New England Automotive Report September 2015

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AUT M TIVE Serving the New england Collision and Mechanical Repair Industry

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

September 2015 u.S.a. $5.95

Hope at the

State HouSe:

aaSp/Ma Brings Labor Rate Campaign Back to Boston

www.grecopublishing.com

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September 2015 • Volume 13, No. 9

CONTENTS

DEPARTMENTS VICE PRESIDENT’S MESSAGE 8 | How Well Do You Know and Use the CMR?

by Adam Ioakim SPONSOR SPOTLIGHT 14 | Disability, Accident, Cancer: Supplemental Insurance Programs from Aflac

by Jacquelyn Bauman LOCAL NEWS 21 | ADALB Rescinds Controversial Advisory Ruling 22 | Governor Baker, AASP/MA’s Starbard Tour Traditional Breads 22 | AASP/MA Participates in Regulatory Listening Session 23 | New ADALB Insurance Member Seeks Unity Between Shops, Carriers 26 | Remembering Peggy Cahill NATIONAL NEWS 36 | ABAC Responds to CT Supreme Court Decision in $34M Case

by Joel Gausten AASP/MA MEMBER SHOP SPOTLIGHT 44 | Patterson Auto Body

by Jacquelyn Bauman EQUIPMENT AND TOOLING 54 | Aluminum and Beyond: What Advanced Materials are Coming?

by Jacquelyn Bauman

COVER STORY 46 | HOPE AT THE STATE HOUSE: AASP/MA Brings Labor Rate Campaign Back to Boston by Joel Gausten

GUEST EDITORIAL 48 | SUPPLY AND DEMAND IN THE MA COLLISION REPAIR INDUSTRY by Ray Belsito, Jr.

ALSO THIS ISSUE 7 | CASINO NIGHT SAVE THE DATE 10 | A MESSAGE FROM THE EXECUTIVE DIRECTOR 15 | AASP/MA SPONSORS 16 | AASP/MA ANNUAL CASINO NIGHT SPONSORSHIP CATEGORIES 18 | AASP/MA STATEWIDE MEETING ANNOUNCEMENT

28 | AASP/MA MIDSTATE CHAPTER ANNUAL BBQ ANNOUNCEMENT 33 | TRAINING OPPORTUNITIES: I-CAR CALENDAR OF EVENTS 40 | AASP/MA WESTERN CHAPTER CLAMBAKE ANNOUNCEMENT 45 | AASP/MA MEMBERSHIP APPLICATION 58 | INDEX OF ADVERTISERS New England Automotive Report

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AUT M TIVE STAFF

September 2015

September 8, 2015 AASP/MA Statewide Meeting Doubletree Hotel 5400 Computer Dr., Westborough, MA (See page 18 for details)

September 11, 2015 AASP/MA MidState Chapter BBQ SAC Park 438 Lake St., Shrewsbury, MA (See page 28 for details)

PUBLISHER

ART DIRECTOR

Thomas Greco (thomas@grecopublishing.com)

Lea Velocci (lea@grecopublishing.com)

DIRECTOR OF SALES

MANAGING EDITOR

Alicia Figurelli (alicia@grecopublishing.com)

Jacquelyn Bauman (jacquelyn@grecopublishing.com)

EDITOR

PRODUCTION

Joel Gausten (tgpjoel@verizon.net)

Donna Greco (donna@grecopublishing.com)

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

www.grecopublishing.com New England Automotive Report is published monthly by TGP, Inc., 244 Chestnut Street, Suite 202 Nutley, NJ 07110. Distributed free to qualified recipients; $48 to all others. Additional copies of New England Automotive Report are available at $5 per copy. Reproduction of any portions of this publication is specifically prohibited without written permission of the publisher. The opinions and ideas appearing in this magazine are not necessarily representations of TGP Inc. or of AASP/MA. Copyright © 2015 by Thomas Greco Publishing, Inc. Images courtesy of www.istockphoto.com/IStock Photo.

October 2015

October 16, 2015 2015 AASP/MA Western Chapter Clambake Polish American Club 139 Southwick St., Feeding Hills, MA (See page 40 for details)

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, Jr. WESTERN CHAPTER DIRECTOR Peter Langone

AASP/MA EXECUTIVE DIRECTOR

FOR A FULL LISTING OF UPCOMING AASP/MA EVENTS AND TRAINING OPPORTUNITIES, PLEASE VISIT WWW.AASPMA.ORG

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

WWW.AASPMA.ORG New England Automotive Report

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VICE PRESIDENT’S MESSAGE

How weLL do You KNow aNd uSe tHe CMR? Do you know your CMR? Do you use it to your advantage? Something we recently started paying extra attention to in our shop is 211 CMR 133.04 – a regulation regarding the reimbursement by insurers to shops for ill-fitting aftermarket parts. This section states, “If the repairer uses the source and specified part(s) indicated on the appraisal and these parts are later determined by both parties to be unfit for use in the repair, the insurance company shall be responsible for the costs of restoring the parts to usable condition. If both parties agree that a specified part is unfit and must be replaced, the insurer shall be responsible for replacement costs such as freight and handling unless the repair shop is responsible for the part(s) being unfit, or unless the insurer and repairer otherwise agree.”

Of course, it has always been that most of us out there prefer to never use an aftermarket part, but if we want to

8 September 2015

be sticklers for the regulations, it does say that the insurance company can write for aftermarket parts on any car with over 20,000 miles. There are some obvious exceptions that we can use in our favor to avoid this pitfall, but for this case, let’s assume we are going to attempt to use that part and show it is unfit for use, as the regulation suggests.

When we receive an aftermarket part that is unfit for the job, we have to unpack it, mirror match it and fit it. Once we determine that it is not like kind and quality and it is deemed officially unfit by both parties, we return it for an OEM part. We now need to wait for that OEM part, as well as repackage the aftermarket part, tag it for return, make sure it is collected by the vendor, reconcile a credit for the cash we floated and create a supplement for the OEM part. You can get even more granular on what this process really entails, but you get the picture. This is where the most

New England Automotive Report

important part of the regulation that we have overlooked in the past comes into play: “…the insurer shall be responsible for replacement costs such as freight and handling…” To me, “handling” means the insurance carrier is responsible for covering the entire process I just described.

Not enough shops are pushing insurers to pay them back for the price of shipping and handling on parts that don’t fit properly. There needs to be a move by shops to use the regulations that are set in place to help us. I know some shops that have insurers pay in full for the aftermarket part and the OEM part. How much you push the regulations is up to you, but there has to be some sort of compensation for jumping through the hoops if you want to follow the CMR. So my question to you is: How well do you know your CMR? This is just one small part that I’ve personally been

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dealing with, but we as shop owners need to ask insurance companies to stand by these regulations and hold them accountable. We need to be billing for these things on our supplements. I encourage everyone to stop to take the time to reread the CMR (both 211 and 212), find the things in your shop that can be bettered and use these regulations as your defense.

These guidelines are in place for our own benefit. We need to take advantage of them and use the tools at our disposal. If you have any questions about any of the regulations, I suggest reaching out to a member of the Board.

We are always here to help.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

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

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A MESSAGE FROM THE EXECUTIVE DIRECTOR

aaSp/Ma’S VeRY BuSY SuMMeR Dear Members, This summer has been quite an exciting and invigorating time for AASP/MA and its members.

On July 21, the ADALB repealed their Advisory Ruling (2014-1) regarding photos and videos being considered “personal inspections.” The Ruling was rescinded by a 3-2 vote, with Rick Starbard, Bill Johnson and Joe Coyne voting in the affirmative to remove it. So what does this mean for shops? The original language of the Advisory Ruling did two things. First, it opened the door for a non-licensed individual (a consumer) to take a photo (or photos) and/or video of the damaged vehicle.

We know from experience that this created a litany of issues for shops, including unseen damages, damages greater than expected, safety concerns, etc. Additionally, it opened the door for many insurers to ignore the applicable $1,500 deductible, as outlined by 212 CMR 2.04, Section 1 (a). In fact, Liberty Mutual sent a letter to their appraisers outlining this very position. AASP/MA is pleased the ADALB repealed this Ruling, and we look forward to working with them to create a more robust option for the eventual rewrite of 212 CMR. On August 11, the Division of Insurance (DOI) hosted a listening session on 211 CMR, relative to auto body regulations.

AASP/MA and its Legislative Committee presented comments at this listening session. (See page 22 for a recap.) The Commonwealth Automobile Reinsurers (CAR) has also opened their

Performance Standards for a full review. As you may recall, the association was able to secure an interim change to the language last year. The association has submitted language, which is currently being considered by CAR’s various committees. At the time of this writing, we expect the full rewrite to be released within a few weeks.

Several pieces of Labor Rate legislation, including our filed matters (HB 805 and SB 561), were heard before the Joint Committee on Financial Services on July 14. AASP/MA President Molly Brodeur, Treasurer Kevin Gallerani, Past President Rick Starbard and Secretary Gary Cloutier testified on behalf of the association. John Kennedy of Roger L. Putnam Vocational Technical Academy testified as well. John Murphy, executive director of the Massachusetts Insurance Federation, gave the only testimony offered in opposition. As you may have guessed, he attributed the low Labor Rate to the number of shops located in the Commonwealth – a supply and demand issue, he said. According to Murphy, the need for car repairs has gone down and because there are so many shops, the Labor Rate has remained low.

There was no evidence provided by Murphy that the number of cars needing repairs has decreased, and the association has obtained information refuting his position. It was clear that the legislators were not supportive of this position. In fact, many of them shared experiences that highlighted the need for increased rates.

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The Committee was very supportive of our position and understands the industry’s struggle. We are working to incorporate some of the questions they had into our written testimony, and we plan to submit additional materials to the members for their consideration. I want to thank those who came into the city to testify. We appreciate your continued dedication to the association and your efforts on behalf of the industry. The hearing was also picked up by the State House News Service just minutes after adjourning. A copy of the article can be found on the “Members Only” section of our website.

Our members should feel energized by the recent events outlined in this message. NOW is the time for change. NOW is the time for growth. NOW is the time for the industry to stand behind the only voice in the Commonwealth advocating on your behalf to build the success of the auto repair industry. Do not miss out on the opportunity to be a part of the conversations that are shaping the industry.

Sincerely,

MASSACHUSETTS

Jillian Zywien, Executive Director

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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SPONSOR SPOTLIGHT

dISaBILItY, aCCIdeNt, CaNCeR: SuppLeMeNtaL INSuRaNCe pRogRaMS FRoM

As veteran Silver Sponsors for AASP/MA and longtime supplemental insurance providers for the automotive repair industry, Aflac is extremely familiar with the needs of individuals in this trade. While major medical insurance pays hospital and doctor bills in the case of an accident or illness, Aflac pays directly to the policyholder, covering the losses that come from being out of work and to offset medical out-of-pocket expenses. Three of these plans that are currently available are disability coverage, accident indemnity and cancer protection.

According to marketing literature supplied by the company, “Almost one-third of Americans entering the workforce…will become disabled before they retire. Ninety percent of disabilities aren’t work-related and therefore don’t qualify for workers’ compensation benefits.” Even if an accident occurs on the job, Aflac’s accident coverage takes care of the expenses that aren’t taken care of by other forms of insurance.

“There are a number of things that set our disability coverage apart from other options out there,” says Aflac Regional Sales Coordinator David Hallett. “For one thing, we have rate stability on our products. Unless you modify your coverage, there are no rate increases. Plus, the plans are completely portable, so if you leave your current employer, you can take it with you anywhere you go and our claims process is streamlined.”

Another benefit of this particular plan is that, if you return to work after an accident or illness under light duty

provisions and are collecting below 80 percent of your wages, you can still collect half of your benefits from Aflac in order to cover extra expenses that have been compromised by the lowered income.

“Our accident indemnity works in much the same way,” Hallett states. “It pays above and beyond other insurances, regardless of disability coverage, health insurance or workers’ compensation. There’s no need for coordination of benefits. It’s triggered by the severity of the medical event, so the more serious the injury, the more money it pays.”

There is a similar policy for their cancer protection plan, of which there are a number of provisions to aid policyholders in one of the most common and most devastating times of need.

“A lot of times when people get injured or are sick, as in the case of a cancer diagnosis, most disability policies repay you about 60 percent of your paycheck,” Hallett explains. “The problem is that most of us need the full amount of our paychecks. With cancer, this money from your plan can help cover copays, medical out-of-pocket costs and non-medical lost wages.”

This particular coverage distributes more back to policyholders depending on treatment, as there are 25 benefits — from initial diagnosis to radiation and to chemo — all paid directly to them.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

For more information about Aflac, contact AASP/MA’s Aflac representative, Evan Cross, at (509) 523-3047 or by email at evan_cross@us.aflac.com.

AASP/MA WORKS TO MAKE YOUR DAILY BUSINESS IN THE AUTOMOTIVE SERVICE INDUSTRY AS EASY AS POSSIBLE. Through relationships with a variety of companies, the association provides member benefit services such as uniform services, SEO and website management, legal consulting services and so much more. Now we want to hear from YOU. Is there a service or company you think would make a great addition to AASP/MA’s list of benefit providers? Let us know!

Contact Executive Director Jillian Zywien at (617) 574-0741 or email her at jzywien@aaspma.org.

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MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

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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!

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2015 AASP/MA Casino Night Sponsorship Categories This year will feature more gaming tables, more entertainment, more raffle prizes and a special guest appearance!

Tournament Sponsor- $7,500

Board of Directors Sponsor (2)- $750

Package Includes:

Package Includes:

Company logo printed on event admission tickets Company logo printed on all promotional/marketing materials Extensive coverage in our publications (NEAR & Damage Report) NEW Picture with the Board of Directors published in NEAR & Damage Report NEW Company logo displayed on the outside stadium signage (Visible from the hotel and parking lot) NEW End Zone signage (Jumbotron) complete with company logo/slogan NEW Ribbon screens (surrounding the stadium) will display company logo NEW Prominent dinner station signage NEW Prominent dessert station signage NEW Attendees on the stadium tour will receive promotional materials for your company President & ED will recognize your company during the speaking program Company banner (you provide) will be displayed at the podium Four event tickets with stadium tour and reserved seating NEW Electronic book ad will be displayed on several TVs throughout the event Company logo listed on AASP/MA website with a link back to your site A member of your company will “kick off” Casino Night!

NEW Electronic book ad will be displayed on several TVs throughout the event Recognition during President and ED’s speaking portion NEW Picture with the Board of Directors published in NEAR & Damage Report One event ticket with stadium tour Exclusive opportunity to personally present a small gift to each Board Member in recognition of their service to the association. (Your donation will pay for a ticket and two drinks for each Board member.)

“High Roller” Sponsorship- $5,000

Gaming Table Sponsor- $750

Package Includes:

Package Includes:

NEW End Zone signage (Jumbotron) complete with company logo/slogan NEW Ribbon screens (surrounding the stadium) will display company logo NEW Prominent dinner station signage NEW Attendees on the stadium tour will receive promotional materials for your company NEW President & ED will recognize your company during the speaking program Company logo prominently displayed at two gaming tables NEW Two event tickets with stadium tour and reserved seating Engraved “High Roller” trophy to present to the night’s winner Picture with winner published in NEAR & Damage Report NEW Electronic book ad will be displayed on several TVs throughout the event

Company logo prominently displayed on gaming table One event ticket with stadium tour NEW Electronic book ad will be displayed on several TVs throughout the event

SOLD TO:

SOLD TO:

Exclusive Casino Night Gift Sponsor- $3,000 Package Includes:

SOLD TO:

NEW End Zone signage (Jumbotron) complete with company logo/slogan NEW Prominent dinner station signage Company logo prominently displayed at registration Representative from your company present at registration handing out your gift Three event tickets with stadium tour NEW Electronic book ad will be displayed on several TVs throughout the event

“Pit Boss” Sponsorship- $2,500

Jim Simeone Texas Hold’Em Tournament Sponsor$1,000 Package Includes:

SOLD TO:

Company logo prominently displayed on final tournament table One event ticket with stadium tour NEW Picture with winner published in NEAR & Damage Report Engraved trophy to present to the night’s winner NEW Electronic book ad will be displayed on several TVs throughout the event

Spin & Win Sponsor- $650 We will provide our famous four-foot “Spin & Win” wheel with your company logo in the center of the wheel and your company name on five spokes. You provide the prizes. Each attendee will receive complimentary spins as part of the admission price. Spin & Win with your company logo will be listed on all publicity for attendees

Package Includes: NEW Electronic book ad will be displayed on several TVs throughout the event One event ticket with stadium tour

End Zone Signage Sponsor (Jumbotron) - $750 Package Includes: NEW End Zone signage (Jumbotron) complete with company logo/slogan ($2,000 value) NEW Your company logo listed on the website with a link back to your site

Package Includes:

SOLD TO:

NEW End Zone signage (Jumbotron) complete with company logo/slogan NEW Prominent dinner station signage Company logo prominently displayed at one gaming table Two event tickets with stadium tour NEW Electronic book ad will be displayed on several TVs throughout the event

“Card Shark” Sponsorship- $1,500 Package Includes:

SOLD TO:

NEW Ribbon screens (surrounding the stadium) will display company logo Company logo prominently displayed at two gaming tables Two event tickets with stadium tour NEW Electronic book ad will be displayed on several TVs throughout the event

Cup Sponsor- $600 Package Includes: Provide us with 200 cups imprinted with your logo (18oz minimum). Attendees will use these cups all night to hold chips and coupons.

One event ticket with stadium tour NEW Electronic book ad will be displayed on several TVs throughout the event NEW Your company logo listed on the website with a link back to your site

Company TableNEW PRICING- $1,125 Package Includes:

Dinner and Dessert Sponsor- $1,000 Package Includes: Two event tickets with stadium tour Prominent dinner station signage Prominent dessert station signage NEW Electronic book ad will be displayed on several TVs throughout the event

NEW Prominent company signage at a VIP reserved table NEW Ten event tickets with stadium tour (cost nine tickets) NEW Two drink tickets

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

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CAN’T MAKE IT TO SEMA THIS YEAR? MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

THIRD QUARTER STATEWIDE MEETING Tuesday, September 8, 2015 Doubletree Hotel-Westborough 5400 Computer Drive, Westborough, MA 01581 5:30pm Registration 6pm Dinner and Presentations

Executive Director of the Society of Collision Repair Specialists (SCRS), Aaron Schulenburg, is coming to Massachusetts, presenting exclusively to AASP/MA members. Aaron will provide an inside look at trends and issues facing the auto repair industry on a national level.

A passionate representative of the collision repair community, Aaron Schulenburg serves as the executive director for the Society of Collision Repair Specialists (SCRS), a national trade association representing over 40 affiliate associations, 6,000 collision repair businesses and 58,500 specialized professionals within the collision repair industry.

Having previously held positions at collision repair facilities in Arizona, Delaware and Maryland, Aaron has entrenched himself in active industry involvement throughout his career, affording him the ability to bring relevant firsthand experience to his role. He served as the first administrator for the nationally acclaimed Database Enhancement Gateway (DEG), has chaired committees on Estimating and Consumer Relations for the Collision Industry Conference, held an executive seat on the Washington Metropolitan Auto Body Association Board of Directors and served on the National Auto Body Council Board of Directors.

Aaron has been highlighted by his membership as a creative and positive leader within the collision industry, and brings insight on areas of focus for collision repair professionals, garnered through SCRS’ national position in the industry.

TECHNICAL TRAINING SPONSORED BY GM PARTS AND LONG CADILLAC! GM Structural Repair

This clinic discusses repairing and replacing structural components on GM vehicles. The seminar will touch on three important areas to repairing and replacing structural components on a vehicle. The three areas are measuring, cutting and welding. Each area relates to the performance of the repair as it will meet specific tolerances and factory guidelines. It is crucial during the repair to validate not only the three areas to meet, but also specification and consumer satisfaction. The clinic will also discuss the recommendations for aluminum repair procedures for front and rear rails on GM vehicles.

TICKETS: Current Members Registering by 5pm on Thursday, September 3: $35 Non-Members Registering by 5pm on Thursday, September 3: $70 Tickets purchased after the deadline will cost the $70 non-member price Register online at the AASP/MA website (aaspma.org) by selecting “Quarter 3 Meeting,” by phone at (617) 574-0741 or email at ckane@aaspma.org. Make checks payable to AASP/MA and mail to AASP/MA, 12 Post Office Square, 6th Floor, Boston, MA 02109. (Please notify our office if you plan on sending a check so we can add you to the registration list.)

Cancellation Policy: Registration must be received by Thursday, September 3 at 5pm. All registrations are final.

There are no refunds for cancellations. We cannot guarantee seating or meals for anyone who registers after the deadline.

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LOCAL NEWS

adaLB ReSCINdS CoNtRoVeRSIaL adVISoRY RuLINg If you’re using video or digital photos to write an original estimate, you’re now doing so without the support of the Auto Damage Appraiser Licensing Board (ADALB).

At their July 21 meeting in Boston, the ADALB engaged in an in-depth (and often heated) discussion on their May 2014 Advisory Ruling that an appraisal conducted by a licensed appraiser via review of quality video or digital images with documentation meets the requirements of 212 CMR 2.04(1)(d), which states that an appraiser “shall personally inspect the damaged motor vehicle and shall rely primarily on that personal inspection in making that appraisal…” In the 14 months since the public distribution of the Ruling, debate has raged within both the auto body and insurance industries over how a photo or video could be considered a “personal inspection” per the regulations. Recently appointed ADALB member and longtime shop owner Bill Johnson (Pleasant Street Auto Body/Hampshire Towing in South Hadley) openly expressed his grievances with the Advisory Ruling as written, comparing it to allowing a restaurant owner to send in a photo of his or her facility to the Board of Health as an inspection.

“Even if you change the CMR to allow for the documentation by photos, now the appraiser is going to be in violation because if the car doesn’t pass inspection, they’re supposed to scrape the sticker. That’s kind of hard to be done remotely,” he said. “[The] CMR also says the appraiser must show their appraisal license upon request, so that means that [the appraiser] needs to be on-site for that to happen…I personally feel that it’s a bad move, regardless of how it’s

accomplished, whether it’s an Advisory Ruling or a change to the CMRs. To me, a personal inspection is a personal inspection.”

New Board member Lyle Pare (Plymouth Rock Assurance Corporation) argued that using videos and digital photos is a modern and acceptable way to appraise certain automobile damage.

“I look at these digital photos and videos every day,” he said. “If it’s $600, $700, $800 worth of damage, an accurate appraisal can be written by that appraiser. Now, I think that it should be his responsibility as an appraiser that if he can’t do that, he should have that assigned and looked at personally.”

Unsurprisingly, Johnson challenged Pare’s position.

“Would you want to move into a house that the building inspector didn’t inspect, or the plumbing inspector didn’t?” he asked.

“No, I wouldn’t,” Pare answered.

“So we want a consumer to drive around in a damaged vehicle that was not personally inspected?” countered Johnson.

New ADALB member and collision repair industry representative Rick Starbard (Rick’s Auto Collision, Revere) expressed concerns over the use of cell phone pictures to write original appraisals.

“Even what looks like a decent cell phone pic – or any picture, for that matter – doesn’t show what’s behind that bumper cover,” he said, later adding that shops that take photos of cars and send them up to insurers as part of an original appraisal are doing the same thing as running a drive-in appraisal service, which is in violation of regulations.

Attorney Robert Whitney, general counsel for the Division of Insurance, noted that several insurers currently have shop referral programs in place in Massachusetts that utilize the photo/video appraisal option.

“The Commissioner of Insurance has previously determined that plans incorporating the feature, allowing that initial appraisal...to be done remotely by videos, do satisfy the insurance laws as well as the ADALB regulations,” he said.

Despite Whitney’s assurances, Johnson and Starbard argued that certain insurers were encouraging consumers – not licensed appraisers – to take the photos or video and send them to the insurer for an appraisal.

Johnson stated that this practice was “not consumer-friendly” and resulted in “grossly underwritten” estimates.

“Consumers are taking pictures,” added Starbard. “[The consumers] take a picture, they send it in and the thing gets mysteriously written for just over or just under the deductible, and [the consumer] gets a check for $60 and they say, ‘I can’t afford to fix this.’ They go off with a $60 check with a few thousand dollars’ worth of damage under their bumper.”

ADALB member and insurance industry representative Joseph Coyne, Jr. (Home & Auto Appraisal Bureau, Dorchester) also criticized the current system, suggesting that the problem comes as a result of the deregulation of insurance that has impacted the state in recent years.

“Isn’t it funny how these new companies that are coming into the state say it’s okay to take a picture on the initial appraisal and send it in and then send out a short-dollar check to the consumer, but it’s not okay when it

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comes time for subrogation and they don’t want to pay for any of these parts that were allowed on these appraisals because they can’t see the damage on the photo? How can you have your cake and eat it, too?

“We have a responsibility as licensed appraisers to tell the consumer whether their vehicle is safe to drive or not at the time of inspection,” he added. “How can you do that in good faith if you’re not there?”

Johnson made a motion to rescind the Advisory Ruling, and was seconded by Starbard. With Coyne voting in favor of the motion and Pare and ADALB Chairman Gilbert Cox voting against it, the Advisory Ruling was rescinded in a 3-2 decision. Plans by the Department of Insurance to hold a public comment session on changing 212 CMR 2.04(1)(d) were not announced at press time.

Speaking with New England Automotive Report in early August, Starbard reported that the ADALB’s decision has not only resulted in positive feedback from members of the auto body industry, but praise from some insurers that take issue with certain program shops writing and sending appraisals for insurers without a personal inspection.

“It’s a competitive disadvantage for non-program shops, and it flies in the face of [the regulations’] conflictof-interest language,” he says. “Some insurers don’t particularly agree with shops running drive-ins. A lot of my decision was based on conversations I’ve had with people on the insurance side who have spoken to me about the cell phone pics. They’re uploaded, and the insurers are writing just under or over the deductible, and [shops] are going out and writing supplements in the thousands. That either tells you

that the pictures aren’t as clear as people want you to believe they are, or the people who writing these original [estimates] off the pictures are flagrantly defrauding consumers out of what they’re entitled to. I’ve heard of $420 original estimates getting $4,000 supplements.”

Above all, Starbard feels that rescinding the Advisory Ruling helps protect consumers from the potential risks in basing a repair job on a photograph or video. In his mind, a photo of exterior damage could fail to properly identify a host of issues including bent suspension components, possible damage to the cooling system, bent structural components and exhaust systems and damaged wheelhouses where exhaust fumes can enter the passenger compartment.

“Not everything can be settled with a picture,” he says.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

goVeRNoR BaKeR, aaSp/Ma’S StaRBaRd touR tRadItIoNaL BReadS On July 30, former AASP/MA President Rick Starbard was among a group of special guests invited to a private tour of Traditional Breads, an extensive baking facility in Lynn.

Starbard, a three-term member of the Lynn School Committee and a current at-large candidate for the Lynn City Council, attended the morning event alongside Massachusetts Governor Charlie Baker, Lynn Mayor Judith Flanagan Kennedy and various elected officials and memRick Starbard and Governor Charlie bers of the Lynn Area Chamber of Commerce Baker were among the invited guests (LACC). who visited the Traditional Breads A true Lynn success story, Traditional facility.

Breads was founded in 1999 by Fitzroy Alexander, a native of Grenada who moved to the United States as a child. At age 22 with the support of 15 partners, he launched Signature Breads in Chelsea, a company that eventually grew to a staff of 300 and was sold in 1998 to Hazelwood Farms (currently owned by Pillsbury). A year later, he planned and built Traditional Breads in Lynn, quickly becoming a major landmark and employer in the area. According to a July 31 story on itemlive.com, the enterprise “produces upwards of 750,000 slices of bread per day, much of it selling at wholesale prices to different chains and grocery stores, including Stop & Shop and Market Basket.” (More information on Traditional Breads’ history and services is available at traditionalbreads.com.)

Not surprisingly, the tour left a lasting impression on Starbard.

“It was great to see what Fitzroy built,” he said. “He is a nice guy and an example of what can be accomplished in our community.”

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MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

aaSp/Ma paRtICIpateS IN ReguLatoRY LISteNINg SeSSIoN On August 11, AASP/MA participated in a special public comment session hosted by the Massachusetts Division of Insurance to review of all of its existing regulations. According to the DOI website (tinyurl.com/npth838), the goal of these sessions is to determine whether there is a clearly identified need for continuing to retain the particular regulation, including: whether any costs associated with the regulation exceed the benefits that result from the particular regulation;

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whether the regulation exceeds federal requirements or duplicates local requirements; whether less restrictive alternatives to the particular regulation exist; and whether the regulation unduly and adversely affects Massachusetts citizens and consumers or the competitive environment in Massachusetts.

AASP/MA President Molly Brodeur appeared at the session to offer comments on CMR 211 133.00: Standards for the Repair of Damaged Motor Vehicles.

“As written, the current regulations generally remain relevant and important to consumers and the auto body repair industry as a whole. While AASP/MA will be submitting written comments relative to a few areas of the regulations that would better protect consumers if a technical change or clarification were made, the AASP/MA would like to take this opportunity to highlight that both consumers and auto repair businesses in [Massachusetts] would be better served by the current regulation through increased enforcement through the Division. AASP/MA looks forward to being a part of the solution, [and] we’ll work to contribute to this ongoing process of regulatory review.

Please don’t hesitate to reach out to us as a resource, and we thank you for the opportunity to present.”

The complete text of CMR 211 133.00 is available online at tinyurl.com/p4mhorq.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

New adaLB INSuRaNCe MeMBeR SeeKS uNItY BetweeN SHopS, CaRRIeRS As previously reported in New England Automotive Report, Lyle Pare of Plymouth Rock Assurance Corporation is one of three new professionals appointed by Governor Charlie Baker to serve on the Auto Damage Appraiser Licensing Board (ADALB). Pare, who is joined by fellow new appointees Bill Johnson (Pleasant Street Auto Body & Repair/Hampshire Towing, South Hadley) and Rick Starbard (Rick’s Auto Collision, Revere), takes the place of outgoing ADALB member David Krupa.

A Licensed Auto Damage Appraiser for nearly three decades, Pare is a 20year veteran of Plymouth Rock who has been in his current position as unit supervisor since 2000. His past insurance industry experience includes a stint as an appraiser at Hanover Insurance. Pare first became interested in the automotive industry while a student at Chicopee Comprehensive High School.

While a junior and senior, he worked part-time at area body shops as part of the school’s Co-Op program. This led to a six-year stint at Chuck’s Auto Service in Chicopee prior to his first insurance job at Hanover.

Pare believes that the ADALB serves a fundamental purpose in the Commonwealth, especially when it is operated in an efficient and effective fashion.

“Massachusetts has always had good pro-consumer laws and regulations, and the ones applying to auto appraisals are no exception,” he says. “The problem is that nobody has really been held accountable to the regulations and laws. It’s time to enforce them. Some appraisers in Massachusetts need to be brought before the Board and told, ‘This

Lyle Pare (far right) during the ADALB’s June 2 meeting in Boston.

is a regulation; this is a law. If you don’t start writing a fair appraisal based on these laws and regulations, then we’re either going to warn you or suspend your license.’ I think more of that needs to be done.”

Pare hopes to use his new role at the ADALB to encourage greater empathy between collision repairers and insurance carriers.

“I think both sides have to recognize each other’s concerns,” he offers. “Body shops have to sit back and look at what the insurance companies are doing, and why. For example, it’s in the regulations that we have to consider LKQ and aftermarket parts. I think the body shop side of the industry needs to recognize that we need to write for these parts. At the same time, I think the insurance side of the industry has to recognize the fact that we can’t just say, ‘You’re going to use an LKQ part, and if that part doesn’t fit or isn’t of like kind and quality, that’s it; we’re not paying for anything else.’

There just needs to be open dialogue between appraisers and body shops, and we need to understand what each other’s issues and concerns are.”

With the Commonwealth entering a new era with the ADALB, Pare sees the months ahead as an opportunity for genuine and positive change for shops, insurers and the consumers who depend on them both.

“I know it’s never going to be perfect; you’re always going to have adversaries on both sides,” he says. “But I think we can go a long way, and there’s a lot we can do about getting on the same page together.”

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LOCAL NEWS

Remembering Peggy Cahill when peggy Cahill of BC auto Repair in Randolph passed away on July 7, the Massachusetts automotive industry lost not only one of its most passionate members, but an individual whose charitable nature and devotion to helping her community will be felt forever.

From her many years managing BC auto Repair to her award-winning involvement with the Randolph Lions Club, peggy gave her all to making life better for those around her.

“She was the public face of the business,” says peggy’s husband, Bill, who opened the shop in 1987 with her at his side. “She cared about people – not just their cars, but also about their families. the customers who got to know her over the years really enjoyed talking with her. the care factor was just extremely high.”

Former aaSp/Ma executive director peter abdelmaseh had the pleasure of witnessing peggy’s special friendship with consumers during his many visits to the shop.

“You could see how much her customers loved her,” he recalls. “She had a wonderful relationship with them.

Her customers seemed to come in the door focused on her and not so much on their vehicles.”

Friends since 1980, Bill and peggy were dating when BC auto Repair began. Married in 1989, they built the

The Cahills during one of their motorcycle trips with friends.

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Peggy and Bill Cahill during a trip to

Arizona.

shop into one of the most successful mechanical service facilities in the region. Like many couples in business together, they were able to find the right balance between their home and professional lives. “we never took the argument home with us,” Bill says. “we could have adamant disagreements over how to do something here at the shop, but 30 seconds after the decision was made, it was done. we did talk business and shop over dinner, but it never involved disagreements.

It’s the old adage that you never go to bed angry with your spouse. we never left the building angry at our spouse; we never let that interfere with what was going on outside.” although she was key to making BC auto Repair a success, peggy’s greatest strength was her strong participation in charitable efforts. an active member of the Randolph Lions since 1999, she enjoyed a two-year stint as president and served as the secretary/treasurer of the 33K district, a role that required her to be out of the house more than 300 days a year. Bill was continually amazed by his wife’s willingness to go above and beyond to assist others.

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Peggy receiving her Melvin Jones Award from Robert Moore and Jim Roth of the Lions.

“peggy’s mission in life was to do that,” he says.

“Quite often, the Lions are the first people to donate to relief efforts to major disasters around the world.” peggy’s interest in charity work skyrocketed after she was successful in beating breast cancer in the 1990s.

“She made it through that, and the bell went off in her head that every day was a gift and you have to give back,” Bill shares. “None of it was self-serving.”

For her many efforts, peggy was honored as the Lion of the Year for district 33K for the year 2009–2010 and was a proud recipient of a Melvin Jones award, the highest form of recognition given by the organization. away from the Lions, peggy offered immeasurable support to Bill during his stint as present of aaSp Ma/RI. In 2002, he worked with a number of Massachusetts auto body shops in building a stronger collision repair presence in the association. these efforts led the way for today’s aaSp/Ma, and those who were active in those days are quick to credit the Cahills for kickstarting what has become one of the strongest groups of its kind in the nation.

“the Cahills were probably the biggest part of the creation of what is now aaSp/Ma,” offers past aaSp/Ma president Rick Starbard. “away from the association, peggy was an important part of BC auto’s daily operations, and she devoted time to volunteer work through the Lions Club and other organizations in their area. She was Bill’s rock.” “when we founded New England Automotive Report, Bill and peggy Cahill were huge supporters,” adds publisher thomas greco. “More importantly, they became friends. peggy was a wonderful, caring woman who was always by Bill’s side. their partnership in life is one that we all should be so lucky to have.” abdelmaseh credits peggy for being a vital part of BC auto Repair’s longevity in a challenging field.

“She was very informed on industry issues and was a big reason why Bill was able to devote the amount of time he did to the association,” he says. while peggy spent her life helping as many people as she could, no one is more grateful for her love and support than her husband and best friend. “we just liked being in each other’s company,” Bill shares. “It didn’t have to be a lot of conversation or back and forth. Some of our most pleasurable days were motorcycle trips where she sat on the back of the bike and we might have done 200 miles and said only 20 words to each other.”

Memorial contributions may be made in peggy’s memory to the Randolph Lions Club, po Box 306, Randolph, Ma 02368.

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CouRSe SpotLIgHt: HazaRdouS MateRIaLS, peRSoNaL SaFetY & ReFINISH SaFetY

Understanding the many components of working safely in a repair facility can greatly impact business performance. Identifying specific procedures that can prevent injuries, understanding the correct methods of storage and disposal of hazardous materials and wastes (as well as recognizing the proper personal protective equipment) can each play a role in creating a safe and efficient workplace.

After completing this course, you will be able to incorporate basic procedures for safety and preventive measures in a shop environment, understand the importance of labeling and when workplace labeling is required, identify hazardous material exposures, learn storage regulations and more.

CouRSe SpotLIgHt: VeHICLe teCHNoLogY & tReNdS 2015

The automotive industry is constantly introducing new technologies, whether it be for safety, usefulness or environmental protection.

New features and lightweight vehicle materials like aluminum and high-strength steel are driving major changes in vehicle construction as manufactures strive to meet the federal government’s fuel-economy standards. The 2015 Ford F-150 is proof that change is here, and repairers need to be prepared for these changes. This aluminum-intensive vehicle is altering the repair landscape. This course provides an “auto show view” of vehicles that will be commonplace in many repair facilities and delivers information that repair professionals will need to know to be prepared to perform complete, safe and quality repairs.

CourSe SpotLIght: repLACement of SteeL unItIzeD StruCtureS

When replacing parts, how often does your repair facility find itself installing the complete part at the factory seams? There are many elements to replacing parts at factory seams, including considerations for replacing complete parts, partial parts and parts of assemblies using OE procedures. This course will provide students with the opportunity to learn from actual vehicle maker procedures for replacing parts at factory seams and offer solutions when OE procedures for disassembly at factory seams do not exist. Also during this interactive course, students will explore some of the reasons why certain parts need to be completely replaced and factors that impact decisionmaking when separating an assembly.

CourSe SpotLIght: SeCtIonIng of SteeL unItIzeD StruCtureS

Today’s vehicles are being introduced with new technology and construction materials that are more advanced and lighter weight than ever, which means repair procedures from previous-generation vehicle models do not necessarily apply to current models. For repairers, this demands an understanding of proper sectioning techniques and up-to-date knowledge on new vehicle designs that can impact sectioning decisions. Understanding these important considerations can be the difference between a complete and safe repair and possibly compromising passenger safety. This course prepares technicians with the information they need to make proper decisions for sectioning. The student will receive an overview of sectioning that includes classroom activities, props and demonstrations that illustrate detailed information on sectioning preparation and joint types. This course also explains where procedures are found and why general sectioning guidelines no longer apply.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

TRAINING OPPORTUNITIES

in Massachusetts September 10, 2015 Hazardous Materials, Personal Safety & Refinish Safety September 15, 2015 Vehicle Technology & Trends 2015 September 22, 2015 Replacement of Steel Unitized Structures September 29, 2015 Sectioning of Steel Unitized Structures All classes will be held at Fuller Auto Body (Auburn, MA) Visit www.i-car.com for more information.

For more information or to request a specific course, please contact the following I-CAR Committee Chairs: Chairman Josh Fuller: jfuller@fullerautomotive.com Vice Chair of Training Justin Forkuo: justin@290autobody.com Boston Committee Chair Molly Brodeur: molly@albrodeur.com North Shore Committee Chair Gary Brown: gary.b@kwikauto.com South Shore Committee Chair Carl Garcia: carlscollision@aol.com Western MA Committee Chair Andrew Potter: apotter@northamherstmotors.com

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NATIONAL NEWS

by Joel Gausten

aBaC ReSpoNdS to Ct SupReMe CouRt deCISIoN IN $34M CaSe As last month’s issue of New England Automotive Report went to press, the Connecticut Supreme Court issued a verdict reversing the $34.7 million judgment in a muchdiscussed class action case (Artie’s Auto Body et al v. the Hartford Fire Insurance Company) that included the Auto Body Association of Connecticut (ABAC) and hundreds of body shops in the state as plaintiffs. On July 16, the ABAC issued a public statement on the Supreme Court’s decision, a portion of which (with minor editing by New England Automotive Report for clarity) is as follows: The Auto Body Association of Connecticut is deeply disappointed with the recent Supreme Court decision...[which] marks a step backward for consumer safety, quality of repairs and for the rights of independently operated auto repair shops. The decision may also have the unintended consequence of affording greater insurer interference in the repair process, which has historically resulted in demands for faster and cheaper repairs, often at the expense of quality and safety.

The Court’s decision in this case, while disappointing, does not give insurers the right to set Labor Rates or dictate repair decisions. The decision stands for a relatively limited proposition: that The Hartford’s conduct in utilizing its appraisers to negotiate Labor Rates does not violate the unfair trade practices law. It remains unlawful for insurers to artificially suppress market rates or to impose undue conditions on repairers or consumers.

The fight over consumer safety and fair market rates remains very much alive. The Auto Body Association of Connecticut has been in this fight for over 50 years. We have made great advances in compelling greater transparency and accountability. Our resolve to serve as a watchdog and advocate for the industry and for consumer rights, safety and fair market conditions remains as strong as ever.

Naturally, the shockwaves that hit Connecticut are being felt in the Commonwealth. A longtime supporter of the ABAC who has attended many of their meetings over the years, AASP/MA Secretary Gary Cloutier maintains a high opinion of their actions and commitment to the industry despite their recent obstacles.

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“They’re fully committed,” he says. “We go to their meetings, and they have a room full of people. Their whole philosophy with this suit was to stop the bad behavior from occurring. At the end of the day, it’s great to be able to be awarded some money, but I don’t think that was their ulterior motive. They wanted to draw a line in the sand and say, ‘Okay, that’s it. You can’t do this to people anymore’ and basically put the insurance industry in Connecticut on notice.”

Although the Supreme Court decision has put a serious damper on the Connecticut collision industry’s plans to address ongoing issues with insurers, Cloutier believes that the need to fight for better conditions within the field has never been stronger – especially in Massachusetts.

“I’ve never had so much money owed to me by insurance companies as I do right now,” he says. “Back in the day, you’d submit a supplement and pretty much get it back in the same week. Now, you’re waiting weeks on end to get paid on something that you should have already been paid on.”

To illustrate just how desperate payment issues have become for shops in the state, Cloutier says that only six shops remain of the 16 collision repair facilities that were in Westfield when he started his business in 1984. He fears that ongoing Labor Rate suppression will lead to a disastrous future for the auto body field.

“It’s difficult to find good and experienced help as a result of the financial pressures we’re under,” he states. “I have work booked two or three weeks out. We’ve been this busy for well over a year, but what good is it if you can’t pay employees a fair wage to get it done?

“It’s like the Wild West out there,” he adds. “All these insurance companies are doing whatever they want and whatever they can get away with. This system is ready to fall apart and implode, and it’s happening now.”

A history of the ABAC suit (“Closing Arguments Heard in $34M CT Case”) was presented in our March 2015 issue, available free online at tinyurl.com/ntmnc4w.

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2015 AASP/MA Western Chapter Clambake Friday, October 16 5:45pm to 11pm Polish American Club 139 Southwick St., Feeding Hills, MA Featuring a complete chicken dinner with clam chowder and steamers

Tickets are $30 AASP/MA’s Western Chapter is once again sponsoring our Annual Clambake.

We have several sponsorship options available and would welcome multiple sponsors for each category. For more information, please call any Clambake Committee member (listed below) as soon as possible, but certainly no later than October 2.

Sorry, but we cannot guarantee that your sponsorship or raffle prize will be printed in the brochure if we don’t hear from you by September 17.

Sponsorships Available Gold Sponsor ($500) • Company name/logo on all publicity • Company logo on cover of the prize brochure • You banner displayed on the wall • Live check presentation (picture published in New England Automotive Report & Damage Report) • Two complimentary Clambake tickets Silver Sponsor ($300) • Company name listed in the prize brochure • Your banner displayed on the wall • Live expression of gratitude • One complimentary Clambake ticket Bronze Sponsor ($200) • Your banner displayed on the wall • Live expression of gratitude • Company name listed in the prize brochure

Shop Owner Sponsorship Donate a gift and we will draw one name from all the shop owners in attendance. Items in the past have included a masking machine, a laser fax/copier, a spray gun, an insulated coverall, an RMC subscription, I-CAR classes and a basket of supplies.

Or...donate approximately 35 items and present your gift personally to each shop owner.

• Live expression of gratitude • Company name listed in a category in the prize brochure

General Raffle Prize Donate a raffle prize or two and your company will be listed in the prize brochure. In years past, companies have donated items such as gas grills, copy machines, golf bags, apparel, coolers, gift certificates to restaurants and stores, car cleaning kits, etc. All donations will be labeled to announce your support of AASP/MA.

For more information, please contact the 2015 Clambake Committee: Mike Beal: (413) 562-6764

Andre Marcoux: (413) 733-7134

Mike Boucher: (413) 525-4201

Don Vermette: (413) 786-8226

Gary Cloutier: (413) 568-3441

Paul Zollner: (W. Springfield Auto Parts):

Dan Lamontagne: (413) 268-3004

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(413) 335-4666

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AASP/MA MEMBER SHOP SPOTLIGHT

patteRSoN auto BodY

AASP/MA offers shops a chance to come together to create a community, share ideas and work as one in order to help improve the state of the automotive repair industry. As can be read in the Executive Director’s Message on page 10, the association and its Board of Directors have put in a large amount of time to make the field a

better place for business owners and consumers alike. A number of shops have taken notice of these initiatives and joined the association in order to better the industry for themselves and their counterparts.

One such shop who has noticed the efforts of AASP/MA is Patterson Auto Body in Stow, MA.

“I had wanted to join the association for a while, but never had for some reason,” says Manager Frank Patterson III. “I read industry publications like New England Automotive Report all the time, and I’m always interested in what they have to say. I had a mini meeting with [AASP/MA Executive Director] Jillian [Zywien] and [AASP/MA President] Molly [Brodeur] earlier in the year, and they convinced me to join. I’m glad I did; I like the camaraderie aspect. Normally, shops puff their chests out at each other, but for the organization, it’s not competition – it’s about sharing ideas and working through problems together. We need to look at what we can do better as an industry for technicians, customers and shop owners through legislation.”

Patterson Auto Body was opened by Frank Patterson, Jr. in 1992 with $800 borrowed from his children’s bank accounts.

Frank III began at the shop when he was 13 years old, working through his high school years. He started as a helper, washing cars and mowing the grass, gradually progressing to sanding cars, taking them apart and then repairing them. He left the shop when he went to college, but returned shortly after graduating and has been at the business ever since.

“This work is challenging,” he says.

“It’s a tough industry to be in, but that’s one of my favorite things about it. I like being successful in this demanding field. Plus, I love the people aspect – making customers happy, working with technicians, etc.

There’s more to this job than just the repair part. It’s about working with people in and out of the shop.”

Frank III knows that the people-to-people aspect of working in automotive repair isn’t limited strictly to just the day-to-day business of running a shop. It also includes working to better the status of the industry.

“It’s important to work with one another if we ever want things to change in our favor,” he explains. “We have the lowest Labor Rate in the country, and that’s not continued on pg. 58

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

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

*** PLEASE TYPE OR PRINT LEGIBLY *** BUSINESS INFORMATION: Mr.

Mrs.

What benefits motivated you to join AASP of Massachusetts?

Ms.

__________________________________________________________

Business Representative Name: ______________________________

__________________________________________________________

Business Name ____________________________________________

__________________________________________________________

Street Address ________________________________________________________________________________________________________ Street

City

State

Zip

Mailing Address ______________________________________________________________________________________________________ City

Street

Phone Number ( E-mail Address

)____________________________________ Fax Number (

State

Zip

) __________________________________________

________________________________________ Web Site Address ____________________________________________

Enrolled By (Name and Address) ________________________________________________________________________________________ MEMBERSHIP TYPE REPAIRER MEMBER (check one) Collision Repair Shop Mechanical Repair Shop Both, Collision & Mechanical Repair Shops Other Repair Shop

PERSONAL INFORMATION: Name ____________________________________________________ Nickname ________________________________________________ ANNUAL MEMBERSHIP DUES (The AASP membership year is from January 1 to December 31, 2016)

$40/month SUPPLIER/ASSOCIATE MEMBER (check one) Auto Paint/Crash Parts/Auto Parts/Wholesaler Equipment/Tool Supplier Manufacturer/Sales Agent Services (Computers, Software, Vehicle Rental, Other)

$115/quarter

$425/year - BeSt VaLue!

Monthly & Quarterly Dues are Automatic Credit Card Transactions ONLY*

NEW! Political Action Committee (PAC) Donation ...............$_____ Check or Cash

Credit Card:

Visa

MasterCard

Amex

Card Number: __________________________________________ LIST OTHER SPECIALTIES ______________________________________ __________________________________________________________

CID Number: ____________

(3#s on back for Visa, 4 on front for AMEX)

Expiration Date: ________________________________________ Name on Card: __________________________________________

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.

Billing Address of Credit Card: ____________________________ ________________________________________________________ Signature: ______________________________________________ Date: __________________________________________________ *Additional authorization form needed. Please contact AASP/MA Office.

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.

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COVER STORY

by Joel Gausten

Hope at tHe State HouSe: aaSp/Ma Brings Labor Rate Campaign Back to Boston In 2007, the Massachusetts auto body community came together to create legislation to finally bring Labor Rate relief to collision repair businesses throughout the state. Eight years and several incarnations later, AASP/MA’s Labor Rate Bill (HB 805/SB 561) got another shot at the State House on July 14 when AASP/MA representatives Molly Brodeur (president), Kevin Gallerani (treasurer), Rick Starbard (past president) and Gary Cloutier (secretary) joined Springfield-based auto body instructor John Kennedy (Roger L. Putnam Vocational Technical Academy) in offering impassioned testimony in support of the legislation at a hearing by the Joint Committee on Financial Services.

As made clear throughout the industry members’ presentations, the need for a higher Labor Rate in the Commonwealth has never been greater. Currently, Massachusetts repair facilities are compensated at $37 an hour – the lowest rate of any state in the country and more than $11 lower than the national average. The current version of the Labor Rate Bill is calling for insurers to pay body shops at the average rate of the other New England states, which presently stands at $45.44. The rate would then be adjusted every two years with approval from the Massachusetts Division of Insurance.

The first AASP/MA member to offer testimony, Gallerani shared some of the obstacles he faces running his family’s fourth-generation business under the current Labor Rate.

“The cost of living in Massachusetts is among the highest in the nation,” he offered. “The collision repair industry in Massachusetts pays higher labor and overhead costs than most of our counterparts across the country. Why [are] Massachusetts’ Labor Rates [the] lowest in the whole country?

Repair shops are faced with ever-changing regulations and technology. Auto body shops are equipped to repair these vehicles properly; however, they are not compensated appropriately to do so.

“Technological advances in vehicles create a need for reoccurring training through the year,” he continued. “My shop is one of less than 30 I-CAR Gold standard shops in Massachusetts. Whether learning how to reset airbag systems or how to replace new metals in vehicles, every day we are working on safety systems in these vehicles, and you can never know too much. We can’t currently pay upper-level wages for top techs and pay for the top-level training to keep them aware of the always changing technology. Do you want a second-level technician with no current training working on

Massachusetts collision repair industry representatives testified in support of Labor Rate Reform. Left to Right: Molly Brodeur (AASP/MA president; Al Brodeur's Auto Body), Rick Starbard (Rick's Auto Collision), Gary Cloutier (Cloot's Auto Body), John Kennedy (instructor, Roger L. Putnam Vocational Technical Academy) and Kevin Gallerani (Cape Auto Body) 46 September 2015

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the safety systems of your family’s SUV or minivan?”

To illustrate how little change has occurred in the Labor Rate arena over the years, AASP/MA President Molly Brodeur (Al Brodeur’s Auto Body) presented insurance appraisals from the family business from 1986 and 1987.

“In 1986, I was 12 years old, my dad had been in the business for 16 years and I was the oldest of three girls,” she said. “The rate we were being compensated at the time was $28 to $30 an hour. Fast-forward to 2015, I’m 41 years old, I have four children of my own and our rate is only up to $37 an hour. Needless to say, our cost of business has gone up over 400 percent; our Labor Rate has only increased 12 percent. It’s a major problem, and the industry cannot survive at the current rate.”

During his testimony, Starbard stressed that the industry is at a “crisis point” where shops are unable to come up with the money to make an investment in their businesses when they’re paid such low rates.

“We’re faced with ever-changing regulations that we must comply with, and ever-changing vehicle technology that we must equip for,” he shared.

“Last year, the best-selling vehicle in America was the Ford F-150. In 2015...Ford totally revamped the design of that vehicle [to] an all-aluminum structure with a high-strength steel frame. It’s going to cost close to $50,000 for each shop to equip, train and certify [technicians] to repair [that vehicle].”

Sympathizing with this dilemma, Senator Vinny deMacedo (R-Plymouth) noted that his brother left the collision repair industry in the early ‘90s due to the “cost prohibitive” nature of conducting this kind of business under the state’s low rate and the pressures felt by shop owners to cover the costs of the environmental requirements of operating an auto repair facility.

“This is something that really needs to be addressed,” he said. “To ignore it pushes more and more individuals out of an industry that I think we all need.

This is an important part of our economy.”

Offering an educator’s perspective to the discussion, Kennedy noted that although his program develops well-rounded, highly employable repairers with hands-on experience in areas ranging from welding to office management, many of these students end up pursuing higher-paying work in Connecticut.

“It’s disheartening to look those kids in the eye afterwards and say, ‘Well, you’re better off here [in Massachusetts],’” he revealed. “The reality is, financially, they’re not.”

Representing the sole opponent to the Labor Rate Bill to testify at the hearing, John Murphy of the Massachusetts Insurance Federation insisted that the collision industry’s Labor Rate woes come down to supply and demand, as there are too many shops and not enough work to go around. According to Murphy, the Labor Rate stays low as a result.

“This is a market question,” he stated. “Ultimately, there are no cars going unrepaired in Massachusetts because of this alleged issue. If there were, you’d have a serious problem, but apparently there are enough car repair places out there to meet the demand for car repair...If there were a difficulty in getting cars repaired, then the rates would probably go up significantly because you have a supply-and-demand issue.”

Unimpressed by this point of view, Cloutier later countered with a frank rebuttal.

As he told the Committee, “We’re at a tipping point right now; we have been for a while. It’s fantasyland for these insurance industry people to say that everything is great, hunky dory and [consumers] are going to get [their cars] fixed. I can’t find people to come to work for me; it’s impossible...I can barely even afford the training. There are weeks, if not months, that I’ve taken no paycheck to make sure that my people are getting paid...The insurance industry better wake up to the fact that if they don’t do something soon, there’s going to be no one around to fix cars.”

(To further demonstrate the repair industry’s support of the Labor Rate Bill, additional written testimony from the AASP/MA community was submitted to the Committee.)

Clockwise from top left: AASP/MA member Rick Starbard testified in support of Labor Rate legislation.

Auto body instructor John Kennedy (Roger L. Putnam Vocational Technical Academy, Springfield) discussed the need to offer better financial incentives to young hires as a solution to an aging collision repair workforce.

Body shop owner and longtime AASP/MA Board member Gary Cloutier offered frank commentary on the need for Labor Rate relief in the Commonwealth.

Sen. Vinny deMacedo (R - Plymouth) shared a story of a family member who left the auto body industry due to its financial hardships.

AASP/MA representative Kevin Gallerani read a statement detailing the need for improved monetary conditions in his industry.

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COVER STORY Naturally, the emotions on display during the hearing are similar to those felt in shops throughout the Commonwealth. Veteran Massachusetts shop owner and AASP/MA Board member Kevin Kyes (Today’s Collision Repair Centers, Malden and Chelsea) believes that some of the Labor Rate problem stems from the common misconception that auto body pros can adjust their charges as they please the way other trades can.

“When we have a backlog of work — like we experienced this winter and still currently — we are not afforded the option of increasing our prices like my friends who are contractors do all the time,” he tells New England Automotive Report. “These contractors justify doing it by saying they are making up for the slower times. They also have the ability to add inexperienced temporary laborers to their crews and rent equipment as they need it to increase the amount of projects they perform, and therefore increase their profit potential. Meanwhile, we take on more work than we can handle at times so that we don’t lose any regular customers, and our cost of repair increases due to paying our employees time-and-a-half overtime. And when it is not busy, we are not afforded the ability to lower our fixed overhead or raise our prices.”

Ultimately, the Labor Rate Bill is good for Massachusetts because Labor Rates are simply not increasing in a suitable fashion on their own. Although AASP/MA member Tom Ricci (Body & Paint Center, Hudson) says that some insurers have raised their rates slightly in recent years, these increases are far from a proper solution.

“Recently, we received an increase from one insurer – the first in six years,” he says. “But when you break that down, it equated to a 1.4-percent rate increase average each year – while the current rate of inflation is 1.6 percent-plus. I don’t have to be a mathematical genius to figure out we lost money with this new rate increase. Let’s just say I’m not at a vault at my local bank counting my riches.”

Nearly a decade after first taking the Labor Rate Bill to Beacon Hill, AASP/MA is not about to lessen its presence in Boston until financial reform is finally achieved in the auto body industry for the benefit of shops owners and consumers alike.

MASSACHUSETTS

GUEST EDITORIAL Supply and Demand in the MA Collision Repair Industry

By Ray Belsito, Jr. Arnie’s Auto Body (Charlton, MA) AASP/MA Board of Directors The collision repair industry is not a competitive supply-and-demand marketplace. It has none of the characteristics of a competitive market and is essentially the definition of an imperfect market. The dynamics involved in the collision repair marketplace make it unique, and for that reason warrant review.

When we look at the industry in terms of supply and demand in relation to the insurance industry’s involvement, it requires analysis using macroeconomics. Microeconomics has a minor impact on where consumers decide to have their vehicles repaired. Repair shops compete on a daily basis, but differentiation is limited to reputation and price is limited to the consumer’s deductible. With insurance referral and Direct Repair Programs, there is limited control over the dynamics that would be seen in a typical competitive marketplace.

The principles of supply and demand in a competitive macroeconomic environment consider demand, price and market data. If we break these down and compare the collision repair industry to these measures, we see that the collision repair industry is not in a competitive marketplace and therefore does not find equilibrium using a competitive marketplace model – demand, price and data.

In the collision repair industry, demand could be characterized as constant. When we look at the automobile industry, people have very few options when a vehicle requires repair. For the purpose of analyzing the collision repair market, the demand should be assumed to be 100 percent (that is, repairable vehicles).

The price is set in the market. In a third-party payer system, the insurance industry sets the rate for collision repair. In Massachusetts, the collision repair industry has no control over the rates the insurance industry pays in the marketplace. The only options repair shops have in Massachusetts in terms of rate would be to forgo the limited market differentiation they have over local competitors and charge customers above and beyond their deductibles the rate required to run their businesses properly – or, according to recent testimony by the Massachusetts Insurance Federation, refuse to repair vehicles and essentially go out of business.

For consumers, market data is limited. The average person has one accident in a lifetime.

Because of this, the consumer does not have a benchmark to gauge market value. They can use word of mouth, but for the most part, referral and Direct Repair Programs offered by insurers are the only measure the consumer has in making a decision.

Also, because of a lack of demand (one accident in a lifetime), we see the exact opposite of the rising cost seen in the health insurance industry’s third-party payer system. Because there isn’t repetition, there is no way for the consumer to recognize that the rate is inadequate. Plus, we are not dealing with something as personal as a person’s health.

When we look at all these factors, it is easy to see that the collision repair marketplace does not find equilibrium using the competitive market concepts. As with any market, there is equilibrium. The most accurate is the Nash equilibrium.

The Nash equilibrium model is used in economics as an alternative to competitive equilibrium. It is used whenever there is a strategic element to the behavior and the “price-taking” assumption of competitive equilibrium is inappropriate. Using the Nash equilibrium, profit for a firm is measured using revenue minus the cost of producing the output. There is interdependence among firms based on chosen output. In theory, market price is affected if one firm changes its output. The Nash equilibrium occurs when firms are producing the outputs that maximize their own profit given the output of the other firm. Best response dynamics involve firms starting from some arbitrary position (insurance-set rates) and then adjusting output to their best response to the previous output of the other firm.

The collision repair market in Massachusetts is not in equilibrium. Price in the market does not change based on chosen output, and firms can no longer adjust their businesses to maximize profits. There is no function a shop can perform other than to give up any competitive advantage it is has over local competition by charging more money than an insurance company pays, or refusing work. What this represents is equivalent to going out of business. For a business as essential as the collision repair industry, this is no way to run a business.

Because of the market dynamics in Massachusetts, unfortunately oversight in this state is needed. There has been a historic inability from insurers here to listen to the collision repair industry and adjust rates based on shop needs. This is apparent in the disparity between the cost of living in Massachusetts and the low prevailing rate for auto body repairs when compared to other states. Something has to change.

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EQUIPMENT AND TOOLING

by Jacquelyn Bauman

aLuMINuM

aNd BeYoNd: wHat adVaNCed MateRIaLS aRe CoMINg? As anyone who has been paying attention knows, every bit of industry press in the past year has been doused in aluminum. With the introduction of the aluminum-intensive 2015 Ford F-150, many shops have been vigorously preparing with training, tooling and equipment investments or with OEM certifications. Yet, there are still a number of shops that have not taken any steps to ready themselves for this advanced material that is already on the road. Whether it is from a lack of available funds or a disbelief in the impact that this material will actually have on the industry, the unfortunate truth of the matter is that more changes are coming within the next few years.

“The bottom line is, the industry is changing rapidly,” says Kristen Felder, CEO at Collision Hub, in a video from the recent NACE Expo. “We thought we’d seen it all with the Ford F-150, but GM with the revelation of the Cadillac CT6 has shown us that aluminum is only going to amp up, and amp up by all the manufacturers.”

Aluminum, however, is not the only advanced material out there that repairers are going to have to worry about in the next few years. The new BMW 7 series sedan will include carbon fiber elements such as in-roof pillars and door frames. (The Chevrolet Corvette Z06 will also include carbon fiber parts as well.) Ford, Honda, Volkswagen and Toyota, along with other partners and led by the University of Tennessee, have donated $180 million to a five-year project to develop 3D-printed carbon fiber. Audi and BMW, who already use the material, are trying to cut carbon fiber production costs by 90 percent within the next six years.

With OEMs looking for new ways to make cars more fuel-efficient to meet government standards, what else can be expected in the next few years?

With OEMs looking for new ways to make cars more fuel-efficient to meet government standards, what else can be expected in the next few years? According to an article by the Office of Energy Efficiency and Renewable Energy (tinyurl.com/q5ug28q), materials we are familiar with (such as high-strength steel and advanced high-strength steel) only reduce a vehicle’s mass by 10-28 percent. Aluminum and AI matrix composites can reduce the mass by 30-60 percent. While it takes longer for OEMs to manufacture, carbon fiber can provide 50-70 percent mass reduction, as can less-discussed materials like magnesium and titanium.

“It’s going to be an interesting next five years for collision repair,” offers Felder in the Collision Hub video. “All we can do is ensure that you’re training up and that you’re tooling up for the future. Make sure that you’re paying attention to all of the offerings that are out there – looking at not only what’s on the floor today for you to be repairing, but for what’s possibly coming to you in the next couple of years.

“Be sure that when you’re making purchases for equipment, you’re purchasing wisely,” she adds. “OEM repair-certified shops are going to be the wave of the future…You’re going to need to be on those certified programs, and to do that, you need to make sure that the equipment you have in your shop is certified for multiple OEM programs. Make sure you’re purchasing the best equipment.”

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AASP/MA MEMBER SHOP SPOTLIGHT going to change unless we unite and change it ourselves. Insurance companies have politicians in their pocket. We don’t.

We have to work together to get our fair share.”

Despite his dedication to the automotive service trade, Frank III’s life is not all business. When he is away from the shop, he enjoys hunting, fishing and hiking, as well as his motorcycle – a HarleyDavidson Road King. But above all, he

continued from pg. 44 currently enjoys coming home to his new eight-month-old son, Clayton Thomas.

For information on how you can become a member of AASP/MA, please contact Executive Director Jillian Zywien at (617) 574-0741 or email her at jzywien@aaspma.org.

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AUT M TIVE AD INDEX Audi Group ....................................................38 Audi Shrewsbury ..........................................20 Axalta Coating Systems ..................................4 Bald Hill Chrysler Jeep Dodge Ram..............8 Balise Wholesale Parts Express ....................17 Baystate Chrysler/Jeep/Dodge ..................43 Bernardi Group ........................................30-31 Best Chevrolet/Best CDJR..........................IFC BMW Group ..............................................24-25 BMW/Mini of Warwick ................................35 Clay Subaru ....................................................43 Colonial Auto Group ....................................19 Empire Auto Parts............................................9 Enterprise ........................................................11 First Chrysler-Dodge-Jeep-Ram ..................10 First Ford ........................................................10 First Hyundai..................................................10 Ford Group ....................................................32 Future Cure ....................................................44 G&M New England LLC ..............................11 Honda Group..................................................53 Hyundai Group ..............................................37 Imperial Ford ..................................................33 Infiniti of Norwood........................................34 Ira Group....................................................12-13 Kelly Automotive Group............................IBC Kia Group........................................................42 Linder’s, Inc. ..................................................58 Long Automotive Group ..........................OBC Mazda Group..................................................29 Mercedes-Benz of Shrewsbury ....................20 Mopar Group..................................................57 Nissan Group..................................................52 PPG ....................................................................3 Robertsons GMC Truck ................................41 Sarat Ford-Lincoln ..........................................9 Sentry Group ..................................................39 Subaru Group............................................50-51 Tasca Group ......................................................6 Toyota Group..................................................55 Village Auto Group........................................49 VW Group ......................................................56 Wagner BMW of Shrewsbury ......................20 Wagner Kia of Shrewsbury ..........................20 Wellesley Toyota/Scion ................................41

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