts procedures rely heavily on the vendor or dealer supplying the shop. The ability to meet cycle time expectations and other KPIs is largely contingent on receiving the right parts, in a timely manner, so successful shops recognize that sourcing from a good parts supplier plays a vital role in their business outcomes. But what are shops actually seeking when they select a provider to work with – what makes a good parts supplier? Shop expectations vary to some extent, depending on their business model and whether they have a dedicated parts manager; however, most shop owners agree the most important factor in choosing where to source parts comes down to their relationship with the vendor and the level of customer service they receive. “The relationship you have with the salesperson makes a huge difference,” according to Dana Snowdale (D&S Auto Works; Abington) who orders parts for his shop. “It’s also important to work with a 20 August 2022
New England Automotive Report
salesperson who is knowledgeable about that particular make and model, who can inform you that you may need an extra bracket or clip. A lot of larger vendors deal with multiple lines, so they only have a couple salespeople who know that specific make and model, and their lack of knowledge can lead to overordering some parts. Developing a relationship is a key factor that helps both the shop and the vendor.” “Response times matter, and although many vendors are as short-staffed as we are these days, we need quick responses about availability and pricing so we can order parts without delays,” Kevin Gallerani (Cape Auto Body & Service; Plymouth) contributed. “Quoting ETAs is also important with the current condition of the supply chain. We need to know when the parts are coming as we’re sourcing them so we can plan accordingly.” “Customer service is tops for me,” agreed Matthew Ciaschini (Full Tilt Auto Body; West Hatfield). “Great parts suppliers answer our calls and are available when we need them. They have a better understanding of our industry and realize that we need the correct parts as soon as possible. They are willing to locate parts when they don’t have them, and
they answer the phones.” To achieve that, good parts suppliers focus on two aspects of customer service in particular: delivery and returns. “Service is the most important thing we’re looking for when searching for any supplier,” Gallerani stated. “We want parts to be dropped off first thing in the morning; if we don’t have those parts by 10am, we lose our chance of completing the repair that day. The better parts dealers offer a second route in the afternoon if something else arrives.” “We need to be able to count on the time that the delivery driver will arrive, and we expect them to do their due diligence,” Ciaschini explained. During the delivery process, shops often gauge the quality of the vendor based on the way they handle the parts. “How they stack the parts matters too,” Gallerani insisted. “We don’t want our order just thrown in the back of the truck to get banged around. We work with vendors who secure the parts so they arrive undamaged.” “Vendors make our lives easier when they separate the part orders by vehicle when it comes in, so our parts manager doesn’t waste time digging through a pile of parts to
continued on pg. 24
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[NATIONAL] FEATURE continued from pg. 20 determine what belongs to which job,” Ciaschini indicated. “Good vendors also allot their drivers enough time to wait while we unbox the parts to verify that we’ve received the correct, undamaged parts.” “The driver needs to be patient as the shop goes through the parts order to make sure the correct, undamaged parts are included,” Snowdale agreed. “It takes a little time, so some vendors get frustrated that we’re holding them up, but we also have a job to do.” In an ideal world, every order would contain exactly what the shop needed, and all parts would be in perfect condition. Unfortunately, that’s not the world we live in – parts often need to be sent back when shops receive incorrect or damaged parts, the job gets canceled or the vehicle is declared a total loss – and as such, a vendor’s return process can make or break how shops view their customer service. “We don’t have many problems with the return process,” Gallerani acknowledged. “We do a pretty high volume, so I’ve rarely had anyone refuse to take something back. On the OEM side, they’ll take all the parts back and refund your statement at the end of the month, which is the way it should be. Some aftermarket companies will delay refunds for up to six months, so we don’t buy from them because I’m not putting up with that.” “A good return process is important, but I think that hinges more on the shop,” Ciaschini suggested. “In our parts department, we have a return shelf, bin and white board for each vendor to check for returns; however, we try to capture any issues immediately when the parts come in to minimize returns and improve our relationships with our vendors. The return process is much easier with OEM parts, while a lot of aftermarket vendors require photos of the part not fitting before they’ll accept a return. We don’t really want to use those parts anyway, but that’s a personal business decision.” “The dealerships we order from handle parts returns in two extremely different ways,” Snowdale recounted. “Some require us to submit a parts return authorization online, which is time-consuming and frustrating. Others simply accept the returned part, give us a slip of paper and handle it internally, creating less administrative work for the shop.” Snowdale pointed out another customer service aspect that he values: “When a dealership doesn’t have a part we need or can’t get it in as soon as we need it, the good ones will track it down at another local dealer and connect us with them.” “When an ordered part won’t be in stock for weeks, a good dealer will search other dealers and shops locally and nationally to find out where it might be available,” Gallerani added. “Less desirable dealers don’t take the step of reaching out to other locations. The good dealers automatically search for that part and get it shipped this way. They go that extra mile.” “Digital ordering offers a great option that allows us to maximize margins so we can repair vehicles properly while still maintaining some profit,” Ciaschini added another measurement by which he judges vendors. Of course, profitability is vital to any successful business, so the pricing and discounts offered certainly contribute to shops’ selections of parts vendors. 24 August 2022
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“Price matching is huge!” Snowdale emphasized. “It saves on admin time and cuts back on cycle time, so it’s a major benefit when it comes to the consumer and the insurer.” “Discounts are great, but we’re willing to negotiate for better service,” admitted Gallerani. “Service costs money, so vendors offering extreme discounts don’t necessarily provide good service – and that’s not helpful because we need them to be consistently responsive and to deliver the parts.” “My discount is important, but OEM discounting is pretty uniform,” Ciaschini noted. “I value customer service more, and I’ve stuck with some of my vendors through recent increases because their service is superior. It can be difficult, especially since we’re still contending with suppressed labor rates, but we need to be able to rely on the vendor to provide the right parts in order to get the job done.”
“We want to work with parts vendors who are good at their job and eager to help the shop. They need to be knowledgeable about the vehicle line and able to answer our questions. Those factors are integral to putting the car back together quickly and properly.” Quality is an important consideration – yet, it’s largely alleviated by shops that emphasize the importance of utilizing OEM parts during the repair process. “We try to buy as many OEM parts as possible,” Gallerani said. “It speeds up the process since they fit correctly on the first try most of the time.” “Most shops try to use factory parts to reduce cycle time,” explained Snowdale. “Aftermarket parts are a whole different ball game, and quality is always a question. We try not to use aftermarket parts in our facility unless the customer understands it’s not like kind and quality and is willing to sacrifice fit and finish. Insurers force aftermarket parts as a stall tactic, requiring us to do a supplement and increasing, hindering or prolonging cycle time. With the suppressed labor rate in Massachusetts, we have no room for error and no time to stop and start the repair process.” “The quality of parts should be pretty standard when you’re ordering OEM, but since the pandemic, there’s a lot of sub-quality parts being forced out to satisfy the shortage,” Ciaschini lamented. “There’s a larger profit margin on aftermarket parts, so installing mostly
OEM parts means cutting into your margins somewhat and requires engaging with insurers in a way that wastes time and money.” Warranties play a less vital role for many shops, especially those that predominantly utilize OEM parts in the repair process. “We know what the OEM warranties and guarantees are,” noted Ciaschini. “They’re all basically the same,” Gallerani concurred. “Nothing really stands out differently unless you’re being forced to install aftermarket parts.” “We never really have to use any OEM warranties,” according to Snowdale. “If a part comes through damaged or incorrect, our dealers typically get another one in and overnight it to us with little hassle.” Over the years, the demands placed on parts vendors have changed – and the supply chain issues that began in 2020 with the pandemic elicit new concerns from shops selecting a supplier. “When the parts supply chain was easier, we typically made our buying source decision based on price,” Gallerani admitted. “Service is way more important now. Someone who answers the phone to give me an idea of when I can expect the parts allows us to schedule our jobs. Delivering the right parts on time is also vital. It’s less about what it costs now and more about who has the best team and support staff.” “We used to simply buy from the vendor with the best price, but that often led to really bad service,” Ciaschini recalled. “Creating four hours of additional work for our parts manager doesn’t save the shop any money; it actually costs us more. We’ve learned that it’s more important to be able to develop a relationship with our parts guy. We’ve
been dealing with one salesperson for 13 years, and our relationship is so strong that he drove halfway across the state to have us fix his vehicle. “There are flaws in everything, and parts aren’t always readily available,” he continued. “We want to work with parts vendors who are good at their job and eager to help the shop. They need to be knowledgeable about the vehicle line and able to answer our questions. Those factors are integral to putting the car back together quickly and properly.” A vendor’s knowledge may be the most important component for many shops. “The amount of changes and options available on each model is being more cumbersome to shops, and compared to five years ago, it’s become a much bigger headache to be specific about which parts are needed,” Snowdale pointed out. “Everything is about cycle time, so having a relationship with your parts supplier – being comfortable with them and understanding one another – means a lot. The process is a lot easier when you’re partnering with a vendor who comprehends what we’re going through, what the industry is all about and how they can help you.” Many factors contribute to classifying a parts supplier as “good,” but auto body shops overwhelmingly expressed the need for a vendor who understands their needs and goes above and beyond to meet them. It seems like shops want the same thing from vendors that consumers want from shops, reinforcing the common belief that customer service is king!
PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
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26 August 2022
New England Automotive Report
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New England Automotive Report
August 2022 27
[COVER] STORY Continued supply chain delays + ongoing workforce shortage = no relief from the backlog that has been plaguing Massachusetts body shops since late last year. If someone had predicted the influx of repair work that would inundate shops in 2022 just two years ago, most collision repairers would have laughed in their face. Yet, that far-fetched forecast has become a reality for many shops. Current inflation has driven gas prices sky-high, resulting in fewer vehicles on the road and fewer accidents, and the Massachusetts Department of Transportation website reports there have been 55,959 accidents so far this year, as of July 6, compared to 124,403 in 2021; however, body shops are not yet seeing any relief in the amount of work they’re receiving – in fact, many shops are busier than ever! Among the multitude of factors contributing to the ongoing backlog, two issues stand out as having the greatest impact on the delays in repairing vehicles: issues obtaining parts in a timely manner and the lack of qualified technicians and other staff. “We’re scheduling out into the middle of October,” an employee at Western Mass Collision (Springfield) told New England Automotive Report before rushing off the phone to get back to work. “There’s not much we can do about the backlog because parts just aren’t available.”
team is ultimate.” But the absence of new talent isn’t the only workforce issue impacting the current backlog. Existing technicians just can’t handle anymore work. “Technicians are tired,” acknowledged Rob DelGallo of Factory Collision & Restoration (Weymouth), which is booking six to eight weeks out. “Between people getting sick and the different COVID restrictions we’ve seen, everyone has had as much overtime as they want, and they’re getting burnt out.” Shops have spent months shouldering the heavy workload, and though keeping up with the increased volume of vehicles in need of repair poses plenty of challenges, resilient shops in the Commonwealth have found a way to look beyond the struggle to identify the opportunities that exist by utilizing lessons learned to strengthen their businesses for the future. “The backlog has very little to do with how we make everyday decisions on repairable vehicles,” Fuller explained. “Whether a job is coming in tomorrow or in three weeks, it has to meet certain criteria. Understanding the type of repair needed and who the insurance company is allows us to manage our process more efficiently. We’re being extremely selective about what we put on the floor, and for the first time ever, we’re rejecting work that doesn’t fit into our niche. With our reduced bandwidth and resources, we can’t
BACKLOG FORCES SHOPS TO STRENGTHEN CORE PRINCIPLES “It’s nearly impossible to schedule the workflow coming in,” lamented Josh Fuller (Fuller Auto Body & Collision Center; Auburn). “In the past, we could pick up speed and efficiency because we had more control over the variables, but now, identifying areas where we can become more efficient is a huge challenge, mainly because of the supply chain issues. We’re doing a lot of administrative work to properly identify everything the car needs – and obtain those parts – before we put it into production.” Matthew Ciaschini (Full Tilt Auto Body & Collision; West Hatfield) confirmed that the supply chain delays have not improved, noting, “It’s a very big struggle with some vehicle makes. We’ve had to go to major lengths to obtain certain parts.” Workforce shortages present obvious challenges with processing the repair through the shop…It’s pretty difficult to get work done when there’s no one available to do it! “The tech shortage gets more and more real with each passing year,” Ciaschini observed. “It will not change until a major shift is made in the labor reimbursement rate.” “It’s not just the technician shortage, but an overall labor shortage,” Fuller clarified. “We’re short on the tech side and also administratively, but just because the work is at our door, that doesn’t mean we have to do it all. It’s not beneficial to do it all in haste. Instead, we’re being smart about working with what we have – finding the right type of labor and the right members to join your 28 August 2022
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afford idle time or anything that prevents us from being less than super efficient. “When we set up an appointment with a customer, we ask to see their complete insurer estimate as a starting point before we disassemble the vehicle,” he quipped. “We want a chance to talk to the customer, so we can determine what their best repair options might be, so we can try to align that with production efficiencies. Even though we have the space, we’re not going to store cars simply for the sake of storing cars.” Fuller’s decision to reject any work that doesn’t fit his niche is a business model that’s becoming more common as shops realize that insurers lose some of their influence when there’s such an abundance of work. The ongoing backlog is allowing shops to pick and choose their work…and even seek better rates. This phenomenon is happening all across the US and was even mentioned during a Collision Industry Conference (CIC) earlier this year when Jill Tuggle, executive director of the Auto Body Association of Texas, urged collision shops to consider their current power: “We know fear is a driving factor to severing ties with these insurer relationships. If there ever was a time to test the waters on operating independently of those contracts, it would be now because you’re going to get the work; people are already turning away work because they just can’t do it. Seize the moment, and try it out. Many
by Chasidy Rae Sisk
in this room would agree that the ones who have decided to cut that tie haven’t regretted it.” Full Tilt Auto Body & Collision has seen a small decline in the amount of incoming work, from a month to three weeks, which Ciaschini attributes to “being independent. Since we’re not on any lists, insurers don’t direct work our way, but we’ve actually received a significant amount of work from nearby referral shops because they’re so overwhelmed. A lot of shops think they need to be on insurers’ lists, or they’ll lose work to referral shops – we have several referral shops around us, yet we stay plenty busy.” Rather than seeking work through relationships with insurers, Ciaschini’s efforts hinge on attracting his own client base. “From our website to social media, we constantly focus on marketing our shop on merit and customer reviews, so we never have to rely on insurance companies to send work to us. Our online reviews really drive people to our shop, especially younger people who tend to be more distrustful of where an insurer tells them to go. Building our own client base makes it easier to request a co-pay from the customer (balance-bill) when we have to. I wish other Massachusetts shops would become more independent – if you want to repair cars properly, versus how the insurer tells you to do it, get off their lists, and take back your business by doing some of your own marketing. You might be pleasantly surprised by what you can accomplish on your own.” The ongoing backlog has also empowered DelGallo to “turn down certain insurance companies. We’ve been fighting for a fair labor reimbursement rate for decades, but the referral/program shops are the ones hurting us by doing whatever the insurance company wants. Insurers refuse to pay for required procedures, which still need to be done. Referral/program shops say, ‘Yes, Master,’ rather than fight for what they know is right because they are suffering from ‘learned helplessness.’ “We’re on the other side – ‘This is what we do, and this is what it costs. Pay it, or we’re going to collect a co-pay from the customer.’ And the customers get it,” he insisted. “Customers pay the bill, and most of the time, the insurance company just pays them directly because that’s what they’re supposed to do, protect them from paying for the repair after an accident. Customers have informed us that insurers tell them, ‘We’ll pay you, but we don’t want to pay them.’ They don’t want to set that precedent.” But it’s also important that shops don’t succumb to the belief that the backlog is here to stay. “We can’t control the amount of claims that happen,” Fuller pointed out. “The only thing shops can control is our own ability to pivot quickly and maintain our margins during times when we have to change the way we operate constantly. What worked three months ago doesn’t necessarily work today, so we have to consistently ask ourselves, ‘What can we do better today?’ And the most important thing we have to continue doing, no matter what, is educating and advocating for our customers.” All signs indicate that shops will continue to have plenty of work to stay busy for a while longer, but it’s important to make the time to work ON your business and start investing the effort into process and workflow improvements that can do more than help you increase profits – the right exercises will enhance and strengthen your shop, allowing you to flex your muscles and take back control of your business! PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
New England Automotive Report
August 2022 29
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30 August 2022
New England Automotive Report
New England Automotive Report
August 2022 31
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New England Automotive Report
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New England Automotive Report
August 2022 33
[LEGAL] PERSPECTIVE by James A. Castleman, Esq.
What the Heck is Estoppel?
What the heck does the word “estoppel” mean, and why should you care about it? Estoppel is a technical legal principle that is studied at length in law schools, and upon which many legal cases have been decided. It is important because, when it applies, it legally prohibits someone from being able to maintain a particular stance or policy. Estoppel applies in two primary situations: In one situation (called “promissory estoppel”), it applies when a claimed stance or policy by a person or company conflicts with a previous action or statement by that person or company. In another type of situation (called “collateral estoppel”), it applies when there is a prior court judgment that has already ruled against the person or company on the same issue. You do not need to know all of the legal subtleties and intricacies about estoppel, but you should care about it and have a basic understanding of it. It may mean that you or your customer could be able to use estoppel to prevent an insurer from denying coverage for a loss or from denying payment for a certain part or procedure or other item related to a repair. By the same token, be aware that an insurer may try to use it to avoid paying for something related to a repair as well, if you or your customer made a prior representation to the insurer. What does this mean to a collision repair shop and its customers? Have you ever had an insurer tell you that there is coverage for a loss to a car at your shop, and then after you have started (or completed) repairs, they tell you that they made a mistake and won’t cover the loss, maybe while mumbling something about “SIU”? Have you ever had an insurer previously pay for a particular procedure many times and then, without warning, tell you that they won’t pay it for a car currently in your shop? Have you ever had an appraiser agree to pay for a certain procedure or part – or a particular labor rate – and then not have the item show up on their supplement, or maybe have the appraiser’s allowance be overruled by their supervisor? Have you ever learned of an insurer being sued by a different shop or their customer – or even by you – for a particular item or procedure and losing the lawsuit, but then have 34 August 2022
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that insurer still refuse to pay you for that item or procedure? Under the right circumstances, all of these situations might be governed by the principle of estoppel, and the insurer could be legally required to pay for what they are denying. Requirements for “promissory estoppel” In the context of a claim against an insurer, in order for promissory estoppel to apply in your favor against an insurer, the insurer or their representative must have made a statement or engaged in conduct that made you or your customer believe that the insurer would cover a loss or pay for a certain item, and then you or your customer must have relied on that statement or prior conduct to your detriment. A prime example is when an insurer says that they are covering a loss. You then rely on that statement and proceed with repairs. Subsequently, the insurer changes their mind and says they are not going to pay for the repairs. The insurer may have made a direct statement that they were covering the loss. But they do not need to make an actual statement; it is sufficient if, by their conduct, they led you and your customer to believe that they were going to cover the loss. For example, the appraiser may have come to your shop and negotiated a cost of repair (and maybe a supplement) without telling you that there was any question of coverage. Or perhaps there were several dealings with the appraiser and the claims adjuster on a loss, with no one giving you any hint that the claim might be denied. Meanwhile, you have spent a lot of time and money making repairs. Under these circumstances you (and your customer) may have a legally enforceable claim against the insurer. After all, either by their words or their actions, the insurer led you to believe they were covering the claim, and then you relied on their statements or actions in proceeding with repairs and spent time and money on the repairs. The insurer now may be legally “estopped” from claiming that they do not owe you for the repair work, because you relied on their direct or implied promise to pay for the repairs to your detriment. This principle may also apply just for a particular procedure, part or labor rate. Again, as an example, an insurer in the past may continued on pg. 38
New England Automotive Report
August 2022 35
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Balise Nissan of Warwick 1350 Post Rd. Warwick, RI 02888 TOLL FREE: 800-992-6220 FAX: 800-254-3544 wparts@baliseauto.com www.BaliseWholesaleParts.com One Call, One Truck for Eleven Brands!
Quirk Auto Dealers 115 E. Howard St. Quincy, MA 02169 Toll Free: 877-707-8475
36 August 2022
New England Automotive Report
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Check out MoparRepairConnection.com for resources, promotions and technical information. ©2020 FCA US LLC. All Rights Reserved. Chrysler, Dodge, Jeep, Ram, Mopar and SRT are registered trademarks of FCA US LLC.
NEAR_Collision_COL15.indd 1
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August 2022 37 9/16/20 9:21 AM
[LEGAL] PERSPECTIVE continued from pg. 34 have consistently paid for a particular item, and you know that they have always paid for it. You call for an appraisal or a supplement, and the appraiser tells you to make the repair and they will write for it after you have done it. You make the repair and submit your bill for the same amount that you have previously been paid. But this time, without warning, the appraiser says: “Oh, I can’t pay for that” or “That is more than I can agree to.” Or maybe an insurer has consistently paid your storage and/or administrative charges for a total loss, but now, out of the blue, they refuse to pay it. Really? What changed? Again, you have relied on the insurer’s consistent prior actions and have made and billed for the repair or storage in line with those prior actions, and once more, you have spent the time and money to cover that repair or storage item. Again, the insurer might be estopped from refusing to pay. There is a classic Massachusetts case, unrelated to auto repair, in which a storage tank maintenance company purchased general liability insurance. An accident occurred while the company was cleaning a large tank, resulting in a damaging explosion. The insurer paid a lot of money to cover the loss. The maintenance company subsequently renewed their policy, paying an increased premium.
Use estoppel to prevent an insurer from denying coverage for a loss or from denying payment for a certain part or procedure or other item related to a repair. When a second similar accident occurred, the insurer read their own policy more carefully and discovered that coverage for this particular type of loss was actually excluded, and they denied the claim. When the maintenance company sued the insurer, the court agreed with the insurer’s interpretation of the policy regarding the exclusion. But even though it appeared there was no coverage, based on the principle of estoppel, the court still made the insurer pay the claim. After all, the maintenance company relied to their detriment on the insurer’s prior acceptance of the same type of claim and, in fact, had agreed to pay an increased premium based on it. No matter what the policy language said, the insurer was still on the hook. Similarly, no matter what an auto insurance policy actually says, what did your customer’s insurer (or insurance agent) 38 August 2022
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previously tell them about what would be covered if they had a loss? Requirements for “collateral estoppel” Under the law, once a final judgment against a person or entity has been issued by a court, that person or entity is stuck with the underlying findings of the case if the same issues arise in the future. As an example, if an insurer has been sued to pay for a particular common auto repair procedure (or to pay a certain amount for a part or labor rate), and a final judgment has been entered by a court against that insurer, then the insurer may be stuck paying for that particular procedure, part or labor rate for all repair claims where they are relevant. Notably, it does not need to be the same repair shop or customer that is dealing with the insurer after the judgment has been entered. If the issue is exactly the same, then the insurer is bound by the prior final judgment in future dealings with anyone. On the other hand, a judgment entered in favor of the insurer in one case does not bind other repair shops or customers that sue the insurer on the same issue. After all, the other repair shops or customers were not parties to the prior case and did not have the opportunity to litigate their particular claims. But the insurer was a party to that prior suit, they had the opportunity to fully litigate the issue, and they are stuck with the prior final judgment against them. (Note: For these purposes, a settlement is NOT a final judgment; nor is a court judgment that is being appealed.) What should repair shops do to possibly be able to use estoppel to their advantage? In order to be able to raise the issue of estoppel against an insurer, a repair shop must be able to fully document their claim. Make notes of discussions that you have with appraisers and/or claims adjusters, and if you can, follow up with emails confirming what was discussed. Keep copies of all paperwork and emails that you receive from appraisers and their insurers and all emails and other communications that you send to insurers. Most importantly, keep track of all items that each insurer has paid for in the past. These are the basic rules. But it also behooves repair shops and their customers to take affirmative actions on their own behalf. Do you intend to charge for a certain procedure or a specific amount for a certain part, or do you have certain policies or make certain charges related to storage – including, perhaps, administrative charges? If so, let the insurers that you deal with – in advance, in writing and often – know what your policies and charges are. Particularly, if an insurer has paid you these amounts in the past and does not object after receiving your notices, an insurer may be estopped from refusing to pay these charges. If all your ducks are in line and you can establish that you continued on pg. 40
The Blueprint is Right in Front of You.
TOUCH
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MULTIBENCH
The Spanesi® Touch Electronic
Measuring System and Multibench Structural Repair Workstation are designed to work together seamlessly. The Multibench allows technicians to drive most vehicles directly onto its low-profile ramps. After the vehicle is disassembled to evaluate the damage, the Touch rolls right up, letting the technicians gather measurement data in no time. With its 10-ton pulling column, the Multibench also serves as a single-bay repair solution. Finally, technicians use Touch to check structural repairs and ensure proper OEM specifications are achieved.
Spanesi Americas, Inc. 123 Ambassador Dr. STE 107 Naperville, IL 60540
Structural Repair Workstation Touch Electronic Measuring System: Comparative Measurements Complete Documentation Mechanical Parts Measurements Suspension Parts Measurements User Added Points with Photos Vehicle Frame and Structural Items Wheel and Tire Alignment Checks
Multibench Structural Repair Workstation: Loading Capacity 3,175kg (7,000lbs) Lifting Height 1.45m (4’ 9”) Lift Time (Ascension) 45 seconds Pulling Force 10 Tons
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224-SPANESI (224-772-6374) www.spanesi-americas.com facebook.com/spanesiamericas New England Automotive Report
August 2022 39
[LEGAL] PERSPECTIVE continued from pg. 38 are relying on your disclosures and the insurer’s prior actions, you just might be able to successfully get paid what you want. By the same token, though, be mindful of what insurers are communicating to you and what your prior statements and conduct have been. Are insurers sending you and/or your customers notices that they will not pay for certain items, or that they will pay only a certain labor rate or for only a certain number of days of storage? If you are receiving these notices, have you responded to let the
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New England Automotive Report
insurers know that you object? Have you consistently accepted a particular insurer’s dictated labor rate and still continue to repair their customers’ cars – perhaps without written objection by you or balance billing the customers? Do not be caught in an insurer’s attempt to be able to justify an estoppel claim on their own behalf. Conclusion “Estoppel” may just seem like a fancy legal term, but in regard to repair shops dealing with insurers, it may be an important concept for you and your customers to understand and use. Make sure that you know what estoppel means, how it works and what you need to do to have it work in your and your customer’s favor.
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.
PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
New England Automotive Report
August 2022 41
ADVERTISERS’ INDEX Accudraft Paint Booths................................. OBC Audi Group...................................................... 31 BMW Group.................................................... 10 Boch Chevrolet................................................. 40 Boch Hyundai.................................................. 32 Colonial Auto Group.......................................... 2 Crown Collision Solutions................................ 17 Empire Auto Parts............................................ 42 Ford Group...................................................... 30 Grieco Toyota................................................... 16 Honda Group................................................... 11 Hyundai Group................................................ 40 Ira Subaru......................................................... 12 Ira Toyota of Danvers....................................... 13 Kelly Automotive Group................................IBC Kia Group........................................................ 40 Linder’s, Inc. .................................................... 16
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Lombard Equipment........................................ 21 Long Automotive Group.................................. 41 Mazda Group................................................... 30 McGovern Chrysler Jeep Dodge Ram �������������� 25 Mopar Group................................................... 37 Nissan Group................................................... 36 Quirk Wholesale Parts...................................... 35
Lamps
Bumper Covers
Radiators
Hoods & Fenders
Reliable Automotive Equipment.................. 22-23 Matrix Edge/Valspar........................................... 3 Sarat Ford Lincoln............................................ 17 Spanesi............................................................. 39 Subaru Group................................................... 27
Door Mirrors
Steel Bumpers
Cooling Fans
Grilles & Bezels
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New England Automotive Report
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Thomas Greco Publishing................................. 17 Toyota Group................................................... 26 USI North America............................................ 4 Volvo Group..................................................... 32 VW Group....................................................... 33 Wagner Motors................................................... 9 Wheel Collision Center.................................... 42 Womens Industry Network............................... 32
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