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Major Changes at I-CAR
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GEICO’s Day in Court
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MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
AASP/MA Fall Meeting
RECAP: Mike Anderson Helps Shops
THRIVE & SURVIVE
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45,000 sq. ft. warehouse with over 35,000 parts, ready for delivery. Genuine GM Wholesale Parts at competitive aftermarket prices including a complete line of Saturn parts now in stock 10 delivery trucks, ready to bring you the parts you need fast and easy. All free delivery in Metro Boston, Cape Cod, throughout Massachusetts and Rhode Island; shipping by FedEx or UPS. 75 years of experience, making us ready to fill any type of order, large or small.
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Advancing the art of refinishing into the future. NOW THAT’S HIGH PERFORMANCE The ENVIROBASE® High Performance refinish system combines the latest translucent and opaque pigments with an OEM-like spectral gray undercoat system. The result is a finish with a depth of clarity and crispness unrivaled by other paint systems. Another reason why the Envirobase High Performance brand is the leading premium waterborne basecoat system in North America.
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We provide the highest level of customer-friendly service through our knowledgeable and helpful personnel!
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CITY SIDE SUBARU 790 Pleasant Street Belmont, MA. 02478 Phone Number: 617-826-5005 FAX Number: 617-489-0733
COLONIAL FORD 147 Samoset Street Plymouth, MA. 02360 Phone Number: 800-233-8109 FAX Number: 508-830-1658
NORTH END SUBARU 757 Chase Road (Rte. 13) Lunenburg, MA. 01462 Phone Number: 800-548-8887 FAX Number: 978-582-9843
COLONIAL CHRYSLER JEEP DODGE-RAM 24 Coolidge Street (Rte. 62) Hudson, MA. 01749 Phone Number: 978-568-8000 FAX Number: 978-562-1213
COLONIAL FORD OF MARLBOROUGH 428 Maple Street Marlborough, MA. 01752 Phone Number: 888-460-1125 FAX Number: 508-460-3464
COLONIAL SOUTH CHRYSLER JEEP DODGE-RAM 42 State Road (Rte. 6) Dartmouth, MA. 02747 Phone Number: 508-984-1900 FAX Number: 508-996-5801
• Servicing Massachusetts, Rhode Island and New Hampshire • We build our reputation on providing you the best SERVICE!!
COLONIAL BUICK - GMC 66 Galen Street Watertown, MA. 02472 Phone Number: 888-560-5337 FAX Number: 617-489-6875
NORTH END MAZDA 757 Chase Road Lunenburg, MA. 01462 Phone Number: 800-322-1241 FAX Number: 978-582-9841
COLONIAL VOLKSWAGEN COLONIAL SOUTH CHEVROLET 89 Turnpike Road (Rte. 9) 361 State Road (Rte. 6) Westborough, MA. 01581 Dartmouth, MA. 02747 Phone Number: 888-322-6570 Phone Number: 508-996-6266 FAX Number: 508-616-0445 FAX Number: 508-979-1219
COLONIAL VOLKSWAGEN OF MEDFORD 162 Mystic Avenue Medford, MA. 02155 Phone Number: 781-475-5200 FAX Number: 781-391-3506
WELLESLEY VOLKSWAGEN 231 Linden Street Wellesley, MA. 02482 Phone Number: 800-228-8344 FAX Number: 781-237-6024 Contact: Dan Bettencourt / Wholesale Parts Manager
COLONIAL CHEVROLET 171 Great Road Acton, MA. 01720 Phone Number: 800-787-2787 FAX Number: 978-263-8587
COLONIAL WEST CHEVROLET 314 John Fitch Highway Fitchburg, MA. 01420 Phone Number: 978-345-5532 FAX Number: 978-345-1152
COLONIAL CADILLAC 201 Cambridge Road Woburn, MA. 01801 Phone Number: 781-935-7009 FAX Number: 781-933-7728
Place any order online with our parts order form at www.buycolonial.com
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Membership Application 2018 & 2019
AASP-MA P.O. BOX 212 Marlborough, MA 01752 Phone: 617-574-0741 Fax: 781-848-1603 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 # _____________________________ Company’s Official Name: _________________________________________________________________________________________________ Business Physical Address: _______________________________________________________________________________________________ Business Mailing Address (If Different): ________________________________________________________________________________ Telephone Number: ________________________________________________________________________________________________________ Website: ______________________________________________________________________________________________________________________ Additional Social Media: Facebook____________________________________Twitter_________________________________________ DUES STRUCTURE Type of Membership (Collision or Vendor): _________________________________ Annual Dues: $495/12 Months*
BUSINESS CONTACTS PRIMARY CONTACT ACCOUNTS PAYABLE Name: _______________________________________________________ Name: _______________________________________________________ Phone: ______________________________________________________
Phone: ______________________________________________________
Email: _______________________________________________________
Email: _______________________________________________________
CONTACTS WHO WISH TO RECEIVE NEWSLETTERS, EVENT INFORMATION, & LEGISLATIVE UPDATES Name: __________________________________________________ Email: _______________________________________________________ Name: __________________________________________________
Email: _______________________________________________________
Name: __________________________________________________
Email: _______________________________________________________
Name: __________________________________________________
Email: _______________________________________________________
Name: __________________________________________________
Email: _______________________________________________________
PLEASE ENCLOSE PAYMENT WITH YOUR MEMBERSHIP APPLICATION Please Check Here If Paying By Check: ___________ (Please note RS# on memo line of check if Collision Shop) Please Check Here If You Wish To Pay With A Credit Card: _______________ CC #: ______________________________________________________________________
EXP: ________/___________ CID: _________________
Billing Address: ______________________________________________________________________________________________________________ Amount to Charge: ______________________________ Name On Card: _____________________________________________ Signature: ____________________________________________________ I hereby make this application for membership with the Alliance of Automotive Service Providers of MA (AASP/MA) for membership dues for 12 months as provided for in this contract. *Membership dues are for 12 months commencing on your anniversary date.
New England Automotive Report October 2018 5
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October 2018 • Volume 16, No. 10
CONTENTS
DEPARTMENTS
COVER STORY
PRESIDENT’S MESSAGE by Molly Brodeur
36 | AASP/MA Fall Meeting Recap: Mike Anderson Helps Shops Thrive & Survive
8 | Training, Certifications, Equipment - OH MY! EXECUTIVE DIRECTOR’S MESSAGE
By Alana Bonillo
Cover inset photo (L-R): AASP/MA President Molly Brodeur, Mike Anderson of Collision Advice and AASP/MA Executive Director Evangelos “Lucky” Papageorg
by Evangelos “Lucky” Papageorg
10 | Changing the Norm LOCAL NEWS 20 | ADALB Debates LKQ Parts at August Meeting NATIONAL NEWS 24 | SEMA 2018 to Bring High-Level Education to Las Vegas by Alana Bonillo and Joel Gausten 28 | SCRS to Survey DOIs, Develop Healthcare Solutions 30 | State Farm Proposes $250M Settlement in Conspiracy Case 32 | I-CAR Ends Road to Gold, Plans Major Changes by Joel Gausten
OEM Certification Profile 40 | Assured Performance
ALSO THIS ISSUE
LEGAL PERSPECTIVE by James Castleman, Esq.
5 | AASP/MA MEMBERSHIP APPLICATION
44 | The GEICO Case: Godzilla versus the
11 | WHERE’S LUCKY?
Japanese Parts Makers
13 | I-CAR IN MASSACHUSETTS
INDUSTRY ADVICE: ASK MIKE
18 | AASP/MA SPONSORS
48 | What Should Owners Keep in Mind When
50 | ADVERTISER’S INDEX
Selling Their Shops? New England Automotive Report October 2018 7
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PRESIDENT’S MESSAGE
Training, Certifications, Equipment -
OH MY!
MOLLY BRODEUR
With the fourth quarter upon us, the ever-changing landscape of the auto collision repair industry is definitely not slowing down. I-CAR announced a revamp of its training platform for 2019 to include (among other things) stricter requirements for Gold Class shops and the elimination of its Road to Gold program. If you are on the Road to Gold or currently a Gold Class shop, you will need to address these changes in the immediate future. Outside of OEM-specific training, I-CAR remains the collision repair industry’s sole training vehicle. With vehicle technology evolving at a rapid pace, you are doing your customers and your technicians a grave disservice by not engaging in I-CAR training. Taking it a step further, the time has come where you will simply not be able to repair the vehicles of today and tomorrow without a significant investment in training. OEM certified repair networks continue to roll out. GM’s program went live this summer, and Subaru is in queue for launch in the near future. Leaning on OEMs for position statements will soon be a thing of the past. Mark Allen, collision and equipment manager for Audi, stated at NACE that the company will no longer be writing position statements, as the documented Audi repair procedures articulate what constitutes a proper repair. Nissan is tweaking its program as well and will soon be monitoring its certified shops to verify that Nissan repair procedures were accessed for all repairs of their vehicles. Volvo has broadened its certified network to include non-dealer shops, and it already has parts restrictions in place. This is just the tip of the iceberg.10
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Equipment requirements are exploding. While there is some standardization across manufacturers, many have specific tooling. Although automakers like GM worked very hard to use equipment standards when developing their program, there are certain items, like the Wielander and Schill Xpress 800 rivet gun, that are required for certain repairs of the 2016 Cadillac CT6. More than 200 grades of steel are available for car bodies. Fifteen years ago, there were less than 100. As Ron Olsson of Pro Spot revealed at NACE, this poses a great challenge for a standardization across welders. Of course, the age-old question remains: Who is going to pay for all of the training, certifications and equipment? We have been told time and time again that it’s a “cost of doing business and part of [our] overhead.” AASP/MA can help! We will be running programs across the state in the upcoming months and throughout 2019 that will educate and inform you on how to achieve a return on these investments. The time is NOW to invest in your customers, your technicians and your business. You can’t stick your head in the sand and think, “This too shall pass.” This evolution of technology and revolution of OEM certifications and training you are experiencing is just going to grow stronger. AASP/MA doesn’t want to see anyone left behind. JOIN TODAY and start experiencing positive change in your business. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
AASP/MA PRESIDENT MOLLY BRODEUR is the Chief Operating Officer of Al Brodeur’s Auto Body in Marlborough, MA. She can be reached at (508) 485-1082 or molly@albrodeur.com.
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AU M TIVE AUT T TI TIV STAFF
AASP/MA EXECUTIVE COMMITTEE
PUBLISHER
CREATIVE DIRECTOR
Thomas Greco - thomas@grecopublishing.com
Lea Velocci - lea@grecopublishing.com
SALES DIRECTOR
EDITORIAL/CREATIVE COORDINATOR
Alicia Figurelli - alicia@grecopublishing.com
Alana Bonillo - alana@grecopublishing.com
EDITORIAL DIRECTOR
PRODUCTION
Joel Gausten - joel@grecopublishing.com
Donna Greco - donna@grecopublishing.com
TREASURER Kevin Gallerani LEGISLATIVE CHAIR Peter Langone IMMEDIATE PAST PRESIDENT Paul Hendricks
PRESIDENT Molly Brodeur VICE PRESIDENT Adam Ioakim SECRETARY Gary Cloutier
AASP/MA STATEWIDE DIRECTORS PUBLISHED BY: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963
COLLISION DIRECTOR Rob DelGallo
AASP/MA DIRECTORS 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 © 2018 by Thomas Greco Publishing, Inc. Images courtesy of www.istockphoto.com
WWW.AASPMA.ORG
MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
8 October 2018
New England Automotive Report
Matthew Ciaschini Alex Falzone Joshua Fuller
Kevin Kyes Frank Patterson Mike Penacho
AASP/MA ADMINISTRATIVE OFFICE Evangelos “Lucky” Papageorg: AASP/MA Executive Director
Alana Bonillo: AASP/MA Administrative Assistant P.O. Box 212 Marlborough, MA 01752 617-574-0741
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New England Automotive Report October 2018 9
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EXECUTIVE DIRECTOR’S MESSAGE
EVANGELOS “LUCKY” PAPAGEORG
Changing the Norm Many of us are familiar with the stories or fables we were told as children to teach us life’s lessons. These stories had a profound impact on many of us, and we learned how one rare occurrence can lead to many repeat occurrences and an eventual expected norm. There are individuals who also believe that once a privilege is given, it becomes a right. In our industry, we see this occurring time and time again. The end result is the erosion of an industry that has been beaten and held down for far too long. Who has allowed or caused this to happen? I realize that I am not stating anything new here. However, just like the stories of old, maybe we can learn from what has been happening and take some positive action to correct the course. For far too many years, collision shop owners and managers have done what they can to survive in an everchanging environment of technology, rules and regulations without learning how to be better. Some of those efforts have been positive, but others have not been so successful. On the positive side, collision repairers have learned how to streamline the process of repairing vehicles so that delays may be avoided and a thorough, safe repair can be performed in the most expedient method possible. Some of these positive changes include a shift in the intake of vehicles. Shops are moving beyond just bringing everything in on a Monday in hopes of completing by Friday. Today, informed and knowledgeable shops schedule work based on the amount of production hours they are able to
complete in a day and week. A vehicle is tracked daily as it moves through the repair process. A thorough, organized dismantling of a vehicle is critical to a smooth repair process. This includes parts being placed in an orderly fashion on carts for either reuse or “mirroring” when they arrive from suppliers. The “mirroring” process helps to avoid lastminute issues that can arise during the reassembly process. Thinking that the technicians have all the correct parts in stock to complete the repair and then finding out otherwise can add days to the cycle time and heighten the frustration level of your team. The dismantling process – please note I did not say “teardown” – should include the bagging of reusable hardware in separate, clearly labeled bags indicating the area of the vehicle that hardware will need to be installed at the time of reassembly. We have all seen technicians sifting through a pile of hardware for the right clip when it is time to reassemble the vehicle. What a terrible waste of time! Sadly, there are still far too many shops that have not taken steps to get organized and streamline their operations. In addition, many of these same shops do not have a clear
understanding of what it takes to run their business from a financial standpoint on an hourly basis or have a full understanding of their production capabilities. Many have a challenging time distinguishing between the cost of doing business (overhead) and the costs that are indeed repair-related. This information is imperative to know and understand if our industry is ever going to be able to justify a hike in the hourly reimbursement rate by insurers. Unfortunately, it is usually these same shops that hold the rest of this great industry down. They want a hike in the reimbursement rate, but they have not put in the effort to cut down cycle time. Decreasing cycle time does not necessarily mean working harder; it means working more efficiently. If the majority of the collision repairers do not learn this lesson, insurers will continue to suppress the rate of reimbursement and refuse to adequately pay for our expertise in the collision repair process. The insurers will continue to focus on issues such as P-Page procedures, sublet reimbursement, paint and materials and parts selection as ways to curb their expenses. In the process, they will continue to tell us, “We don’t pay for that.” continued on page 13
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New England Automotive Report
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AASP/MA Executive Director Lucky Papageorg is on the move! Read below for his stops this month. For the month of October, Lucky will be spending the first week visiting shops in the Southeastern region.
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In the third week, he’ll be visiting the Western region.
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OCTOBER
2018 MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
For the second week, he will be in the Midstate region.
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During the fourth week, he will be in the Boston/Northeast region. On October 17, Lucky will be holding an AASP/MA Chapter Meeting at the Roger L. Putnam Vocational Technical Academy at 1300 State Street, Springfield, MA. On October 24, he will be holding an AASP/MA Chapter Meeting in the North Shore area. (Location TBD)
Lucky can be reached at (617) 574-0741 or lucky@aaspma.org. NEW ENGLAND’S NEWEST MOPAR DEALER
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Call us and get the right MOPAR parts the FIRST TIME! New England Automotive Report October 2018 11
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12 October 2018
New England Automotive Report
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EXECUTIVE DIRECTOR’S MESSAGE in Massachusetts October 10, 2018 Steel Unitized Structures Technologies & Repair Enterprise Rent-A-Car (Burlington) October 25, 2018 Replacement of Steel Unitized Structures Bay Path Regional Vocational Technical High School (Charlton)
For more information, visit i-car.com
I am sure that many feel that I am beating the insurance company drum and trying to sway you to the “dark side.” That is not the case. I have had the opportunity to walk into hundreds of shops since returning as the executive director of AASP/MA. In doing so, I have been in independent, referral and “program” shops, and I have seen “the good, the bad and the ugly.” I have seen all levels of organization and disorganization. I have seen state-ofthe-art shops and facilities that have not invested in current technology. The truth of the matter is that we, as an industry, still have a long way to go – regardless of how you choose to conduct business and what relationships you have with your customers and/or insurers. With these things in mind, you must be hyper-vigilant and not let the “camel” nose its way too far into your business. When an insurer attempts to skirt existing regulations on items such
as LKQ/recycled parts, time limitations to see/appraise/pay claims and make blatant attempts to steer insureds away from qualified independent collision repair facilities, you need to exercise your rights and the rights of your customers based on the existing regulations and statutes. If you see something wrong, you must say something. If you don’t, it will become the norm. Once something has gone to a perceived “right,” it is more challenging to reverse. AASP/MA is only going to be as strong as its membership. Our goal is to help everyone who is willing to put in the effort to get educated on what it truly takes to run a collision repair facility ethically and professionally. Operating a shop in this fashion will go a long way in justifying a proper rate of reimbursement. All too often when I go into a shop, there is a lot of fingerpointing. Those who do not really understand the cost of doing business continued on page 15
New England Automotive Report October 2018 13
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THEY’RE CALLED “ORIGINAL BMW PARTS” FOR GOOD REASON. FOR UNCOMPROMISING PRECISION AND INCOMPARABLE QUALITY, YOUR BMW CENTER IS YOUR ONE-STOP SHOP FOR EVERYTHING BMW. For Original BMW Parts, contact one of these authorized BMW centers: BMW of West Springfield 1712 Riverdale St. West Springfield, MA 01089 PH: 413-746-1722 FAX: 413-304-9009 bmwwestspringfield.com
BMW of Warwick 1515 Bald Hill Rd. Warwick, RI 02886 PH: 401-821-1510 FAX: 401-823-0530 bmwofwarwick.com
New Country BMW 1 Weston Park Ave. Hartford, CT 06120 PH: 860-240-7881 FAX: 860-240-7873 newcountrybmw.com
BMW of Cape Cod 500 Yarmouth Road Hyannis, MA 02601 PH: 508-815-5500 FAX: 508-790-3551 bmwofcapecod.com
BMW of Stratham 71 Portsmouth Avenue Stratham, NH 03885 PH: 603-772-0000 FAX: 603-772-9436 bmwofstratham.com
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New England Automotive Report
BMW of Sudbury Wholesale Parts 68 Old County Road Sudbury, MA 01776 PH: 800-338-3198 FAX: 508-881-7578 bmwofsudbury.com Tulley BMW of Nashua 147 Daniel Webster Hwy Nashua NH 03060 PH: 603-888-5050 FAX: 603-888-8427 tulleybmw.com
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EXECUTIVE DIRECTOR’S MESSAGE and want to know what the association is doing about a rate increase are the same shops that are actually holding everyone else down. They are also the same shop owners who state, “I am doing what I can to get by.” As an industry, we shouldn’t just do enough to get by; we must continue to strive to put the effort in to be the best at what we do. Some of the finger-pointing I mentioned earlier includes comments like, “It’s all the referral or program shops’ fault” or, “It’s that shop down the street that doesn’t have all the right equipment and can afford to charge less.” Frankly, I feel it’s a bit of each combined, but mostly I think it is the fault of anyone who does not join and support AASP/MA. AASP/MA is diligent in its efforts to advance this industry as a whole – not just certain segments of it. AASP/MA acts to promote change and educate shops and consumers alike, and we also serve as the industry’s watchdog on the legislative, regulatory and consumer-protection fronts. If we don’t all come to the same table and support one another regardless of whether or not we are independent, referral or program shops, we will all suffer. The knowledge we all have combined must be shared so that we can all make informed decisions and have greater understanding between us. As an industry, we are our own worst enemy and have been for a very long time. It is not too late to break what appears to be the norm and make changes that will allow us to hold our heads high once again as a united industry. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
AASP/MA EXECUTIVE DIRECTOR EVANGELOS “LUCKY” PAPAGEORG can be reached at (617) 574-0741 or lucky@aaspma.org
Welcome Anderson Ioakim!
Congratulations to AASP/MA Vice President Adam Ioakim and his wife, Amanda, on the recent birth of their fourth child, Anderson Antonios! He was born on August 4, weighing in at eight pounds, nine ounces. Anderson was named after his grandfather, Antonios Andreas, with a modern twist. He joins his brothers Ashton (five years old), Alex (three years old) and one-year-old Avery.
New England Automotive Report October 2018 15
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It Takes Genuine Honda Collision Repair Parts To Achieve a Genuine Honda Fit. Honda collision repair parts are engineered and manufactured to Honda standards. In the collision-repair business, time is money, and you can’t waste time on parts that almost fit properly. Use Genuine Honda replacement parts. Your reputation depends on it. For Genuine Honda parts, contact these Authorized Honda dealers.
Bernardi Honda 960 Worcester Road Natick, MA 01760 Parts Direct: 800-247-3033 FAX: 508-651-1220 www.bernardihonda.com
Lia Honda of Northampton 293 King Street Northampton, MA 01060 Toll Free: 800-369-7889 Direct: 1-413-586-6043 FAX: 1-413-585-0502 www.liahondanorthampton.com
Honda North 382 Newbury Street Danvers, MA 01923 Toll Free: 800-882-9797 FAX: 978-774-9483 e-mail: eadams@iclautos.com www.hondanorth.com
Kelly Honda 540 Lynnway Rt. 1A Lynn, MA 01905 Parts Direct: 800-779-7466 FAX: 781-595-2898 e-mail: mpsomosjr@kellyauto.com
Honda of Enfield 20 Palomba Drive Enfield, CT 06082 Toll Free: 800-222-6632 FAX: 860-253-5419 www.liahondaofenfield.com
Schaller Honda 1 Veterans Drive New Britain, CT 06051 Toll Free: 800-382-4525 Direct: 860-826-2080 FAX: 860-826-2083 e-mail: jkiniry@schallerauto.com www.schallerauto.com
16 October 2018
New England Automotive Report
Lundgren Honda of Auburn 525 Washington Street Auburn, MA 01501 Toll Free: 800-777-2044 FAX: 508-721-0872 e-mail:pmccarthy@lhonda.com www.lhonda.com
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18 October 2018
For more information or to become a sponsor of AASP/MA please call (617) 574-0741 or email admin@aaspma.org.
New England Automotive Report
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Superior service starts with superior parts. Rely on what Mazda drivers already know-Genuine Mazda parts extend a car's life. Designed specifically for Mazda vehicles Get the right part the first time We're an accurate, trusted resource as close as your phone Give us the opportunity to serve you
Contact these Mazda dealers for all your parts needs: 141 Stevens Street Hyannis, MA Phone: 508-815-5900 Fax: 508-568-9361 www.premiermazda.com
Premier Mazda Cape Cod
1545 New State Highway Route 44 Raynham, MA 02767 Phone: 877-272-8876 Fax: 508-802-4074 wholesale@mastria.com
Mastria Mazda
940 Boston Turnpike Shrewsbury, MA 01545 Phone: 508-281-8173 Fax: 508-845-9465 bmurphy@sentryautogroup.com
Sentry West Mazda Lincoln
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[LOCAL] NEWS
ADALB Debates LKQ Parts at August Meeting At its August 28 meeting at the Division of Insurance in Boston, the Auto Damage Appraiser Licensing Board (ADALB) focused on defining the term “like kind and quality [LKQ]” as compared to the language contained in M.G.L. c. 175, § 2. Additionally, the Board grappled with whether used parts need to be from the same model year or newer and have the same or less mileage. Board member William Johnson suggested the creation of an Advisory Ruling reiterating that a part is of like kind and quality when it is of equal or better condition than the pre-accident part. The discussion was tabled until the next meeting to allow input from automotive recyclers and other interested parties. ADALB Legal Counsel Michael Powers suggested posting the
ADALB Board member William Johnson proposed Advisory Ruling on the ADALB website to invite such comments. Complete coverage of the August 28 ADALB meeting is available in the Members Only section of aaspma.org. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
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508.699.4700 270 East Washington St. North Attleboro, MA 02760
www.firsthyundai.com 20 October 2018
New England Automotive Report
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292 William S. Canning Blvd. Fall River, MA 02721
www.firstfordma.com
508.316.8410 280 East Washington St. North Attleboro, MA 02760
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WE KNOW WHAT YOU’RE THINKING. YOU WANT TO KNOW IF THE PART’S IN STOCK , HOW MUCH IT COSTS, AND WHEN IT’S GONNA GET THERE. We get it. You want the best part for a Toyota, but you’ve got to know when and how much. Well, now you can. In addition to tools that can help you find and order the right VIN-based parts, now you can see if it’s in stock, schedule the delivery, even see your shop’s net price from your participating Toyota Dealer.* Now you’re thinking: “Cool!”
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IRA Toyota of Manchester 33 Auto Center Road Manchester, NH 03103 Toll Free: 800-828-6076 Direct: 603-657-2410 Fax: 603-657-2419
IRA Toyota Danvers 161 Andover Street Danvers, MA 01923 PH: 800-774-8411 ext.1 Direct: 978-739-8306 FAX: 978-739-8098
Bernardi Toyota 1626 Worcester Road Framingham, MA 01702 Parts Direct: 800-248-3033 FAX: 508-879-7895 www.bernarditoyota.com
www.iramotorgroup.com
Wellesley Toyota 216 Worcester Street Wellesley, MA 02481 PH: 800-734-0006 Direct: 781-237-4042 FAX: 781-237-3481 parts@wellesleytoyota.com www.wellesleytoyota.com
stirrell@iramotorgroup.com www.iramotorgroup.com
New England Automotive Report October 2018 21
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Quality Repairs Start With Volvo Genuine Parts.
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22 October 2018
New England Automotive Report
Prime Volvo Cars 1030 Hingham Street Rockland, MA 02370 Parts Direct: 781-927-3520 Fax: 781-927-3592 www.volvocarssouthshore.com
Volvo of Wellesley 962 Worcester Street Wellesley, MA 02482 Parts Direct: 800-247-3033 Fax: 508-651-1220 www.volvoofwellesley.com
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SMALL PARTS, BIG HEARTS.
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BMW OF WARWICK 1515 Bald Hill Road, Warwick, RI 02866 Parts Direct at 401-824-2321 Fax 401-826-1204 ldisaia@penskeautomotive.com Hours: M-F: 8:00-5:00 Sat: 8:00-4:30 European model shown
New England Automotive Report October 2018 23
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[NATIONAL] NEWS By Alana Bonillo and Joel Gausten
to Bring High-Level Education to Las Vegas
The 2018 SEMA Show is just weeks away from attracting automotive professionals from around the world to the Las Vegas Convention Center. Although the annual four-day event will officially begin on October 30, the Convention Center doors will open a day early for the launch of the 2018 Repairer Driven Education (RDE) Series. Presented by the Society of Collision Repair Specialists (SCRS), this year’s RDE schedule includes dozens of seminars and programs designed to provide SEMA attendees with the knowledge and training they need to thrive as business owners and automotive repair professionals. This year’s RDE slate boasts a slew of first-time presenters as well as several past participants. “It’s important to make sure we continue to reinvent the content as well as bring on new faces so we constantly present new thoughts and new ideas for attendees,” explains SCRS Executive Director Aaron Schulenburg. “This keeps things fresh and adds value to their experience year after year.” John Shewbridge of Hunter Engineering Company (“The Importance of ADAS System Resets When Performing Wheel Alignments during the Collision Repair 24 October 2018
New England Automotive Report
Process”), David Willett of Intrepid Direct (“How to Protect Your Business When Facing Increased Complexity and Liability”), David Smith of Auto Damage Experts (“Why You Should Embrace PostRepair Inspections”) and veteran repairer Wade Ebert (“More than Just a Hand Shake: The Professional Administrative [Legal] Documents You Really Need to Operate a Successful Shop”) are just a few of the many industry experts making their RDE debut in 2018. New faces to the RDE experience also include AirPro Diagnostics representatives Michael Quinn (senior vice president of business development) and Chuck Olsen (executive director), who will jointly lead the panel discussion “Understanding Shop Liability in This New Era of Diagnostics, Calibrations and Programming” on October 30. The interactive twohour event will be a continuation of the successful presentation they held at the NORTHEAST® Automotive Services Show earlier this year in New Jersey. The panel will feature representatives from shops, insurers, OEMs, scan tool providers and the legal community, including Texasbased attorney Todd Tracy. “We are trying to bring education to the repair community on their potential liability,” explains Quinn. “We will have a healthy, interactive discussion with attendees, and we expect a strong turnout. We want to make sure shops understand where the line in the sand is. The timing of this is critical because of the massmarket domino effect of advanced driver-assistance system-equipped vehicles entering the fleet every day.”
Eric Newell, market area manager for asTech, will present “Preparing Negotiations” on October 30. In his mind, the RDE course will be a universal discussion focusing on any type of negotiating that automotive professionals may encounter, such as rentals or Labor Rates, and will be worthwhile to industry members who have never negotiated before or even those who consider themselves experts. Attendees will walk away with a seven-step process to gather information and create value for their position when going into negotiations. “Eighty percent of negotiations are done without any underlying methods. In this automotive industry, we are constantly negotiating. It’s very competitive, and we have to negotiate better deals to cut costs and be more competitive.” SEMA’s OEM-centric focus will also include input by industry legend Mike Anderson, who will preside over “OEM Repair Procedure Best Practices” on October 31. Another highly-anticipated event – set for November 1 – is the day-long OEM Collision Repair Technology Summit, which promises to offer cutting-edge insights into the industry’s most pressing discussions. The already exciting RDE schedule will provide even greater value this year thanks to the debut of the IDEAS Collide Showcase, a twohour session set for the final day of SEMA on November 2 that will focus on thought-provoking and innovative ideas and solutions. The event will feature 10 fast-paced presentations designed to stimulate thought, innovation and resolution of business challenges with brash, outspoken and thought-provoking
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concepts from thought leaders both in and out of the industry. Topics will range from evolving technologies to mindset changes that could change how industry members operate their businesses. Other SEMA-related collision industry events include a full schedule of I-CAR classes (available at semashow.com/category/tags/i-car), the Collision Industry Conference (CIC) on October 30 and the RDE Sky Villa After-Party on November 1. For the complete SEMA Repairer Driven Education schedule (plus information on how to register), visit semashow.com/scrs. More information on the Society of Collision Repair Specialists is available at scrs.com. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
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Unsurpassed Quality. Genuine Hyundai Parts. HYUNDAI IS PROUD OF ITS REPUTATION FOR QUALITY AND SERVICE. SO ARE THE DEALERS AND BODY SHOPS WHO RELY ON GENUINE HYUNDAI PARTS. TO MAKE CERTAIN THAT YOU GET THE RIGHT HYUNDAI PART, ASK FOR A HYUNDAI WHOLESALE PARTS SPECIALIST. For Genuine Hyundai parts, contact an Authorized Hyundai Dealer. HERB CHAMBERS HYUNDAI 735 Southbridge Street Auburn, MA 01501 TOLL FREE: 800-767-1898 FAX: 508-832-6026 EMAIL: pobrien@herbchambers.com www.herbchambershyundaiofauburn.com
26 October 2018
New England Automotive Report
GARY ROME HYUNDAI 150 Whiting Farms Road Holyoke, MA 01040 PARTS: 877-960-2444 FAX: 413-536-6349 EMAIL: parts@garyromehyundai.com www.garyromehyundai.com
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[NATIONAL] NEWS
SCRS to Survey DOIs, Develop Healthcare Solutions During the recent Society of Collision Repair Specialists (SCRS) Open Board meeting in Atlanta, GA, Executive Director Aaron Schulenburg announced that SCRS is currently surveying the Departments of Insurance in all 50 states on their role in consumer protection and how they respond to specific complaint items in regard to the automotive repair process. The national association is currently fielding responses from various DOIs for eventual dissemination to the collision industry. SCRS also announced that it has partnered with Decisely, a benefits brokerage and HR services firm, to develop and offer discounted health insurance programs for member shops. “There are many shops out there that can’t or don’t offer [health insurance], and there are many that do and struggle with that because they want to provide quality benefits to employees who are loyal to them,” explained Schulenburg. “The costs are enormous. If you look over the past several years, the rate of increase in health insurance premiums has just skyrocketed.” In order to work with Decisely to develop the most advantageous programs possible, SCRS is encouraging
members to complete the employee information form at scrs.com/census and email it to peter@decisely.com. “If you’re a collision repair business and you would like to see an offer like this within the industry, we could really use your SCRS Executive Director assistance in providing data Aaron Schulenburg that can help SCRS market the best information possible to [health insurance] carriers and put together solutions that leverage the size and scope of SCRS’ membership to the industry businesses’ advantage.” In other news, SCRS is one of many industry entities paying attention to the rise of photo estimating. Recently, the Society attended a webinar on the subject hosted by the Collision Industry Electronic Commerce Association (CIECA) and led by Leslie Redfield, associate vice president of OnSource Online. Schulenburg noted that the continued on page 50
28 October 2018
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New England Automotive Report October 2018 29
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[NATIONAL] NEWS
State Farm Proposes $250M Settlement in Conspiracy Case
The collision repair industry was recently stunned by news that State Farm, the largest auto insurer in the nation, was granted preliminary approval of a $250 million settlement in lieu of going to trial in a federal class action suit (Hale et al. v. State Farm et al.) accusing the company of rigging the Illinois justice system to overturn the $1 billion-plus verdict in the Avery et al. v. State Farm aftermarket parts case of 1999. The settlement was announced September 4, the same day the trial was set to begin in East St. Louis, IL. State Farm was accused of concealing millions in campaign contributions to Illinois Supreme Court Justice Lloyd A. Karmeier prior to the Court reversing the Avery verdict in 2005. The Hale suit sought nearly $10 billion in damages. State Farm claimed the reason behind settling was to put an end to the litigation and prevent a lengthy legal process. A final fairness hearing has been set for December. “After two decades of litigation, the members of the class action suit are gratified State Farm is finally paying the damages that are due,” Robert A. Clifford, lead counsel for plaintiffs in the case and senior partner of the Chicago-based Clifford Law Offices, said in a statement. “This settlement is a victory for the little guy against a national corporation with incredible power, influence and resources.” MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
30 October 2018
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[NATIONAL] NEWS By Joel Gausten
I-CAR Ends Road to Gold, Plans Major Changes
I-CAR CEO/President John Van Alstyne
I-CAR is dramatically changing how it trains the national collision repair industry. Following a nearly five-year comprehensive process of gathering and applying industry insights and feedback about its education and recognition programs, I-CARhas announced a variety of revisions to its curriculum and standards that it plans to implement in the first quarter of 2019. In addition to launching Spanish versions of all core courses, I-CAR’s enhancements for next year include (but are not limited to) the following: I-CAR Automotive Collision Repair Industry Knowledge and Skills Protocol • Updated and industry-backed knowledge and skills protocol that focuses more extensively on specific skills and role performance requirements Enhancements to I-CAR’s recognition programs (Platinum and Gold Class) • Heightened Platinum and Gold Class requirements aligned with industry benchmarks and repair requirements • Optional Aluminum Structural Gold Class recognition for shops that complete I-CAR’s aluminum structural requirements Complete refresh of all core curriculum (263 courses) aligned to the updated Protocol • Incorporating more hands-on live training, shorter course times and more online courses with increased interactivity aimed at promoting less time out of the shop and off the floor for technicians Increased frequency of Welding Training & Certification skill reverification, moving from five years to three years (and no longer requiring course repeat when skills are reverified)
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New England Automotive Report
Automatic recognition for training with other providers that are I-CAR Sustaining Partners through ICAR’s Training Alliance Industry training relative to I-CAR Knowledge and Skills Area published as a companion cross-walk to acknowledge both OEM and Supplier Training Alliance courses approved to Protocol and Alliance qualification criteria New tools for completing, planning and tracking I-CAR training • New learning interfaces, mobile technology and reporting functionality to make completing, tracking and planning I-CAR training much easier for customers An unlimited training subscription for Gold Class shops to protect shops from turnover and encourage building bench strength by better training for all technicians “For nearly 40 years, I-CAR has served as the industry’s trusted partner for knowledge building,” comments I-CAR CEO & President John Van Alstyne. “As the automotive industry is now moving faster than ever before, and with support of our industry stakeholders, we made a conscious decision that it is time for the knowledge and skills bar to rise. At the same time, it is time for I-CAR’s programming to also make a bold step forward. Vehicle repairs today are more challenging than ever and will become increasingly complicated as we move toward the future. I-CAR’s new programs, services and technology have been designed to keep pace with the rate of innovation our industry is seeing.” Gold Class will now be recognized when shops train 100 percent of structural role technicians and 50 percent of all other roles to ProLevel 2 and continue to train those repairers annually to Platinum requirements (collision repair only). Additionally, technicians will complete annual Vehicle Technology-Specific Training courses, and electrical/ diagnostic and mechanical theory courses will be completed at the shop level. Perhaps most significantly, the I-CAR revamp will also include discontinuing the Road to Gold program. A transition period over the course of 2019 will be available for all shops that are Gold Class at the end of 2018. I-CAR plans to work closely with each and every one of its 7,200 Road to Gold and Gold Class shops to guide them through the change. Shops new to I-CAR in 2019 and beyond will need to achieve the minimum ProLevel 2 with the 100 percent /50 percent trained technician scaling for their shop. A detailed transition plan will be announced before SEMA 2018.
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Nick Notte, I-CAR senior vice president of sales and marketing, further explained the organization’s decision to conclude Road to Gold during an August 22 webinar hosted by the Society of Collision Repair Specialists (SCRS). “Road to Gold was not a destination; Road to Gold was a means to get to I-CAR Gold Class. Road to Gold was a 12month journey to get to Gold Class. There are shops that have been Road to Gold shops for multiple years.” Notte added that it is “extremely important” for Road to Gold shops to get to Gold status by the end of this year. “If you are Gold Class by the end of 2018, you’ll be grandfathered in as a Gold Class shop even though you’re not Gold Class to ProLevel2. What you need to do as a grandfathered shop is keep training.” During the webinar, he stressed that shops need to get a handle on fulfilling their Road to Gold requirements as soon as possible. “We have some shops that actually have missed 10, 12, 14 classes. A week before the renewal date, they call and say, ‘Send somebody out here to train me.’ That’s not part of the program.” I-CAR may make exceptions in situations where a requested I-CAR class is canceled due to lack of attendance (an issue most common in rural areas). “We don’t want anybody negatively impacted because we can’t provide the training,” Notte said.
I-CAR’s upcoming advancement follows last year’s rollout of the In-Shop Knowledge Assessment program, which fosters direct dialogue between I-CAR representatives and shop technicians to determine readiness for ProLevel 1. “We actually boil down a three- or four-hour live I-CAR class into a 17-minute conversation. In that time, we cover all of the really salient points of that training. If the technician knows that information, we give them credit for it. They don’t have to take that three or four-hour course.” Grandfathered Gold Class shops will have 12 months following the Assessment to reach ProLevel 2 under I-CAR’s new requirements. As I-CAR moves forward with its restructuring, Notte is hopeful that shops will embrace the new parameters and do all they can to receive the education necessary to survive in an evolving industry. “I believe all shops need training. If you’re not training, you’re kind of standing still and maybe getting passed by.” The SCRS webinar with Nick Notte is available at scrs.com. Additional details regarding the upcoming I-CAR enhancements are available at i-cartraintogain.com. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
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SARAT FORD, WHERE CUSTOMERS BECOME FRIENDS! New England Automotive Report October 2018 33
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GENUINE NISSAN PARTS
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Only Genuine Nissan Parts deliver the fit, reliability, and performance to meet your shop’s collision repair needs. So keep it original, and keep it real with Genuine Nissan Parts. Contact these Nissan dealers for all your parts needs: Kelly Nissan-Infiniti 155 Andover Street, RTE 114 Danvers, MA 01923 Main: 978-774-1000 Direct: 866-883-7093
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Kelly Nissan of Lynnfield 275 Broadway (Route 1) Lynnfield, MA 01940 Toll Free: 1-800-698-9280 Fax: 781-598-8026 E-mail: BSherman@Kellyauto.com
Kelly Nissan of Woburn 95 Cedar Street Woburn, MA 01801 Phone: 781-835-3510 Fax: 781-835-3580 E-mail: jon.martins@kellyauto.com www.kellyauto.com
New England Automotive Report October 2018 35
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[COVER] STORY By Alana Bonillo
MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
Lucky Papageorg (right) does a Ric Flair “Woo!” chant to the audience with Mike Anderson
Fall Meeting Recap: Mike Anderson Helps Shops
THRIVE & SURVIVE Knowledge is key to being successful in the ever-changing collision repair world. With this in mind, AASP/MA held true to its promise to bring informative and high-quality programs to its growing membership by welcoming famed industry consultant Mike Anderson (Collision Advice) for a guest keynote presentation at its recent Fall Meeting at the DoubleTree by Hilton Hotel in Westborough. During “Positioning Yourself in the Collison Industry,” Anderson held the audience’s attention for a solid two hours, guiding them through aspects crucial to surviving in the current industry climate. The former shop owner painted a vivid picture of where the industry is headed, from sharing worthwhile resources and statistics to
explaining what telematics and selfdriving cars will soon mean to the automotive repair profession. Before delving into the heart of his discussion, Anderson was up front with those in the room. “I may not tell you what you want to hear, but I will tell you what you need to hear.” He then challenged attendees to think about the strength of their commitment to the repair field, as there is quite a difference between thriving and just surviving. He demonstrated how to get there by pointing out the things that matter most to consumers, insurers and OEMs. In the case of consumers, the most important factor is trust. “Consumers want trust, empathy and direction. They want to deal with a
Mike Anderson of Collision Advice captivated AASP/MA Fall Event attendees 36 October 2018
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shop they trust. How do you know they trust you? Your online reviews.” Anderson also dropped the bomb that 36 percent of consumers want their business when the shop is closed. Shops that offer online appointment scheduling are getting that work. He also touched on the widely debated rise of photo estimating, stating he agrees with those who are not on board with it. However, he stressed that attendees need to be aware that there are competitors out there who are turning things over more quickly as a result. “Cycle time should be important to you as a business owner. The sooner you get to break even every month, the sooner you get to put money to the bottom line.” He advised that cycle time should be broken down to pre-repair, repair and post-repair, highlighting that scheduling is the key to doing it right. “When a car hits your lot, you need to be touching it within a certain amount of time.” Anderson went over numerous tools that most technicians may not be using to their full potential. For example, he stressed that everyone should have access to Enterprise ARMS (Automated Rental Management System) reporting and should be updating vehicle status multiple times per day. The site also has data shops can use to see how their average labor hours per estimate compare with their
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competitors in their market area. He advised shops to look at this data every day, to see if their shops are charging enough. He also pointed to his own “Who Pays for What?” Survey as a tool to help collision repairers. “Give me 20 minutes of your time once a quarter and let me Attorney James Castleman of help you.” Paster, Rice & Castleman Taking the time to do the Survey pays off, as the results can be used in staff training. Most importantly, shops can use the results as ammunition when faced with a challenge. “If an insurance company tells a consumer you are being unreasonable, you can show this to the consumer and say, ‘Look, 70 percent of others in the US are getting paid for this. I’m not being unreasonable.’” AASP/MA President Molly Brodeur thanked the nearly 100 industry members in attendance for making their businesses a priority and taking some time away to get good information. Executive Director Evangelos “Lucky” Papageorg echoed her sentiments, adding that the association plans to reinstate chapter meetings at local vocational tech schools. These gatherings will set out to provide members with education and inspire the next generation to come into the fold. “We want to improve the industry to such a point that people want to get back in.” Prior to the keynote presentation, attendees got a lesson on liabilities from the legal and insurance sides of the industry. Attorney James Castleman of Paster, Rice & Castleman stressed the importance of knowledge when it comes to the various contracts shops encounter regularly and the many questions that come along with them. He used the John Eagle case in Texas to emphasize the importance of following OEM procedures and understanding the liabilities that could come from not adhering to manufacturers’ guidelines. “Liability really is from cradle to grave from the moment you make that repair to three years later.” How can a shop protect itself from liability? “Know what you are obligated to do and do it,” Castleman said. Peter Marshall of Marshall Insurance Group went over what general liability means to common business entities and who is covered under such policies. Using real examples shop owners deal with day to day, he explained the ins and outs of the most common types of claims involving premises and operations and product liability. Marshall asked the simple question: How much insurance is enough? “Really, what you have to look at is: What the cost is and how much is needed to stay in business? What is [your] potential liability if a client leaves and is involved in a serious accident?” He advised shops to consider an umbrella policy, which is an extension of liability over all their underlying policies. “Figure out what your maximum exposure is, and go with a limit you feel comfortable with.” AASP/MA’s Fall Meeting event also included a table-top trade show featuring corporate sponsors Hoffman Auto Group, Spray Booth Services & Equipment Sales, PPG, ABSAP, Tasca, Sherwin-Williams, Enterprise Rent-A-Car, BASF and Lombard Equipment. More information on Mike Anderson is available at collisionadvice.com. Information on AASP/MA activities and future events is available at aaspma.org. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
New England Automotive Report October 2018 37
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Genuine Replacement Parts For the Road Ahead.
Avoid problems down the road that will cost you time, money and customers. Choose Genuine Subaru Replacement Parts, engineered to fit better today, and perform better tomorrow.
For Genuine Subaru Body Parts, contact an Authorized Subaru Dealer. Long Subaru 7 Sutton Rd., Webster, MA 01570 800-982-2298 Fax: 508-879-1212 tschube@longauto.com 38 October 2018
New England Automotive Report
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Make Quality Your Goal.
REPAIR WITH KIA GENUINE PARTS. Your reputation depends on repairs done right - the first time. Kia Genuine Parts are manufactured to the same exacting standards as original equipment. Don't take chances by using aftermarket parts. Are you willing to risk your reputation and customer satisfaction? A happy customer is your best advertisement. Protect your customer, protect your business Insist on Kia Genuine Parts.
Contact the following Kia dealers for assistance and delivery of your Kia Genuine Parts. Bald Hill Kia 1021 Bald Hill Road Warwick, RI 02886 Parts Direct: (800) 822-3015 www.baldhillkia.com
Gary Rome Kia 809 Enfield Street Enfield, CT 06082 Parts Direct: (888) 349-3995 Fax: (860) 265-2674 www.garyromekia.com
New England Automotive Report October 2018 39
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[OEM CERTIFICATION] PROFILE
This month, we sit down with Assured Performance CEO Scott Biggs to discuss the organization’s role in the OEM certification process. Similar conversations with other automaker certification program representatives will be featured in future issues of New England Automotive Report.
Scott Biggs of Assured Performance Founded in 2004, Assured Performance is a non-profit consumer advocacy organization, legal cooperative and management company created specifically to assist consumers in identifying certified collision repair providers that meet OEM requirements to properly and safely repair vehicles. Assured Performance currently serves as the third-party administrator for body shop certification for several of the industry’s largest automakers. New England Automotive Report: What does Assured Performance do in terms of OEM certification? Which automakers are you currently working with in that capacity? Scott Biggs: Assured Performance is both a certifying entity as a non-profit consumer advocacy organization as well as the administrator for the certification 40 October 2018
New England Automotive Report
programs of several OEMs, including Nissan, Fiat Chrysler [FCA], Ford, Kia and Hyundai. We’re also able to provide certification and inspection services and administrative functions for other entities, such as what we do for Mitchell in their arrangement with General Motors. What is very unique about our approach is that it’s a joint effort to allow shops to go through one consistent process and be qualified and certified on multiple OEM programs. Essentially, the shop only pays for our process once each year – plus any OEM marketing and document fees. They go through one efficient process, eliminating redundancy and extraneous cost. Assured Performance has charged $2,950 for the last several years, while one OEM not working with us might charge more than that for just one program. On top of our fee, there are additional marketing fees and other things that you get for signs and other things, so somebody might pay a few thousand dollars more for all the extras that the car companies give you – but that’s value-added and not the core cost of certification. NEAR: How many shops are currently certified through Assured Performance? SB: We have about 2,800 shops that are currently certified. Our goal is to reach 3,600 by the first quarter of 2019. That’s three to four times more than any other program out there. NEAR: It’s clear that one of Assured Performance’s goals is to present something that’s streamlined to allow shops to hit many birds with one stone in terms of certification. What are some general equipment and training
requirements that fit across the board for your participating shops? SB: There is a published list on our website of all of our tools, equipment, training and facility modifications that are required. Those have been created in concert with the technical people at the car manufacturers that we represent, and that has been carefully vetted through thousands of hours of work by our technical people working with the OEMs’ technical people to establish these core requirements. There are some additions to those requirements. For example, there are specific Ford F-150 aluminum requirements that stack on top of that, and there will be more vehicle- or brand-specific additions for other OEMs as time goes on. NEAR: Speaking of the Ford F-150, that vehicle’s move to aluminum was obviously a game-changer that caused people to race to adapt to different training and other requirements. As your relationships with these OEMs move forward, it’s clear that you will update and change specific requirements for those manufacturers. SB: We do that every year, and we give the shops six months to a year to adopt, adapt to and comply with the new requirements. NEAR: One major area of concern with any certification program is the
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certifying entity’s ability to ensure their shops’ ongoing compliance. SB: Absolutely. The shops with Assured Performance have to comply with all of the requirements each year. We do physical on-site inspections. The inspector actually uses a smart app with GPS location to make sure the inspection was done at that facility. The inspection requires electronic images taken with an app as proof of compliance. There must be physical proof of compliance to every item – no exceptions. Also, I-CAR provides us with proof of a shop’s Gold Class status. NEAR: The industry was recently informed of several changes coming to I-CAR in 2019. How have these planned revisions impacted Assured Performance’s work for the next few months? SB: We have been in lockstep with ICAR’s requirements for Gold Class since the very beginning. In fact, we worked with I-CAR to originally create the Road to Gold program. It was an evolutionary process to get the shops from wherever
they were to where they needed to be. We continue to follow that coordinated approach. Well over half of our shops have already met the Professional Development Program [PDP] ProLevel 2 requirements for Gold Class going forward. I-CAR, Assured Performance and our OEM partners are coordinating our efforts now to make sure that all of our shops are able to migrate to the new requirements in 2019 as I-CAR rolls out their new training program. NEAR: What are some services you offer your shops beyond certification? SB: Our program is unique in ways beyond those I’ve already outlined. Besides just being a consistent program that multiple OEMs are able to leverage, our program has a number of exclusive elements to it. We actually have a business improvement and business development program that all the shops can enroll and participate in. Our objective is not just to get them certified; our objective is to make sure that our shops are best-in-class, top performers in every sense. We provide them with a very powerful tool called ShopOps that
gives them everything from a customer relations management program to programs for quality-control/OEM documentation, HR, process management, data management, business analysis and marketing and customer communication. It’s a very robust system; it’s all the electronic business tools that our certified shops need to raise their game and continue to be highly competitive and achieve bestin-class status. Education and management training has been a part of what I’ve been doing in this industry for 35 years, and it’s an integral part of what we do at Assured Performance. People sometimes make comments like, ‘Assured Performance is just a checkbox program.’ The teeth of our programs are not there to tear the flesh of our shops; the teeth of our programs are there to bite into the future and make sure that our shops own it. More information on Assured Performance is available at assuredperformance.net. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
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Get it right from the source.
Ford and Lincoln Mercury dealers are the one-stop source for all of your collision repair needs. When you need fascias, grilles, headlamps, wheels or any other Ford Motor Company Genuine Part, call your local wholesaling dealership. They’re a great souce for technical and repair information as well. Using Genuine Parts can help your body shop reduce cycle time, improve relationships with insurance companies and satisfy customers. So get everything you need in just one call to your one-stop collision repair resource – your local Ford or Lincoln Mercury Dealership.
Contact these Ford or Lincoln Mercury dealers for all your parts needs: Imperial Ford 6 Uxbridge Road Mendon, MA 01756 Toll Free Parts: 877-272-0332 Toll Free Fax: 877-800-6316 E-mail: johnl@imperialcars.com First Time Customers call John
Sarat Ford Lincoln Mercury 245 Springfield Street Agawam, MA 01001 413-786-0430 Fax: 413-789-3715 www.saratford.com
Sentry Ford Lincoln 4100 Mystic Valley Parkway Medford, MA 02155 Parts: 617-506-6309 Fax: 781-874-9934 E-mail: pnewell@sentryautogroup.com
© 2018, Ford Motor Company 42 October 2018
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[LEGAL] PERSPECTIVE by James A. Castleman, Esq.
The GEICO Case: Godzilla versus the Japanese Parts Makers plaintiffs” (IPPs) who piggybacked onto these lawsuits. They had not actually purchased the parts or the cars, but they had paid reimbursements to the EPPs for replacement/repair of the parts or of the cars that included them. The major IPPs were auto insurers, which had indirectly paid inflated prices for parts when they paid or reimbursed repairers, and vehicle owners for auto repairs, parts replacements and total losses as the result of collision, comprehensive and property damage claims.
In the April 2015 issue of New England Automotive Report, I wrote about antitrust prosecutions of historic proportions that were being brought by the US Department of Justice (DOJ) against multiple Japanese auto parts manufacturers. The basis of the DOJ prosecutions was that the parts manufacturers had engaged in a conspiracy to rig bids and fix prices for parts that they sold to OEM carmakers. The parts manufacturers would agree in advance, among themselves, as to who would get the contract to supply a particular part to a particular OEM carmaker. They would then agree on the price that each of them would bid for the parts contract. As a result of the noncompetitive bidding, the predetermined parts manufacturer would be assured of being awarded the contract. Scores of parts manufacturers fairly openly agreed on how they would split the market share, and they also agreed on fixed prices that would guarantee significant profits for all of them. Billions of dollars were made by the parts manufacturers on inflated prices charged for windshield wipers, wire harnesses, heater cores, hoses, steering wheels, rubber vibration absorbers and numerous other parts that go into the assembly of a car. As a result of the DOJ prosecutions, however, the parts manufacturers then paid billions of dollars in fines and several of their executives went to jail. As the result of the DOJ’s activities (and as discussed in my previous article on the matter), civil class action lawsuits were brought nationwide on behalf of carmakers, car dealers and consumers. These suits claimed billions of dollars in damages for payment of the artificially inflated prices for parts and vehicles that incorporated them. Many of the lawsuits were then consolidated in major multi-district litigation funneled into the US District Court for the Eastern District of Michigan. The carmakers, dealers and consumers are referred to as “end-payor plaintiffs” (EPPs), since they were the endpurchasers of the parts and the assembled vehicles that the parts went into. There were also several “indirect purchaser 44 October 2018
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The GEICO Claims A few months ago, a headline in an automotive law blog caught my eye. It announced that GEICO was independently bringing a massive lawsuit directly against 40 parts manufacturers; the litigation alleged overpayment of auto damage claims as a result of illegally overinflated parts pricing. GEICO had decided to bring the action on its own, separate from the various existing consolidated class actions. Having electronic access to civil pleadings filed in federal courts, I downloaded GEICO’s 230-page complaint and spent the next couple of hours digesting it. I was struck by the creativity of GEICO’s lawyers and also by the monumental damages they were claiming. Not only had they made claims under federal antitrust statutes, but they also made claims under various state antitrust, consumer protection and unfair trade practice statutes. They also made “common law” claims against the parts manufacturers for being unjustly enriched by GEICO’s claim payments in all of the 50 states in which the insurer does business (plus the District of Columbia). Many of the claims carried the possibility of punitive multiple damages and attorneys’ fees being awarded to GEICO. It appeared to me that if the insurer succeeded, many of the parts manufacturers would go bankrupt. I was also struck, however, by the audacity of many of GEICO’s claims. In particular, I questioned whether GEICO had actually suffered any real damages as the result of the parts manufacturers’ actions. After all, insurance premiums are set according to actuarial calculation of expected losses, which are based on anticipated market costs of claim payments. I would expect that GEICO would have been in a position to accurately calculate those anticipated costs. In calculating premiums for auto damage claims, insurers look at expected claim frequency and expected claims costs, including labor reimbursements, paint and materials costs, parts price reimbursements, rental reimbursements, insurer administrative costs and many other factors. But it is not as if the parts manufacturers inflated their prices for only one year. It appeared almost certain to me that auto insurers must have calculated increases in parts reimbursement costs via historical data that was based on already inflated parts prices. Moreover, if
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insurers calculated premiums based on a percentage of anticipated profit (rather than an anticipated fixed profit), they actually may have benefited by inflated parts prices as a result of their premiums being based on the same percentage of those higher amounts. Further, how could GEICO ever accurately calculate what their overpayments actually had been? Even if there had been collusion by the manufacturers in setting parts prices, how could they determine what the price would have been if there had been no collusion? And in paying a totalloss claim, how could they possibly calculate what portion of a car’s actual cash value - or of its salvage value - was attributable to overinflated parts prices? Additionally, I wondered what GEICO would do with the millions (or billions) of dollars they might collect if they won. They had already charged policyholders premiums based on historically inflated parts prices. Would GEICO now reimburse their insureds for premium overpayments based on those inflated prices? I strongly suspect it is more likely that they would pocket the money and pay it to their executives and to their parent company, Berkshire Hathaway, making Warren Buffett even wealthier than he already is. The Plot Thickens As luck would have it, on the very day that I began to write this article, a new blog headline unexpectedly appeared in my morning inbox: “GEICO’s Claims Mostly Crippled in Auto Parts MDL.” I quickly downloaded the new Court Order that had just been issued (and on which the headline had been based). That document that was only 95 pages long. It turned out that the Court had similar thoughts about many of the same problems that I had seen – as well as additional thoughts of its own. In reading the Order, I learned for the first time that, in 2016, GEICO actually had started a prior suit and had piggybacked onto an ongoing class action against 16 parts manufacturers, joining with OEM manufacturers, dealers, consumers and other insurers. Unlike the other plaintiffs, GEICO had opted out of settlement of the class actions and had requested and been allowed to sever its claims from the class so that its suit stood on its own. The recent and more comprehensive lawsuit that I had read had been separately filed, but it just recently had been assigned to the same judge hearing the prior severed claims as a companion case. Last year, before GEICO had brought the new action and before the cases had been consolidated, the parts manufacturer defendants had brought a Motion to Dismiss GEICO’s claims. In its new Order, the Court had not directly thrown out GEICO’s suits, but it had made it incredibly difficult for GEICO to proceed. Among the more important findings of the Court were the following: GEICO’s existing lawsuits against multiple parts manufacturers were not based on a single conspiracy; they were based on separate conspiracies involving each of the named defendants. Accordingly, GEICO would now have to revise its pleadings to bring separate lawsuits against each defendant and try each suit separately. Although the Court’s
Order addressed only the older existing suit, the effect is that GEICO will now have to prosecute 56 separate lawsuits – 16 based on the original suit and 40 based on the newer action. GEICO lacked standing for most of its federal antitrust claims. GEICO’s antitrust claims involved payments it made for the following: “Directly purchasing parts” Claim payments made to repairers for repairs that included parts Reimbursements to insureds for repairs that may have included parts Total loss payments The Court essentially knocked out all of GEICO’s federal antitrust claims with the exception of those in which the insurer directly purchased parts. Any injuries suffered by GEICO for repair payments, insured reimbursements and total losses were too remote and too difficult to value to be viable under federal standards. Further, damages sought for these types of payments would duplicate the damages that the parts manufacturers would be obligated to pay directly to vehicle owners and others in the ongoing separate federal class action suits. Even for claims related to direct payment for parts by GEICO, the Court could not clearly discern what these might be, except for parts purchased for GEICO’s own fleet vehicles. (3) GEICO still might have valid claims under a theory of “subrogation” against the parts manufacturers and for some of the state-specific antitrust, consumer protection and unfair business practices claims - although many of the state claims were also dismissed. However, while the Court didn’t dismiss the surviving claims outright, it ordered GEICO to amend their complaint to plead most of them with significantly more underlying facts. The Court further noted that each surviving state claim would have to separately survive the “standing” requirements and particular applicable laws of each of those states. It also made it clear that it had doubts that GEICO could meet the appropriate standards of proof for many of the surviving claims. Conclusion The prosecutions brought by the DOJ against Japanese parts manufacturers were historic and massive. They opened the door for potential class actions against those manufacturers – with potentially huge damages – and required relatively low levels of proof as a result of the manufacturers already being found guilty “beyond a reasonable doubt” for their criminal antitrust activities. But as demonstrated in the GEICO case, there are still limits as to which parties bring these lawsuits and which parties share in the damages. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
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PHONE: 732-495-7900 FAX: 732-495-7904 E-MAIL: bill@rae1.com www.raeservice.com VISIT US ON FACEBOOK www.facebook.com/ReliableAutomotiveEquipment 46 October 2018
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Hoffman Audi 700 Connecticut Blvd East Hartford, CT 06108 860.282.0191 Fax: 860.290.6355 www.hoffmanauto.com
Mattie Audi 80 William S. Canning Blvd. Fall River, MA 02721 800.678.0914 Fax: 508.730.1283 www.mattieaudi.com
Audi Cape Cod 25 Falmouth Road (at the Hyannis Airport Rotary) Hyannis, MA 02601 PH: 508.815.5600 FAX: 508.568.9410 www.audicapecod.com
New England Automotive Report October 2018 47
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[INDUSTRY] ADVICE
ASK MIKE
Do you have a question for Mike? Contact New England Automotive Report Editorial Director Joel Gausten at joel@grecopublishing.com or (973) 600-9288, and we’ll ask him in a future issue.
What Should Owners Keep in Mind When Selling Their Shops? This month, we “ASK MIKE” to discuss his experiences selling his popular businesses, Wagonwork Collision Centers, in 2010 and offer some advice for shops looking to sell in the future. We at New England Automotive Report hope you find this following exchange useful, and we encourage you to reach out to us if you have a question for Mike on this or any industry-related matter that he can answer in a subsequent issue.
want to sell my business in three years, I would start minimizing some of my personal perks. You want to have a truer idea of what your net profit is, because it might be a multiplier of your net profit. At the end of the day, if I know that my business is going to be sold at a multiplier, I have an accurate reporting of what my net profit is. I want to make sure I really have the financials to support my asking price. You really want to remove the personal perks and improve your bottom line. You also always want to work New England Automotive Report: You on increasing your gross sales. ran two very successful collision You also need to consider if you repair businesses in Virginia. Why did need a broker to help you sell your you make the decision to sell those business. If you think you don’t want to facilities and launch your consulting sell for another seven to 10-15 years, you parents, which in hindsight was a hidden business, Collision Advice? need to do everything you can to grow blessing because my mom passed away sales. Also, try to get as debt-free as about a year later. So it was the right Mike Anderson: There were quite a few possible. decision. things that really contributed to my Every business owner should get decision to sell. There were a lot of myths NEAR: What are some of the major with their corporate attorney and run a out there about why I sold. Some people factors people need to keep if mind in uniform commercial code [UCC] report, thought that insurers blackballed me out which will tell you if there are any liens on they want to implement and follow a of business and stuff like that, and that’s your business. It’s not uncommon for you successful exit plan? not true. When I decided to sell, it wasn’t to go buy a spray booth that has a lease like I was looking to sell; it was just that MA: When I do seminars, I tell everybody, or a loan. Equipment companies will [former WMABA Board member] Chris sometimes put liens against your building ‘Every single thing you do from this day Pohanka [Pohanka Collision Centers, to secure the debt. You may have paid forward should be focused with your later sold to Caliber] and I happened to off a frame machine, but nobody ever got succession plan or end result in mind.’ be talking one day, and he expressed an You need to ask yourself about your the lien removed. You may have a lien interest. It was just the right time. against your business that you’re not succession plan. Number one, if you Because Chris and I were friends, we even aware of. decide that you want to sell one day to an were able to cut a deal pretty quickly. He MSO or something, understand that your A lot of business owners think their intimately knew about my businesses. It businesses are worth a lot more than they sell price is going to be based off a was just the right time at the right place. are. If somebody is buying your business couple of things. An ‘asset sale’ is pretty At the time, I wasn’t married; I didn’t have much your easiest, cleanest way to sell. and you haven’t upgraded your any kids. I was just looking for a change equipment in a long time and don’t have Make sure you know what assets you in my life. Honestly, I was pretty much people who are I-CAR Gold Class, the have, and keep that list up to date with consulting full time before I even sold my depreciation with your accountant. Some business might not be attractive if the businesses. I was only at my businesses people sell at a multiplier of EBITDA buyer needs to purchase and invest in probably three or four days a month. I these things. [earnings before interest, tax, had a really great staff. Probably the most depreciation and amortization]. A lot of Most major MSOs are not looking to important influencer was that it allowed buy the property, only the business. If body shop owners take a lot of personal me to secure my mom and dad’s future. I perks out of their business. If I know I you own the property and it’s part of your also got to spend more time with my business, you need to separate that. I 48 October 2018
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would recommend that they put that into a family trust. It is also important to keep track of all of your leases and contracts. If you subscribe to ALLDATA, Mitchell Estimating or a CCC management system, then you want to see if any of those leases are transferable. This also applies to any contracts you have with a uniform company or a trash company. When you go to sell your business and you get whatever money you do for that business, you’re going to be responsible for all of your receivables and payables. If you’re in a paint contract, you need to make sure that is transferable or if you need to pay that off. You might have received an upfront discount, commonly referred to as a ‘prebate.’ You are obligated to those terms. A lot of times, people tell me that they want to sell to a family member. There are some pros and cons to that. If you’re going to sell the business to your kids and that is going to be part of your retirement or income, understand that family members – even with the best of intentions – can run the business into the ground. You may consider gifting your children the 20 percent down payment they would need to have for the Small Business Administration [SBA] or a bank loan or hold the note on that part, and then get them to get a loan for the other 80 percent. You may also want to consider giving them a credit line to assist with cash flow purposes. That way, you at least have some equity and some cash out to protect you as a parent. If you’re going to hold the note for your kids, I think it’s important that you put into the agreement that they can’t spend over x amount of money without your approval. You should also put in there that you get to look at the financials every quarter so you can make sure that the kids are not getting themselves into trouble. If you’re going to sell to several of your children – like two brothers or a brother and a sister – make sure there’s some type of arbitration clause in there that says if the brother wants to do one thing and the sister wants to do something else, there is going to an arbitrator upon your death to make sure the business doesn’t get paralyzed because two siblings want to go in a different direction. Most MSOs that rent the business from you are going to do a ‘triple-net
lease,’ where they’re going to be responsible for the taxes and insurance. Before you sell your business, make sure you know what the going rate is for rent for a building of your size. If you decide to sell your business and you rent your property, find out if the lease on the property is transferable. A lot of times, people want to sell their businesses to their employees. Most employees are probably never going to save enough to be able to give you the 20-percent down payment that the SBA would require. If your exit plan is to sell to some employees 10 years from now, you should maybe start giving them a bonus every year that you put into an interest-bearing account. This could go towards the down payment they will need. There is something called ‘golden handcuffs,’ which is an agreement you have with your employees that if you ever sell your business, those employees will stay on for at least a year afterwards. That makes your business more valuable to someone else. Let’s say you were going to sell your business for $1 million and you tell an employee, ‘If you keep working for me and managing the store for a year and promise not to leave, you’ll get $100,000.’ That makes your business more attractive to a buyer, because they won’t have employees leaving right away and they have a chance to transfer the business to their type of culture. If you think having a bunch of OEM certifications is going to make your business worth more, that doesn’t always remain true. When you sell that business, the buyer may actually have to get approval from that OEM. That OEM may not choose to renew that certification with that new buyer. If you go to sell your business, there is certain information that potential buyers are going to want to see. They’re going to want to see your tax returns, and they’re going to want to see a list of your employees, how you pay them and how long they’re been with you. Let’s say you give your employees two weeks’ vacation. If you have 20 employees and they have a week they haven’t taken yet when you sell, you have to actually give that money back to the buyer so they have it to honor those vacations. If you offer a 401(k) or a retirement plan to employees and then you sell your
business, sometimes there is a cost to you as an owner to discontinue that plan. Anyone who buys your business is generally going to look for a noncompete agreement that says you won’t open up a shop or go to work for anybody within a certain timeframe – usually one to three years and within a certain mile radius. The more information you can have prepared in advance, the quicker you’re going to get to that finish line to sell your business. It’s very emotional to sell your business. The name ‘Wagonwork’ was built by my dad. If there was one thing that I really wrestled with, it was giving up that name. You always have that concern that if you sell your business and it then gets bad online reviews, it’s still a reflection on you – not that Pohanka did that; I’m just using that as an example. It truly is an emotional decision to sell. My father and I had employees who worked for us 10, 15 years. When you sell, you can sometimes feel like you’re selling out your employees. They’re like your second family, so you’ve got to prepare yourself for that. Of course, this is not everything you need to keep in mind, but it’s a start. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
Mike Anderson is an Accredited Automotive Manager (AAM) and the former owner of Wagonwork Collision Centers, two highly acclaimed shops located in Alexandria, VA. He has served as a member of many industry organizations throughout his career, including the WMABA Board of Directors, the Mitchell Advisory Board, the MOTOR Advisory Board, the ASE Test Review Committee, the National Auto Body Council, the Collision Industry Conference and the Society of Collision Repair Specialists. Additionally, he is a past Virginia SkillsUSA chairman, serves as a facilitator for Axalta Coating Systems’ highly recognized Business Council 20 Groups in both the US and Canada and facilitates numerous courses for Axalta Coating Systems’ Educational Series. He currently offers expert industry consulting via his latest venture, Collision Advice (collisionadvice.com). New England Automotive Report October 2018 49
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[NATIONAL] NEWS continued from page 28
discussion explored how photo estimating has prompted a lower supplement ratio in part because some of the vehicles are not being repaired at the consumer’s choice of shop. “The photo appraisal process may be utilized to mitigate things in the hopes that consumers don’t actually repair their vehicles.” Additionally, Redfield’s presentation acknowledged that writing an estimate from a photo is different from standing in front of a vehicle. “I think that certainly reinforces the concerns we’ve had in the past,” Schulenburg observed. “She identified that [photo estimating] was meant for low-severity claims, and that companies that opt to use it for higher-severity claims could run into issues.” Information on SCRS activities and upcoming events is available at scrs.com. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
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Hyundai Group ......................................26 Imperial Ford..........................................42 Ira Subaru ..............................................13 Ira Toyota of Danvers ..............................12
ADVERTISER’S INDEX
Kelly Automotive Group ........................IBC Kia Group ..............................................39 Linder’s, Inc. ........................................50
Accudraft Paint Booths ........................OBC
Long Automotive Group ............................9
Audi Group ............................................47
Mazda Group ..........................................19
Axalta Coating Systems ............................6
McGovern Chrysler Jeep Dodge Ram ..........11
BASF......................................................34
Mopar Group ..........................................31
Best Chevrolet/Best CDJR ......................IFC
Nissan Group ..........................................35
BMW Group ..................................................14
PPG ........................................................3
BMW/Mini of Warwick ............................23
Reliable Automotive Equipment................46
Colonial Auto Group..................................4
Sarat Ford Lincoln ..................................33
Empire Auto Parts ..................................25
Sentry Group ..........................................29
Enterprise ..............................................28
Sherwin-Williams ..................................27
First Chrysler-Dodge-Jeep-Ram ..............20
Subaru Group ........................................38
First Ford ..............................................20
Tasca Group ............................................17
First Hyundai..........................................20
Toyota Group ..........................................21
Ford Group ............................................42
Volvo Group............................................22
Gary Rome Hyundai ................................30
VW Group ..............................................43
Gary Rome Kia........................................30
Wellesley Toyota/Scion ............................41
Honda Group ..........................................16
Wheel Collision Center ............................25
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