New Jersey Automotive July 2015

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THE OFFICIAL PUBLICATION OF THE ALLIANCE OF AUTOMOTIVE SERVICE PROVIDERS/NEW JERSEY (www.AASPNJ.org) AND THE AUTOMOTIVE RECYCLERS ASSOCIATION OF NEW JERSEY (www.ARANJ.org)

TM

July 2015 $595

www.grecopublishing.com

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P.O. Box 734 Neptune, NJ 07753 EXECUTIVE DIRECTOR Charles Bryant 732-922-8909 / setlit4u@msn.com 2013 - 2015 OFFICERS PRESIDENT Jeff McDowell, Leslie’s Auto Body 732-738-1948 / chacki@aol.com COLLISION CHAIRMAN Dave Laganella, Peters Body and Fender 201-337-1200 / petersbandf@gmail.com MECHANICAL CHAIRMAN Keith Krehel, Krehel Automotive Repair, Inc. 973-546-2828 / krehelauto@aol.com TREASURER Tom Elder, Compact Kars, Inc. 609-259-6373 / compactkars@aol.com SECRETARY Thomas Greco, Thomas Greco Publishing, Inc. 973-667-6922 / thomas@grecopublishing.com BOARD Jerry McNee, Ultimate Collision Repair, Inc. 732-494-1900 / ultimatecollision@att.net

CONTENTS

VOLUME 45, NUMBER 7 | July 2015

8

OUT OF BODY (AND MECHANICAL) EXPERIENCES 10 PRESIDENT’S MESSAGE

LOCAL NEWS

by Jacquelyn Bauman

20 Circle BMW Hosts NJ BMW Car Club of America Gathering

22 Classic Cars, Trucks and Camaraderie at ATHS Annual Antique Truck Show

IN & AROUND AASP/NJ

24 Building Community, Lapping the Competition at AASP/NJ’s 4th Annual “Race Night”

Sam Mikhail, Prestige Auto Body 908-789-2020 / mikhail@goldcar.com

LEGAL PERSPECTIVE

Anthony Sauta, East Coast Auto Body 732-869-9999 / ecabofnj@aol.com

INDUSTRY UPDATES

Ted Rainer, Ocean Bay Auto Body 732-899-7900 / trainer@verizon.net

Randy Scoras, Holmdel Auto Body 732-946-8388 / randy@holmdelautobody.com

Anthony Trama, Bloomfield Auto Body 973-748-2608 / anthony@bloomfieldautobody.com BOARD ALLIED Joe Amato, The Amato Agency 732-530-6740 / joesr@amatoagency.com

Mike Kaufmann, Advantage Dealer Services 973-332-7014 / mkaufmann@advantageds.com PAST PRESIDENT ATTENDING Tom Elder, Compact Kars 609-259-6373 / compactkars@aol.com

14 EXECUTIVE DIRECTOR’S MESSAGE 18 COLLISION CHAIRMAN’S MESSAGE 58 NJA ADVERTISERS’ INDEX

by Mitch Portnoi

26 Practical Legal Advice for Businesses

28 Bullied Beyond Repair: DRP Demands Grow

28 Environmental Regulations Webinar Available for Download 29 Dismissal Requested in Multidistrict Lawsuit

FEATURE

by Joel Gausten

33 The Real Deal on Auto Education: A Conversation with I-CAR CEO John Van Alstyne - Part 2

COVER STORY

by Joel Gausten

40 The Dealers’ New Dilemma: Has PartsTrader Gone Too Far?

NO BRAKES

by Ron Ananian

46 The Great Race (to the Bottom) PUBLISHER Thomas Greco (thomas@grecopublishing.com) DIRECTOR OF SALES Alicia Figurelli (alicia@grecopublishing.com) EDITOR Joel Gausten (tgpjoel@verizon.net)

MANAGING EDITOR Jacquelyn Bauman (jacquelyn@grecopublishing.com) ART DIRECTOR Lea Velocci (lea@grecopublishing.com)

OFFICE MANAGER Donna Greco (donna@grecopublishing.com)

CONTRIBUTING EDITORS

Charles Bryant • Tom Greco • Jeff McDowell Mitch Portnoi • Dave Laganella • Ron Ananian

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

53 AUTOMOTIVE RECYCLERS ASSOCIATION OF NEW JERSEY Legal Update Wharton Insurance Briefs

The Alliance of Automotive Service Providers/New Jersey Joe Amato, Sr. Ron Ananian Jim Bowers Charles Bryant Don Chard Guy Citro Ed Day Dave Demarest

HALL OF FAME

Tom Elder Bob Everett Thomas Greco Rich Johnson Wes Kearney Nick Kostakis Jim Kowalak Joe Lubrano

Michael Lovullo Sam Mikhail Ron Mucklow George Petrask Russ Robson Jerry Russomano George Threlfall

Cynthia Tursi Lee Vetland Paul Vigilant Rich Weber Brian Vesley Glenn Villacari Stan Wilson

NEW JERSEY AUTOMOTIVE is published monthly and is sent to AASP/NJ and ARANJ members free of charge. Subscriptions are $24 per year. NEW JERSEY AUTOMOTIVE is published by Thomas Greco Publishing Inc., 244 Chestnut St., Nutley, NJ 07110. The editorial contents of NEW JERSEY AUTOMOTIVE are copyright © 2015 by Thomas Greco Publishing Inc. and may not be reproduced in any manner, either in whole or in part, without written permission from the publisher and/or editor. Articles in this publication do not necessarily reflect the opinions of Thomas Greco Publishing Inc. Cover and Images courtesy of www.istockphoto.com.

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OUT OF BODY (AND MECHANICAL) EXPERIENCES

The Prom As my son went through high school, I (like any good father) tried to guide him as best as I could, using my own experiences as a reference. I’m happy to say that he accomplished a great deal more than I ever did, and I am very proud of him for that. He made the Honor Roll. (I never came close.) He played varsity football for two years. (I never came close.) And he got to go to the PROM. (Here’s THAT story…)

First of all, I never wanted to go to the prom. Sure, I didn’t have a girlfriend at the time, and I suppose if I had one she probably would have seduced…I mean…convinced me to go, but one of the few things I hate more than getting up early is getting dressed up. That was my main problem with going to the prom.

(Sidebar here: Has anyone noticed that these days they call it “prom” as opposed to “THE prom?” What the hell did “the” do to get kicked out of the conversation???)

Also, I didn’t drink, I didn’t dance, I didn’t do drugs, I hated disco music and I hated most of the people in my

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by THOMAS GRECO, PUBLISHER

grade. (I know what you’re thinking, “No wonder he didn’t have a girlfriend.”) So why would I go to an event that held nothing but misery for me?

But none of that prevented me from getting up in front of my Business Law class and making a speech about proper prom etiquette and the like to my classmates.

Mr. Osbourne was one of the coolest teachers I ever had, and Business Law happened to be the one class during my four high school years that had my closest friends in it. It also happened to have the hottest girls in my grade.

Michelle. Patti. Cetta. Ro. Carol. BOTH Dawns! And man, this was the late ’70s. It was like the Honors Society of halters and tube tops. Problem was, the majority of them were dating guys in their 20s. So when it came to prom time, me being the class wiseass, I decided to get up and preach. I raised my hand and asked Mr. Osbourne if I may have the floor. He sat on his desk with a bemused smile on his face and said, “Be my guest.”

“I know most of you girls already have dates for the

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prom,” I stated. “But it is really wrong for you to take guys who have already graduated instead of senior boys who don’t have anyone to go with. It’s stuck-up and unfair. These guys have only one chance to go to a prom in their lives, and you are all going to ruin it for them by either taking an old man or by not going because you’re ‘too cool’ for them. I personally think that if you aren’t going to the prom with a senior boy and one asks you to go, you should accept, no matter what. It won’t kill you to make some kid’s night and it might even make you feel a little better about yourself. Your boyfriends will get over it.”

With that, I did my best Elvis “thank you very much” and sat down. All the boys were clapping and patting me on the back. All the girls looked at me as if they were going to stab me. Mr. Osbourne stood up and said, “Bravo, Mr. Greco.

Now do you mind if we get back to class?”

I can’t tell you that the speech had any effect. From what I was told, all the hot girls still went with their boyfriends, and I don’t think any of my friends had the nerve to even try and ask one of them after my speech anyway. But my heart was in the right place. That is, until the day after the speech when I was walking to Mass Media on the third floor of the new building and I saw a blonde girl coming straight for me.

That was when my heart suddenly jumped to my throat. Her name was Theresa – she was cute, had an amazing pair of…eyes...and she happened to be in my Business Law class. I wasn’t really friends with her – she was just another

of my classmates who was in and out of my classes over the previous six years.

“Hi Tom,” she said.

“Hey, Theresa. How you doing?” I replied during the first conversation I ever remember having with the girl.

“I heard your speech yesterday, and I thought it was great.”

“Thanks. Don’t know if anyone listened, but I tried.”

“Would you go to the prom with me?” *Gulp* Have you ever seen The Honeymooners? When Alice catches Ralph screwing up and he goes “Humunah Humunah”? That was me. There I was, after making this grand speech and wouldn’t you know, this girl called me out on it.

I wish I could say I did the right thing, but I didn’t. I was a jerk. I was a hypocrite. There was no way for me to explain it to her. No way for me to tell her I really didn’t want to go. It had nothing to do with her. I just hated dressing up and I don’t drink and dance and yadda, yadda, yadda. If I was quick on my feet I would have said, “No, but would you like to go to a movie instead?” But I wasn’t quick on my feet either. I just said, “Sorry, but I don’t want to go,” and ran into class.

I’m sure it was no comfort to Theresa, but I never told my friends that story so it never got around school. It’s a stretch, but that took a tiny bit of guilt away from me. I don’t know if she went to the prom, either. I hope she did. continued on page 56

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PRESIDENT’S MESSAGE

HELP AT YOUR FINGERTIPS

by JEFF MCDOWELL

Between third-party interference, increases in the cost of doing business and all kinds of outside factors impacting your ability to do business, it’s no secret that our industry can be extremely challenging at times. However, it’s important to keep in mind that there

are a number of resources out there – some right under your nose, and many free – that are in place to help make your life as a collision repairer easier, more profitable and ultimately more successful.

Have you heard of the Database

Enhancement Gateway (DEG)? I hope so. Since 2007, the DEG has helped industry professionals receive proper compensation for the work they do, through clarification of the estimating databases used by collision repairers.

To date, over 8,100 inquiries have been submitted by repairers and addressed by the Information Providers.

If you aren’t familiar with the DEG, I recommend you visit degweb.org and look around a bit to see all the positive change that has come about as a result of this initiative. And the next time you see something that’s not right in your estimating database – maybe a “not included” operation that you feel needs to be included, or an inaccurate labor time – submit a Database Inquiry to have your concerns heard by the IPs themselves.

While we’re on the subject of information, you’re basically dead in the water if you’re not up to date on what’s happening in your industry. Reading magazines like New Jersey Automotive cover-to-cover and visiting the trade press websites on a regular basis can go a long way in raising your awareness to changes on the horizon for your business. Repairer Driven News (RDN), the recently introduced industry news site created by the Society of Collision Repair Specialists (SCRS), is also a great source of information.

RDN offers timely and engaging news pieces from around the collision repair world every day at repairerdriven news.com, from legislative activity to announcements from manufacturers on updated procedures and materials, to upcoming industry events and everything in between. And best of all, these in-depth articles can be delivered right to your inbox on a daily, weekly or monthly basis.

You can get a ton out of this industry, but you shouldn’t waste the opportunity to give back as well. Be proactive and stay informed; you’ll be so glad you did.

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EXECUTIVE DIRECTOR’S MESSAGE

When a claim is put in to cover the cost of repairing a vehicle damaged as the result of a collision, there seems to be a different standard or a different set of rules that somehow allow an insurer to pay whatever they want to pay for that damage. Now I know some are going to say that is not true, or that there are rules that govern how insurers must handle insurance claim settlements that have strong language regarding the settlement of auto property damage claims. Just in case anyone reading this article is not aware, I can almost recite those rules.

So yes, I am well aware of the rules and the strong language being referred to. My problem is that those don’t mean much because they are being violated every single day, and no one is doing much about it.

Let’s take a realistic look at these rules and their so-called “strong language.” Let’s start with those that are specific to New Jersey, like the New Jersey Auto Physical Damage Claim Regulations. In this regulation under section 11:3-10.3, adjustment of partial losses, the regulation says: If the insurer intends to exercise its right to inspect, or cause to be inspected by an independent appraiser, damages prior to repair, the insurer shall have seven working days following receipt of notice of loss to inspect the insured’s damaged vehicle, which is available for inspection, at a place and time reasonably convenient to the insured, commence negotiations and make a good faith offer of settlement.

One would think this wording makes it pretty clear that an insurer would have to inspect a damaged

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Maybe We All Need a Reality Check!

vehicle at the body shop where the insured requests to have it repaired.

Not so. Insurers tell insureds every day that they MUST go to a DRP shop to get an estimate on the damage, which usually results in the insured being coerced into getting repairs at that DRP shop. Well, so much for that rule.

Next, if the insurer is not successful in getting the insured to go to the DRP shop and actually does come out to the first shop to inspect the vehicle, the rule says that the insurer is supposed to “commence negotiations and make a good faith offer of settlement.”

However, it is often that the appraiser for the insurer will write his or her estimate for a Labor Rate much lower than the shop’s posted Rate or fail to pay for needed and necessary procedures to repair the vehicle properly.

When the shop objects, he or she is usually told that the Labor Rate is not negotiable; in regard to the needed and necessary procedures, the response is, “We don’t pay for that.”

WOW, do those words ring a bell or what? Well, so much for that strong language requiring the insurer to negotiate in good faith. But wait a minute. The next section of the regulations says: Negotiations must be conducted in good faith, with the basic goal of promptly arriving at an agreed price.

Early in negotiations, the insurer must inform and confirm in writing to the insured or the insured’s designated representative all deductions that will be made from the agreed price, including the amount of applicable deductible.

by CHARLES BRYANT

“We don’t pay for that,” and, “The Labor Rate is not negotiable” do not sound like negotiating, and certainly don’t seem like an act of “good faith” made in an effort with the basic goal of promptly arriving at an agreed price.

In fact, it actually sounds more like dictating what the insurer is going to pay for the repairs. Once again, it is really important that the strong language is in the regulations to keep insurers in line and make sure that the rules protect consumers, right?

The next section of these wonderful rules says: If the insurer inspects the damaged vehicle or causes it to be inspected, the insurer shall promptly upon completing the inspection furnish the insured or the designated representative of the insured with a detailed written estimate of the cost of repairing the damage resulting from the loss, specifying all appropriate deductions.

One insurer that has constantly refused to accept the use of a paint and material cost accounting program (paint and materials calculator) recently announced that they were now accepting its use, but only in the northern part of the state. (Hey, half of the state is better than none at all.) I was so pleased when I heard that because this insurer has refused to accept the cost accounting program’s figures from the start, even after the NJ Department of Banking and Insurance issued a bulletin in 2007 strongly recommending its use. But a few days ago, I received a distressed call from a shop member who told me that an

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EXECUTIVE DIRECTOR’S MESSAGE insurer was accepting the use of a paint and materials calculator, but that the insurer's figures from the program were muchlower than the shop's and the insurer refused to provide the shop with the calculator's printout. Well, if you look at the strong language in

section (c) of the rules above, it is clear in the rules governing fair claim settlements that, “If the insurer inspects the damaged vehicle or causes it to be inspected, the insurer shall promptly, upon completing the inspection, furnish the insured or the designated

representative of the insured with a “detailed written estimate of the cost of repairing the damage.” Hello?? Is anyone home?

OK, let’s cut to the chase. I could sit here and cut and paste sections of the regulations until I am blue in the face, but the reality is, the rules that govern fair claim settlements are a joke. Period. Everyone knows that insurers are violating these regulations on a regular basis. So the next question is, why are they there? A lot of you might not like the answer. I think it’s time that we take a reality check.

Those rules exist to give insureds a warm and fuzzy feeling that there are rules that insurers have to follow during the settlement of claims. There are a lot more rules that actually address every part of the claim settlement process, such as how long an insurer has to inspect a damaged vehicle, where the vehicle must be inspected, how long the insurer has to pay the claim, rules having to do with the payment of replacement vehicles, rules regarding what we refer to as “steering” and so on. However, these rules aren’t worth the paper they are written on.

There is a passage in the front part of the NJ Unfair Claim Settlement Practices Act that says: 11:2-17.1 Purpose N.J.S.A. 17:29B-4(9) and 17B: 30-13.1 prohibit insurers from engaging in unfair claims settlement practices. The purpose of this subchapter is to promote the fair and equitable treatment of claimants by defining certain minimum standards for the settlement of claims which, if violated with such frequency as to indicate a general business practice, would constitute unfair claims settlement practices in the business of insurance.

That one sentence, “which, if violated with such frequency as to indicate a general business practice, would constitute unfair claims settlement practices in the business of insurance”, is the problem and allows insurers to abuse New Jersey consumers on a regular basis and get away with it.

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continued on page 51

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COLLISION CHAIRMAN’S MESSAGE

USING THE TOOLS AT HAND

by DAVE LAGANELLA

The association is constantly working to improve the local industry through a number of different projects and initiatives. One of the more recent

things we have done is partner with National AutoBody Research to bring the AASP/NJ VRS Ray Gunder RealTime Labor Rate Survey to New Jersey

collision repair shops. The Survey is part of their Variable Rate System, which hosts a number of tools aimed at improving various aspects of the industry. The survey is completely free to participate in, and only takes about five minutes to complete. Body shops input their current Labor Rate, as well as what they believe their Labor Rate should be if insurers weren’t involved in the process. The system then calculates what an average Labor Rate for the state of New Jersey should be, which allows us as shops to better negotiate with insurers on proper reimbursement.

Over 140 shops have input their rates, and their contribution has already made a difference. By taking part in this Survey, you are helping improve the overall collision repair trade in New Jersey. If you would like to receive a report from the Survey, there is a $99 monthly fee.

There are so many tools on the website aside from just the Survey that can be helpful in running your business, such as a database that shows what insurers pay for what procedures, effectively ending the insurer excuse of, “We don’t pay for that.”

I highly encourage everyone who owns a shop in New Jersey to explore what the Variable Rate System has to offer. This information can be found at nationalautobodyresearch.com. It is up to us to make a change in our industry. We can’t just complain and then sit back and twiddle our thumbs, waiting for something to change. This is a real tool in the fight against those who want to control our trade and our businesses.

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Circle BMW Hosts NJ BMW Car Club of America Gathering

LOCAL NEWS by Jacquelyn Bauman

On May 19, the New Jersey chapter of the BMW Car Club of America met at Circle BMW in Eatontown for their monthly meeting and an educational

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presentation by Steve Richard, northern US and Canada dealer development manager for Dinan.

This is the third year that Circle BMW has hosted the event, yet despite their success in the past, this year they attempted something a little different.

“In the past, we always had speakers from BMW come in and talk about the cars,” says Pamela Mitchell, director of marketing and communications for Circle BMW. “This year, we decided to mix it up. We chose a speaker from Dinan because of their high-performance products, and because it’s something that appeals to this audience.

“We choose to hold the event in our service area because this gathering of enthusiasts enjoys looking at and under the various cars,” she continues. “The Car Club members are always so gracious and excited to attend our event and likewise, our team looks forward to seeing old

friends and meeting new ones.”

After a brief meeting, during which Marc Goeller (vice president of the NJ chapter of the BMW Car Club of America) and Club President Jeff Caldwell provided guests with updates on the recent and upcoming happenings for the organization, Steve Richard stepped up to the podium for his demonstration.

“For me, it’s all about making things go faster,” Richard explained when going over how he got involved with Dinan.

“For Dinan, it’s about performance without sacrifice, which is actually the company motto.”

Richard went through the company history, beginning with its founding in 1979. He went over some of Dinan’s most significant technological contributions, from the Dinan Turbo M5 (which he referred to as “the world’s first supercar”) to their newer products such as the F10 M5 high flow carbon fiber air intake. He also

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Right: Members of the NJ chapter of BMW Car Club of America met for the event in Circle BMW’s service area, giving them the opportunity to examine a new perspective of BMW vehicles.

Opposite page: Featured speaker Steve Richard of Dinan gave guests a background of Dinan and an update on future endeavors they have in the works.

Opposite page inset, l-r: Northern US and Canadian Dealer Development Manager Steve Richard, Circle BMW Parts Manager Kenneth Vicari, NJ BMW Car Club of America Vice President Marc Goeller, Circle BMW President Tom Defelice, Circle BMW Service Manager Bob Datri

offered insight into Dinan’s potential activities down the road.

“We have a lot of things planned for the future,” he alluded. “I’ve been trying to urge Steve [Dinan] to get into diesel, but we have to start from the ground up for something like that. We can’t take the same background we’ve had, so it’s something that we will have to work with.”

He went on to go over the quality of the Dinan products currently available.

“Yes, our products may be more expensive,” he admitted. “But it’s because we have a higher level of engineering.

You get what you pay for. The top-selling product for us is always the software. People start with the Dinantronics and when they see the value, they end up with the cold air intake and exhaust, the suspension, etc.”

“With Dinan, their technical help over the phone is incredible,” said Circle BMW Parts Manager Kenneth Vicari. “If you have a question, they either know the answer or get the answer to you within a day. Everyone there takes pride in their work, and it really shows.”

After the presentation, attendees were encouraged to look around the shop at the cars on display and to visit the parts department, where they were offered extreme discounts on parts and products.

For more information about Circle BMW, visit circlebmw.com. To learn more about the New Jersey chapter of BMW Car Club of America, visit njbmwcca.org.

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LOCAL NEWS

CLASSIC CARS, TRUCKS AND CAMARADERIE AT ATHS ANNUAL ANTIQUE TRUCK SHOW On June 7, the American Truck Historical Society (ATHS) Metro Jersey Chapter hosted the 25th Anniversary Antique Truck Show in the parking lot of Automatic Switch Co. in Florham Park. The event hosted over 175 vehicles, from classic tow and dump trucks to modern custom cars and everything in between.

The free event brought in hundreds of visitors who enjoyed the beautiful weather to check out the vehicles and partake in the large toy and collectible flea market.

“The great thing about this is the community of people,” says ATHS Executive Board Member and National Secretary George Petrask. “You see most of these people at every antique truck event. You build friendships. You become family.”

ATHS will hold a number of events in the coming months, including shows in Honesdale, PA, Martinsburg, PA and Orange County, NY for the month of July. For a full listing of events and for more information on ATHS Metro Jersey Chapter, visit metrojersey.aths.org. NJA

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IN & AROUND AASP/NJ

AASP/NJ congratulates this year’s winners: 1st Place: Bryan Natale, Pace Collision

2nd Place: Ian Szoboszlay, Cosmo’s Ocean County Auto Wreckers

3rd Place: Brandon LeFevre, Krehel Automotive Repair

A

lthough the industry is constantly divided by competition, camaraderie is necessary to improve the overall atmosphere of the field. It is for this reason that AASP/NJ provides events like the 4th Annual Race Night to create bonds between shops and distributors, and for those who work hard to take time off to relax. The event, held this year on June 11 at Pole Position Raceway in Jersey City, hosted 51 owners and employees from both shops and parts providers. Each rider participated in three races in go karts that reached up to 45 mph!

At the end of the night, participants from Pace Collision, Cosmo’s Ocean County Auto Wreckers and Krehel Automotive Repair took the top three spots. If you’d like to be a part of our next Race Night, contact Jacquelyn@grecopublishing.com with the subject head “Race Night.”

For more information on upcoming association events, please visit aaspnj.org.

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LEGAL PERSPECTIVE by Mitchell Portnoi, Esq.

PRACTICAL LEGAL ADVICE FOR BUSINESSES

What is the best advice that an attorney can give to his or her clients to avoid expensive litigation and potentially devastating court judgments? After much thought, I believe the answer is early intervention. That is, engage legal counsel early on in whatever the process is. If you are contracting for a service or the steady supply of goods, bring the contract to an attorney to review. If you have an employee who is going to be discharged for bad performance, consult an attorney to determine the best way to handle it. If a relationship with a customer is going south and there is a significant sum of money in the balance, talk to your attorney early in the process to potentially escape the possibility of expensive litigation. If you have a manufacturing business and numerous employees, speak to an attorney to discuss the OSHA regulations for serious accidents, potential pitfalls and significant fines. A consult (coupled with the right inspection) can save you thousands of dollars and potentially save lives. Every company with employees should have a Human Resources booklet to describe the expectations and rights of their employees, as well as the responsibilities of the employer. A proper training program for employees also goes a long way toward forming the expectations of all parties.

While litigation is sometimes the only alternative to a thorny legal issue, that is not always the case. Early intervention can potentially avoid litigation and place both parties in a better position than if litigation had ensued and both parties paid substantial fees to an attorney to go through the litigation process.

There are a number of alternative methods of dealing with a seemingly unbreakable loggerhead. A neutral party could arbitrate the matter or a mediation process could be instituted.

Either method has the potential to save the parties significant amounts of money. While the conventional wisdom is that lawyers litigate, the fact of the matter is that a good lawyer will give a client the advice that is best for that particular situation.

It is of the utmost importance that an attorney listens to his/her client to understand the client’s motives and interests. It is only in that way that the client’s best possible outcome can be won. Winning is a relative term. A significant win for a client may be minimizing a very bad decision from the past and getting beyond it. For another client, a win may be settling a matter by paying some money to avoid years in court defending a misunderstanding or a misinterpretation of a contract made years before.

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INDUSTRY UPDATES

“Most DRP shops

are living on cash flow; they’re not really living on profit. When you live on cash flow and that stops, you’re dead.

BULLIED BEYOND REPAIR:

DRP Demands Grow

For decades now, a number of Garden State repair facilities have reported difficulties in maintaining a reasonable profit under their Direct Repair Programs with certain insurers. But if recent reports received by New Jersey Automotive are any indication, the issue has grown from stressful to potentially fatal.

How bad has the DRP situation become for some shops? For years, longtime AASP/NJ Board member Sam Mikhail (Prestige Auto Body, Garwood) has seen more than a few of his fellow shop owners feel the pressure from insurers to cut corners and perform repairs in ways that save those carriers money. According to Mikhail, there are shops in the area willing to accept insurance company estimates that reflect only 20 to 25 percent of the actual damage. Now, some of these facilities are closing their doors for good.

“The [owner] was giving away his work by being a DRP for quite a few companies, just to get the work,” says Mikhail of one particular area shop that just couldn’t survive anymore under these conditions and fell seriously behind on their taxes. “Most DRP shops are living on cash flow; they’re not really living on profit. When you live on cash flow and that stops, you’re dead.”

Nearly 10 years ago, Mikhail walked away from his DRP relationship with State Farm when the company made the switch from Service First to Select Service. A strictly non-DRP shop owner ever since, he often succeeds in using his status as an independent repairer to his advantage.

On May 13, the Pacific Northwest Pollution Prevention Resource Center “Every time a customer comes in here for an essponsored a free webinar, titled "Safer Alternatives in the Auto Repair Industry" timate, we try to educate them on what’s right and how focused on regulations regarding the use of hazardous and toxic chemicals within the car should be repaired,” he explains. “If we don’t the automotive repair sector. Speakers included Larry Garcia, senior environmental get the job, we invite them to come back after their car analyst for Seattle City Light, who spoke on product substitution; Michael Vincent, has been repaired by an insurance company shop so fleet manager for the City of Seattle; Dave Winters, co-owner and CEO of Swedish we can check it for free.”

Automotive; and Scott Lamb, pollution prevention technical assistance provider for Not surprisingly, this often results in new work the Washington Department of Ecology. If you are interested in finding out more for Prestige. about EPA regulations and how to save money, conserve resources and reduce “After we get involved in that, guess where the emissions, the webinar is available for download at pprc.org/index.php/ educational-resources under “webinars.” It is a 50 MB file, so it wil take two to four minutes to download.

”

Environmental Regulations Webinar Available for Download

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“...the plaintiffs have not alleged specific facts relating to each defendant insurer (or a group of defendants) that could illustrate particular wrongdoings.

”

customers go when they have a loss in the future,” he says.

To drive his non-DRP philosophy home to customers, Mikhail displays a cardboard cutout in his office of himself (seen at left) holding a sign that reads, “We Work For YOU, Not The Insurance Companies.”

As frustrating as DRP relationships are for many shops, some repairers insist that it is possible to maintain referral agreements and actually make a profit. For AASP/NJ Board member Jerry McNee (Ultimate Collision Repair, Edison), finding a balance that works comes down to tracking every job down to the last penny – and making sure you get paid every step of the way.

On June 3, Florida Middle District Magistrate Judge Thomas Smith recom“As long as you can professionally explain your charges and justify mended the dismissal of 14 lawsuits filed in October and November 2014 by dozens them, the insurers will pay you every single time,” he says, “I’m getting of auto body repair shops against a number of insurers for charges including steertired of hearing, ‘The poor shop! The poor shop!’ What is the shop doing to ing, price-fixing, unjust enrichment, tortious interference, antitrust violations and unimprove their situation? They think that if they sit back and don’t say anyfair trade practices. Collectively transferred to a Florida District Court to be heard as Multidistrict Litigation (MDL), the particular cases addressed in the report were origithing, insurers are going to feed them more work. But that’s just going to nally filed in New Jersey, Arizona, Michigan, Alabama, California, Illinois, Oregon, burn them out to the point where they don’t have the money to support their Washington, Pennsylvania, Kentucky, Virginia and Missouri, with many of them repbusinesses. They’re not looking at the numbers; they don’t know what the resented by the Eaves Law Firm from Jackson, MS. numbers are. At the end of the day, they’re just really flying blind.”

In his 64-page report, Smith recommends that most charges in the cases be To illustrate his point, McNee points to a recent conversation he had dismissed “without prejudice,” meaning that the plaintiffs would have an opportunity with a shop owner who was charging $15.95 for seam sealer. to amend their complaints. He argues that the plaintiffs have not alleged specific facts “They used at least three tubes of seam sealer on the job,” he recalls. relating to each defendant insurer (or a group of defendants) that could illustrate par“Depending on the product, that could be $70 a tube. If you’re not monitorticular wrongdoings. ing every single dollar in your facility, you’re the problem with the industry.”

“The only specific allegations about most of the defendants in the pending For the last two years, McNee has joined industry consultant John cases are that they are insurers who are licensed to do business in particular states,” Niechwiadowicz (QLC, Inc.) in presenting special job costing seminars at wrote Smith in his report. “[The] plaintiffs’ complaints do not include specific allegations linking each defendant to a price-fixing conspiracy, [nor] have plaintiffs exthe NORTHEAST® Automotive Services Show. In and out of the classroom, plained how the conduct of one defendant in steering a customer away from one he works to convince fellow shop owners to never do a job for thousands plaintiff is related in any way to the conduct of a different defendant in steering a difless than they should just to make an outside party happy. ferent customer away from the same or a different plaintiff.

As he says, “Whose fault is that problem – the insurance companies “This is not to say that I believe plaintiffs must name, for every body shop and for taking full advantage of it, or the shops for not knowing or not standing insurer, a customer who was steered by that particular insurer away from that particuup for what’s right?” lar body shop,” he added. “But, at a minimum, plaintiffs should allege sufficient facts For a growing number of shops in New Jersey, this question might specific to each defendant, or at least each corporate family of defendants, to tie that make all the difference in the world. defendant to the wrongdoing alleged.”

Dismissal Requested in Multidistrict Lawsuit

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The plaintiffs were given until June 24 to amend their complaints. Judge Smith’s full report and recommendations can be read online at tinyurl.com/p8m2v5y.

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FEATURE by Joel Gausten

THE REAL DEAL ON AUTO EDUCATION: A Conversation with I-CAR CEO John Van Alstyne – Part 2 In last month’s issue of New Jersey Automotive, we reached out to I-CAR President and CEO John Van Alstyne for his perspectives on the state of training in today’s collision repair industry. This month, we continue this extensive conversation by focusing on how I-CAR is actively reaching out to repairers and auto manufacturers alike to address what it calls the “technical tsunami” impacting all segments of the industry.

O

bviously, I-CAR’s response to the “technical tsunami” has led you to do something that a lot of people in the industry find very interesting, and that’s build a closer-than-ever relationship with certain vehicle manufacturers in developing course material. How would you characterize where things are with your work with Ford in addressing F-150 training? What can you share as far as where things currently are with Honda?

Over the past five years, I-CAR has worked really hard to develop much closer working relationships with the OEMs. OEMs have been part of the I-CAR world since the founding of the organization back in 1979. There have always been technical exchanges with the OEMs, and those exchanges have found their way into our training curriculum and courses and things of that nature. But over the past five years, we’ve really stepped up our engagement with OEMs to take those relationships to the next level for the benefit of the industry. First of all, we have our Repairability Technical Support program that we launched back in 2014. We have a technical team at our Tech Center in Appleton, WI whose chief role is to act as a liaison between the industry and the OEMs to continuously improve repair information, address opportunities to improve repair procedures and help the industry access the information they need to properly repair vehicles. That project has led to the creation of extensive knowledge materials that are now posted on our website through our Technical Knowledge Portal, or you can access them through rts.i-car.com.

These resources are being made available, and we have very constructive relationships with OEMs to get more information posted on their behalf through that.

Another thing we do is, if the industry has a repair issue, they can call us or submit a Web request and we’ll answer to the best of our abilities. If we don’t have the answers, we will reach out to OEMs to get the answers to that, and then follow back up to the shops. We call that ‘Ask I-CAR.’ We also formed what we call OEM ISACs [Industry Segment Advisory Councils]; that’s where we get the OEMs together and we talk about common issues that cut across the OEMs in a non-competitive way. We have all that work that’s running, which we’ve launched over the past year, but I would say that we’re also more engaged with the OEMs for their overall training requirements, and many OEMs are also interested in developing repair networks.

We have a constructive working relationship with Ford. They were working on the development of their new vehicle several years ago, and they reached out to I-CAR because of our relationship [with the industry], and asked us to help them with the development of training and channels for the dissemination of knowledge to the industry in preparation for the launch of the F-150. We worked with Ford through the final stages of their product development process so that we would have training and Ford would have the New Jersey Automotive | July 2015 | 33

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FEATURE by Joel Gausten proper repair information for the industry.

In the late spring [of 2014], we launched our F-150 training programs. One is what we call FOR06, which is what you need to know to repair a 2015 F-150. Secondly, we adapted our standard aluminum welding training and certification program to be more Ford-specific. We’ve been about a year into that, and that’s been a great success. The F-150 course was our most popular in 2014, so a lot of folks took that training. We did a ton of aluminum training last year; some of that was driven by the F-150 program. I think that was a good thing for I-CAR and a good thing for the industry. I think it accomplished the goal that Ford wanted, which was to prepare the industry to be ready to support these vehicles when they were launched.

With Honda, we’ve been working with them for several years. If you go to our RTS Technical Knowledge Portal, you would find probably more information from Honda there than from any other OEM. We work very strongly with them on the technical side. They have a repair network program called ProFirst, and Gold Class has been part of that requirement for several years now. Honda has just enhanced that ProFirst program to include further elements of shop certification requirements, and Gold Class is still the training element to that program.

For the last several years, we had a course called HON01, which was kind of an overview course for Honda. To be in the ProFirst network, you have to take Honda-specific courses. Honda worked on a series of new courses, and all of the courses are in online format. They’ve developed these courses and are working exclusively with I-CAR for their distribution to the industry. We’ve launched a couple already, and we’re expecting to launch a few more. The courses are part of Honda’s ProFirst requirement, but they’re generally available to the entire industry through distribution from I-CAR. It has been a really great, productive relationship with Honda, and we’re looking to replicate those kinds of relationship with all OEMs. That’s what we’re working towards.

I-CAR is now more than 35 years into its existence. From your perspective, what do you consider to be some of the organization’s key accomplishments, and where might there be some room for improvement that I-CAR will be focusing on moving ahead?

I think there’s been a number of accomplishments along the way. First of all, having 17 percent of the industry seriously engaged with I-CAR at this point is a worthy accomplishment given the lack of industry-wide standards or

requirements for training. I think that we can be proud of the work done with the Professional Development Program curriculum; I think that was a major step forward for I-CAR and the industry to make training more meaningful and relevant. I would suggest that our launch of the Repairability Technical Support program in 2014 was another milestone for I-CAR in terms of our commitment to help our industry repair vehicles correctly.

I would say that looking into the future, there are still lots of opportunities for our industry and I-CAR. We’d like to make more progress towards getting that 66 percent engaged in training, whether it’s with I-CAR or others. We see some opportunities to provide new curriculum and courses that ICAR has not traditionally provided. We’re working on strategies; we have some work going on in the product development area.

You can look forward to some new course offerings in some new areas that I-CAR has not addressed in the past. At the end of the day, we’re just looking for our industry to be focused on the consumer and focused on complete, safe and quality repairs that are also affordable and profitable.

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Note: Portions of this interview were edited for space and clarity.

As CEO and president of I-CAR, John Van Alstyne is leading I-CAR into the future as the automotive collision repair industry’s standard for technical-focused education, knowledge and solutions that directly contribute to complete, safe and quality repairs for the ultimate benefit of the consumer. Prior to I-CAR, Van Alstyne spent 20 years in the OEM and vehicle technology sector of the automotive industry. Most recently, he was with Fisher Coachworks, a Detroit-based electric vehicle start-up.

Earlier, he was with Ricardo, a top global powertrain and vehicle engineering consulting firm, and Freudenberg-NOK, a global Tier 1 OEM parts manufacturer.

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COVER STORY by Joel Gausten

If you’re a body shop currently using PartsTrader for non-State Farm jobs, expect your wallet to take a hit very soon.

Beginning August 1, PartsTrader will begin charging participating dealerships a 3.5-percent transaction fee on all sales that are not related to the nation’s largest auto insurer.

The announcement has sent shockwaves through a wholesale parts industry already stretched thin by current discounts that have put profit margins at risk.

Who Will Pay the Difference?

The upcoming pricing is the latest in a series of issues that PartsTrader users have encountered since the program hit New Jersey last year. After spending the last year in regular contact with nearly two dozen dealers in the Garden State, AASP/NJ Board member Mike Kaufmann has seen the escalating pressures affecting parts departments that implemented PartsTrader into their service offerings.

“In the beginning, there used to be a lot of orders coming through with the bidding war,” he shares. “They were trying to get as much business through it as possible, but they were wasting hours a day filling out bids when they didn’t get 75 percent of the orders anyway.”

Kaufmann says that many dealers were forced to only focus on serving PartsTrader requests that came in from pre-existing customers, often ignoring new customers who reached these parts departments through the system. With the 3.5-percent charge right around the corner, Kaufmann fears that things will become even worse.

“You don’t get anything for free,” he says. “They’re not charging the body shops to use it, but they’re pulling their weight and charging the dealer the 3.5 percent. But in the long run, the body shops will end up paying that.”

Who Will Handle the Change?

In his role as parts manager for Ditschman/Flemington Ford-Lincoln-Mercury, Howard Meeks is always looking for ways to provide a better service to his parts customers. When he realized that a good portion of his client base was going to be using PartsTrader, he made sure he was on it – despite

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the fact that things were already going consistently well with CollisionLink.

“I’m relatively neutral on the [PartsTrader] program,” he says. “My belief is that it’s a tool to order parts, and I’m all for technology. If it works for the body shops, then we’re behind it 100 percent. But it’s not a great tool for us because of some of the duplication we have to do when we process the order. Some of our manufacturers require it to go through CollisionLink in order to get back any price matching we’re able to do. So the way it’s set up right now, we have to do PartsTrader, do CollisionLink and then do the invoicing through our DMS [Data Management System]. It’s a three-step process, whereas if it was a direct CollisionLink order, we would only have to do two steps.”

Meeks says that his dealership is only seeing “maybe 10 percent” of the 40 or so PartsTrader quotes they process daily, despite the fact that he had to hire one new full-time person to handle the system’s daily operations.

“It’s not cost-effective for what we’re getting right now,” he says. “We try to analyze everything by ROI. When we look at a program, the first thing we do is say, ‘Okay, what do our customers think of it? Are they going to use it?’ But that’s not the way this was launched. If you had asked me when they first came to us if I was interested in buying it if it wasn’t based on being State Farm-driven, it’s not something I would have paid for.

There’s no benefit to a dealer having this program. I already have an option that gives more benefits to the customer. There’s way more I can offer a customer through OEConnection and CollisionLink than I can with PartsTrader.”

And that just involves what Meeks is dealing with right now.

What does he expect to happen once the new fee kicks in?

“If we have to process an order that’s non-State Farm and we’re going to pay 3.5 percent, that expense has to go somewhere,” he replies. “That’s where we will probably have the conversation with our customers and say, ‘You have two options.

You can give us the order any other way, and there’s no charge.

But if you’re going to use PartsTrader, then your discount is going to be different.’ It’s not an enjoyable conversation, but it’s the one we’ll need to have.”

This uncomfortable scenario could also play out soon for Bill DiRusso, parts director at Nucar Connection. In addition to passing the charge on to the parts customer, DiRusso believes there are only two other options here: Decline from participating in PartsTrader for non-State Farm shops (thus risking sales and profits and possibly forcing downsizing and cost reduction) or participate in the program (thus reducing the dealer’s profit margin and forcing them to reduce costs to maintain an acceptable ROI, which will negatively affect their service and employees).

Not exactly the greatest menu in the world.

“I can’t absorb 3.5 percent,” he says. “At some point it doesn’t make business sense selling parts for such a low margin and making so little profit, if any…PartsTrader knows they have a niche in the business, and they’re going to take advantage of that niche.

“Being in the OEM parts business for 33 years now, we have seen a lot of changes in selling parts, but not on such a large scale as it has been in the last five years,” he adds. “For us, it has been – until now – mostly competition from a non-OEM supply of

parts such as aftermarket, salvaged and recycled products, and more competition in pricing by other OEM suppliers. All of this has driven down the selling profit to the minimum. And on top of this, like any business these days, the consistently increased costs and expenses of doing business driving net profits down – especially for large OEM suppliers whose owners have invested millions in inventory, assets and receivables and expect to have a return – have become a huge concern.”

Who is Playing Along?

Of course, all of this talk of non-State Farm work going through PartsTrader raises a big question: How much non-State Farm work is even going through the system to begin with? If shops are not mandated by any other insurer to use the program, then why would they? Meeks has a theory.

“You’re going to have shops that say, ‘I want a consistent process,’” he offers. “If you have no other way to order – for example, if your management team tells you to order everything the same way and there’s no additional cost – then it makes a lot of sense. But when you start adding an expense to it, then the number of shops using it this way could go down to zero.”

Regardless of the reasons why non-Select Service shops would use PartsTrader, the trend appears to be growing. In the last quarter of 2014, four percent of DiRusso’s PartsTrader orders were from non-State Farm shops; during the first quarter of 2015, that number doubled to eight percent. Currently, PartsTrader orders account for 11 percent of his overall orders. So, eight percent of 11 percent…not much to worry about, right? Wrong.

DiRusso says that if the 3.5-percent charge was active during the first quarter of 2015, it would have worked out to .313 percent on all PartsTrader orders processes through Nucar. This is a sobering figure for a parts operation that was already happily using OEConnection before PartsTrader came along.

“I see no advantage to PartsTrader over other procurement programs that we utilize,” he says. “I see more advantages in others.”

Despite these frustrations, DiRusso is willing to keep PartsTrader in place as long as his customers feel the need to use it – but it will likely cost them. Ultimately, he feels that the choice of whether or not the program continues in New Jersey is not for him to make.

“The biggest point here is that it doesn’t matter what we do,” he says. “It depends on what the shops do.”

In Meeks’ mind, the whole PartsTrader scenario remains one of the industry’s most perplexing developments.

As he says, “It’s bad enough that they got people in New Jersey up in arms by making it mandated if you’re a DRP for State Farm. You already have upset body shops to begin with, and now you come back to the dealers – who were your only support group – and say you’re going to charge them. Well, either the dealer is going to be upset because they’re paying it, or the body shop’s going to be upset because the charge is bouncing back to them. I don’t believe this is the greatest, most thought-out marketing strategy I’ve ever seen.”

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NO BRAKES by Ron Ananian

THE GREAT RACE (to the Bottom)

There is a race underway that has been going on for years.

Parts manufacturers are creating this in many forms and functions, and auto parts houses are supporting the problem as well. Between them, a certain mentality clearly exists: “How cheap can we have a part made or purchased?” This results in junk being sold in the marketplace. The parts prices appear on the Internet at some point, allowing consumers to be the fair and impartial judge for setting the marketplace. Of course, consumers don’t allow for the necessities of the business world to exist as we do, and why should they? To them, it’s about what’s cheap, not what’s good or what knowledge is required. It’s just a part, plain and simple. Those who search the Internet for the cheapest price on junk parts lower the value in all we do. Even the simplest of tasks falls under this jurisdiction. They don’t allow for our skill to diagnose and install, something that even the highest of Labor Rates can’t account for in many cases.

small dollar amount in this or any other economy. When he was done, I asked, “How are the blades working?”

“Great. Best blade I ever had,” was his response.

I then went on to explain the benefit of this blade brand and why it is better for both the rubber used and manner in which it is made. I made the observation that you get what you pay for, and A late-model Toyota came into the shop last month requiring told him about cleaning the glass – something he never knew to oil and filter service and a set of wiper blades. Has anyone priced do or thought of. I also pointed out that using our blades (as his Internet find was not exact) was sure to give him at least a year or wiper blades lately? There are more than a few choices. In fact, there are too many – a direct result of the “let’s produce it cheaply longer of superior use. In the end, just as abruptly as he erupted, and see what it gets” mentality. So if someone were to price shop he calmed down and agreed with our level of service and the parts we used. blades, they would see pricing that ranges from $5 to $35 each.

On another note (but in the same symphony), a customer Quite the comparison. (Keep in mind that nothing is more frustrating than wiper blades that streak, smear, chatter or talk to you dropped off her mom’s Toyota this morning. It had been sitting a few days while the mom was recovering from surgery and the while in operation.) We always do a wiper blade replacement the battery had gone dead. Now the replacement battery was doing same way. We clean the glass (most of the time using a single the same thing. I diagnosed and verified. Bad battery. Even edged razor blade and a good glass cleaner) and use the best wiper blade the customers’ budget and our tolerance for junk will though it was brand new and three days old, “new” meant only one thing with this cheap product: Never Ever Worked. allow. This business model has been very successful over the years. Take a simple repair and make it better by providing good THE BOTTOM LINE IS... service and results. But if the current responses we’re getting Whether you know it or not, this is a race to the bottom, and from people are any indication, that success may have run its it is a race I don’t want to win. I am trying to avoid even particicourse. pating. Cheap parts from what were once some of the top vendors My conversation with the Toyota customer this morning started with, “I am very disappointed with you and may not bring for this industry stresses the point even more that they are asking themselves how cheaply they can we make a product and who the car back to your shop.” I thought to myself, “Thanks for will be forced (or coerced) to buy it. The Internet is now a major giving me the chance to correct a problem” but I didn't say it out player in our business. In some cases, it forces us to stress to cusloud so I could hear the rest of what he had to say. Evidently, he tomers that the one thing it cannot provide is talent to repair, and was upset at the price for two top-of-the-line wipers. He claimed that is what we bring to the table. The race will continue to grow he could get the same blade online for $6 apiece cheaper and didn’t see the need to support my shop by overspending. I listened and intensify in the coming years. It is up to us to help determine how it finishes by the choices we make in running our businesses. quietly while he went on and on over what, to me, was a very

’Til next time, I’m Ron Ananian, The Car Doctor, reminding you that “Good mechanics aren’t expensive; they’re priceless.”

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Ron Ananian, owner of R\A Automotive in Waldwick, NJ (est. 1978), is heard weekly in 140 markets on his nationally syndicated radio talk show. He is a working technician and former AASP/NJ Board member. Beyond his radio show, Ron writes and speaks for the automotive industry at trade shows and events. Visit The Car Doctor online at www.cardoctorshow.com.

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EXECUTIVE DIRECTOR’S MESSAGE continued from page 16 These rules are actually extremely thorough and do address almost every possible thing that a consumer might complain about pertaining to how a claim is being settled or handled. However, these words prevent anyone from taking an insurer to court and instead leave it up to the Department of Banking and Insurance to randomly survey the insurers. If they find that the insurer has violated these regulations enough to create a general business practice, the Department can fine them, if they choose to. Believe it or not, the Department actually does fine insurers quite often, but I would be willing to bet that insurers expect the fines and budget for them.

Don’t get me wrong. For years, I was actually quite naïve and believed that these rules and regulations worked. Well, I got the reality check, and now I am hoping that the collision industry will wake up and get the same one. These rules are not going to solve anyone’s problems. The only way that this industry is going to improve is to turn to the courts. Obviously, many across the country got the wake-up call; everywhere we look, there’s another lawsuit against insurers. One of the major suits that has been filed on behalf of the collision industry has had RICO added to it. You can bet that insurers are paying close attention to this one, because it is going to make a difference.

The reality is, now is the time for the collision industry to stand up and fight back. The changes that are taking place in the automotive industry are going to affect this trade like never before. If certain things are not resolved before those changes start to take effect, only the strong will survive. One example is a recent announcement that crash-avoidance systems will soon be required in every vehicle offered for sale in the US. This will obviously slow the amount of work the shops will see.

Right now, many of the shops can still accept the artificially suppressed Labor Rates by making it up in volume.

Once the more complicated vehicles get out in the market and the volume of work slows down, the shops will no longer be able to look the other way when an insurer says, “That is all we are going to pay,” or, “We don’t pay for that.” Now is the time to address these issues. I strongly urge members of the collision industry to join AASP/NJ, who is fighting to get these issues addressed on a daily basis. If anyone

would like to discuss membership or anything in this article or join the association, I can be reached on the AASP/NJ Hotline at (732) 922-8909 or via email at setlit4u@msn.com. I welcome any and all comments.

NJA

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ARANJ 2015 Officers President Bob Dirkes Dirkes Used Auto Parts (609) 625-1718 dirkesauto@gmail.com

1st Vice President Ian Szoboszlay Ocean County Auto (732) 349-0332 ian@cosmosautoparts.com 2nd Vice President Darryl Carmen Lentini Auto Salvage (908) 782-6838 darryl@las-parts.com

3rd Vice President Joe Goodman Leesville Auto (732) 388-0783 joeg@leesvilleauto.com Executive Director Brian Snyder Auto Recyclers of NJ (609) 714-2339 brian@aranj.org

ARANJ 2015 Board of Directors Mike Ronayne Tilghmans Auto Parts (609) 723-7469 tilghmans@snip.net

Mike Yeager EL & M Auto (609) 561-2266 elandmauto@aol.com

Rodney Krawczyk Ace Auto Wreckers (732) 254-9816 aceautonj@comcast.net

Mike Caputo Lacey Used Auto Parts, Inc. (609) 693-0898 laceyautomike@aol.com Bert Witcraft Auto Express (856) 728-8367

Ed Silipena American II Autos (609) 965-6700 esilipena@yahoo.com Harry Shover Porchtown Auto (856) 694-1555

Norm Vachon Port Murray Auto (908) 689-3152 portmurrayauto@yahoo.com

ARANJ Legal Update

The Automotive Recyclers Association of New Jersey

Governor Christie Signs Bill Limiting Access To and Destruction of Data Recorded by Event Data Recorders On May 11, Governor Christie signed Assembly Bill No. 3579 into law in response to growing privacy concerns over the data recorded by event data recorders (EDRs) in motor vehicles. The new law limits access to the data contained in EDRs, but earlier versions of the Bill also had the unintended consequence of limiting the ability of ARANJ members to perform their jobs by forcing them to leave vehicles damaged in an accident intact for two years before recycling its parts. Fortunately, through the efforts of ARANJ (with the assistance of Tyler & Carmeli, P.C.), the Bill was amended to the benefit of ARANJ members prior to being signed into law by the Governor.

From automatic braking and lane maintenance to blind spot warnings and in-vehicle Wi-Fi, motor vehicle manufacturers continue to incorporate the latest technologies into their vehicles. One lesserknown feature of many vehicles is the event data recorder, which, much like a “black box” on an airplane, records data concerning the operation of the vehicle. This data can then be accessed in efforts to determine the causes of accidents and driving patterns of individuals. Although EDRs are not yet mandated by law, they now come standard in most passenger cars and light-duty vehicles. Additionally, the National Highway Transportation Safety Administration has proposed regulations to require their installation in all light-duty vehicles.

Despite the touted benefits of EDRs (e.g., understanding consumers and improving vehicle safety), many have expressed privacy concerns since it remains unclear who owns the data being recorded, who may access the data and under what circumstances the data may be accessed. To alleviate these concerns, New Jersey became the 17th state to pass a law defining the limitations on access and use of data recorded by EDRs. Interestingly, the new law that limits access and use of such data also contains a second provision limiting the destruction of such data.

This latter provision initially contained a blanket prohibition on the deletion of data or destruction of an EDR within two years after a crash event resulting in bodily injury or death. For ARANJ members, this provision would require that they maintain their inventory of vehicles involved in accidents for two years before recycling and selling the vehicles’ parts. For most ARANJ members, compliance with this provision would have been impossible, thus forcing the ARANJ member to shut down or incur substantial penalties.

Through the efforts of ARANJ, the Bill was amended to limit its impact on their members. The final law signed by the Governor limits violations for those who delete data on (or destroy) an EDR to only those who do so with the “intent to prevent access to or destroy the recorded data.” Therefore, automobile recyclers that destroy an EDR in the normal course of business, where the intent is to recycle automotive parts and not to destroy recorded data or prevent access thereto, would not be subject to a violation.

In addition, the amendment establishes a rebuttable presumption that vehicle recyclers and scrap recycling facilities have no knowledge of involvement of a motor vehicle in a crash event resulting in bodily injury or death.

For further information, please contact George J. Tyler, Esq. or Matthew J. Krantz, Esq. at (609) 631-0600.

Wharton Insurance Briefs An ARA Member

Many Workers’ Compensation insurance programs provide the ability for an employee to “Return to Work.” This allows your injured employee the opportunity to transition back into the workplace once it is medically safe. According to the NCCI, lost time reflects about 50 percent of the total cost of the claim; medical expenses comprise the remaining 50 percent. Statistics indicate that when employees have the opportunity to transition back into the workplace via a return-to-work program, costs decline. The program can decrease time off from work, reduce the chances of attorney involvement and boost both employee morale and productivity. You don’t want employees to feel rushed back to work before they’re ready, nor do you want to risk a re-injury. For that reason, you want to identify and develop modified job duties, review your positions for appropriateness and provide guidance on implementing your return-towork program within your company.

As always, if you have any questions regarding this article or your insurance program, please contact me.

Mario DeFilippis, AAI, Vice President 800-221-0003 (ext. 1320) • 908-513-8588 (cell) • mdefilippis@whartoninsurance.com New Jersey Automotive | July 2015 | 53

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OUT OF BODY (AND MECHANICAL) EXPERIENCES continued from page 9

About 10 years ago, I got in line at the register at a Sports Authority and looked up to find that the cashier was none other than Theresa. I hadn’t seen her since graduation, and I was so happy I would finally have the chance to apologize and ask her how her life turned out and tell her if I had to do it over again, I would say yes 1,000 times.

I got to the register and she smiled at me and asked how I was. I said something like “Humunah Humunah” and ran out the door.

My son is graduating from high school next week. My daughter graduated from college a few weeks ago. I couldn’t be prouder. But what am I gonna write about NOW????

NJA

Mike Lovullo Distributor for

and

Micro-Mix Paint and

Materials Calculator in Bergen, Passaic, Essex and Hudson Counties in New Jersey.

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ADVERTISERS’ INDEX Acme Nissan......................................19

Future Cure........................................16

Porsche Group ..................................55

Amato Agency....................................43

Glen Toyota ........................................OBC

PPG ..................................................3

Audi Group ........................................30-31

Hyundai Group ..................................44

PPGMS..............................................26

Axalta Coating Systems ......................6

JMK BMW ........................................11

Prestige Motors..................................50

BMW Group ........................................36-37

JMK Saab/JMK Fiat............................9

Princeton BMW ..................................17

Bridgewater Acura..............................25

Klean Frame ......................................57

Princeton MINI ..................................50

Cadillac of Mahwah ............................4

Maxon Mazda ....................................38

Sherwin-Williams ..............................21,57

CCC Comp-Est ..................................56

Maxon Hyundai ..................................32

Subaru Group ....................................52

Classic Audi ......................................10

Mazda Group ....................................42

Town Motors ......................................15

Clinton Acura ....................................48

Mercedes-Benz of Freehold ................8

Toyota Group......................................49

Continental Auto Parts ........................48

Mike Kaufmann Dealer Group..............51

Toyota of Hackensack ........................IFC

Cosmo’s Recycled Auto Parts ..............18

MINI Group ........................................39

Valtek ................................................56

Empire Auto Parts ..............................57

Mitsubishi Group ................................47

VIP Honda..........................................25

FASTLIGN® ......................................23

Mopar Group......................................45

VW Group ..........................................54

Flemington Audi ................................5

NORTHEAST® 2016 ..........................58

Wheel Collision Center........................56

Flemington Group ..............................IBC

NUCAR ..............................................12-13

Fred Beans Parts................................27

Paul Miller Audi ..................................35

Busy Middlesex County body shop looking for experienced estimator with good customer skills. Must be self-motivated with accountability to join our SKILLS/REQUIREMENTS: Three to five years experience estimating team of professionals and Knowledge of CCC1 & Mitchell uphold our commitment Submit to criminal background check to customers and growth.

Must be able to build team relationships Excellent opportunity with insurance representatives & technicians for an Experienced Auto Must have experience working with DRPs Body Estimator/Appraiser Must be self-motivated, self-confident, in a fast-paced detail-oriented and display excellent communication skills environment and well-established business.

Benefits available after 90 days Apply via résumé at eagles@qlcinc.com

LET US TURN THEM AROUND! Contact New Jersey Automotive Sales Director Alicia Figurelli

973.667.6922 ALICIA@GRECOPUBLISHING.COM

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