Texas Automotive December 2018

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The official publication of the Auto Body Association of Texas and the Houston Auto Body Association

December 2018 $5.95

The Year of the Mustard Seed

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2 December 2018 Texas Automotive

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Contents on the

cover

December 2018

18

Official publication of the Auto Body Association of Texas and the Houston Auto Body Association

Don’t Lose Your Business: Surviving the Era of PostRepair Lawsuits

ABAT BOARD OF DIRECTORS

Vice President Brandon Dodd Lloyd's Body Shop brandon@lloydsbodyshop.com (903) 734-5175

President Burl Richards Burl's Collision Center burl@burlscollision.com (903) 657-8082

Chairman of the Board Corey Pigg S&W Expert Collision Repair coreyp@swcollision.com (936) 634-8361

By Joel Gausten

Kelly Allen Kelly's Carthage Collision kjkcse@gmail.com (903) 693-2328

pRESIDENT’S MESSAGE By Burl Richards The Hypocrisy of I-CAR EXECUTIVE DIRECTOR’S MESSAGE By Jill Tuggle 2018: The Year of the Mustard Seed

Drew Miles Classic Toyota drew@myclassictoyota.com (903) 579-0655

Chad Kiffe Berli's Body & Fine Finishes chadk@berlisbody.com (512) 251-6136

Eric McKenzie Park Place Dealerships emckenzie@parkplace.com (214) 443-8250

Chad Neal Innovative Collision Equipment Chadwneal@yahoo.com (817) 527-2143

Robert McDorman Auto Claim Specialists rmcdorman@autoclaimspecialists.com (817) 756-5482

EDITOR’S MESSAGE By Joel Gausten Keep the Faith lOCAl AND NATIONAl NEWS ABAT Attends Collin College Groundbreaking

INDUSTRY ADVICE: ASK MIKE By Mike Anderson How Can Shops Build Better Trust with Employees?

Mike Williams All Star Collision Center sales@allstarcollision.us (903) 589-3160

HABA BOARD OF DIRECTORS

Texas Schools Win Big at CREF Awards ASK THE EXpERT By Robert L. McDorman Please Help Me Understand Why the Insurance Carrier Totaled a Repairable Vehicle

Kevin Ellison Westway Ford kellison@vtaig.com (972) 584-9033

Dean Griffin Moritz Dealerships dean.griffin@moritzmail.com (817) 696-2000

ABAT Hits SEMA 2018 By Alana Bonillo

15 21

Executive Director Jill Tuggle jill@abat.us (817) 899-0554

ABAT BOARD MEMBERS

DEPARTMENTS

6 8 10 12

Treasurer David Osburn South West Collision Center dosburn@southwestautogroup.com (855) 395-2720

President John Kopriva Kopriva Body Works jtkopriva@gmail.com (713) 923-4412

Vice President Ronnie Brush Westside Lexus Collision Center rbrush@westsidelexus.com (281) 584-2285 Chairman of the Board Greg Luther Helfman Collision Center gluther@helfman.com (713) 533-6226

PUBLISHER Thomas Greco / thomas@grecopublishing.com SALES DIRECTOR Alicia Figurelli / alicia@grecopublishing.com ADVERTISING SALES: Michael Jackson / mjackson@grecopublishing.com

ASSOCIATION NEWS 24 ABAT MEMBER pROFIlE

27 HABA MEETING RECAp

McDaniel’s Quality Body Works

25 ABAT MEMBER ApplICATION

29 HABA MEMBER ApplICATION

CREATIVE DIRECTOR Lea Velocci / lea@grecopublishing.com EDITORIAL DIRECTOR Joel Gausten / joel@grecopublishing.com EDITORIAL/CREATIVE COORDINATOR Alana Bonillo / alana@grecopublishing.com OFFICE MANAGER Donna Greco / donna@grecopublishing.com

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English Color and Supply ....................................................16 FinishMaster ............................................................................23 Glick Automotive Enterprises ............................................26 Innovative Collision Equipment..........................................14 Mossy Nissan ..........................................................................11 Norton/Saint-Gobain ............................................................26 Phantom Equipment & Hydraulic Repair ........................9 ProLine Tool & Supply ..........................................................23 Reliable Automotive Equipment ........................................17 Sherwin-Williams ....................................................................5 Spanesi ....................................................................................14 Tasco Auto Color....................................................................30

4 December 2018 Texas Automotive

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 TEXAS AUTOMOTIVE is published monthly and is sent to ABAT and HABA members free of charge. Subscriptions are $24 per year. TEXAS AUTOMOTIVE is published by Thomas Greco Publishing Inc., 244 Chestnut St., Nutley, NJ 07110. The editorial contents of TEXAS AUTOMOTIVE are copyright © 2018 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. Stock Images courtesy of www.istockphoto.com.

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President’s Message The hypocrisy of i-car The auto body field is being hit with a lot of demands these days, but there are people who work in our industry who are standing in the way of our progress.

I

In my mind, one of the biggest issues we face is not being paid by insurers to do repairs in the safest and most professional manner possible. Personally, it blows my mind that there are several insurance appraisers out there who deny our charges while also teaching classes for I-CAR. I-CAR plays an incredibly important role in our profession. It is an entity that provides our technicians with the knowledge needed to tackle changing technologies in automotive design and ensure that our customers always make it home safely in their repaired vehicles. I have no problem with paying for I-CAR courses, as they are critical tools we need to have in order to grow and prosper as technicians and shop owners.

Unfortunately, that money is being spent on producing classes taught by people who seem to forget the rules the second they walk into a shop to appraise a vehicle.

I absolutely believe that I-CAR is hypocritical. If that organization wants to preach the importance of certification and safe repairs to the collision repair industry, then the insurance companies that employ their instructors should actually pay us to do these things. Regular I-CAR training – which is a key part of various OEM

certification program requirements – costs us thousands of dollars. It’s frustrating to constantly have to battle over money with the same insurance representative who stood in an I-CAR class and taught us the procedures they are now refusing to pay us to perform.

Texas Automotive recently reached out to Nick Notte, I-CAR’s director of business development, to address these issues. “ose instructors are teaching the I-CAR curriculum; they are delivering the curriculum as I-CAR has built it,” he explained. “From a standpoint of that instructor – the next day after teaching what’s required – going out and saying, ‘We don’t pay for that,’ that is not something that we, as I-CAR, will take action on or has taken action on.”

Personally, I find it sad that I-CAR pays these instructors but doesn’t feel that these paid instructors have a moral obligation to reimburse the consumer for safe and proper repairs that they know are recommended from the manufacturer and the industry.

Nick added the following: “I don’t believe it’s our place to set the standard for what should be paid for or not paid for. We can’t do that. at’s based on the

Burl Richards ABAT President individual decisions of those insurance companies.” e insurance company employees who are getting paid by I-CAR are also being paid by repair facilities via the fees for classes. I-CAR can’t control what an insurance company does or does not pay for, but it should have a higher standard when it comes to its employees and instructors. If you are going to accept money from a collision industry that is a big part of your very existence, then I believe you should be more selective when it comes to hiring and promoting individuals within your organization who are the very ones responsible for denying reimbursement for safe and proper repairs.

I’m in this industry for the right reasons. If I do unnecessary things to a vehicle during the repair process, then I shouldn’t be paid for them. But if my shop performs a procedure that is absolutely needed to bring it back to its pre-loss condition, then we deserve to be compensated for that. I applaud those people out there – including I-CAR instructors – who are working hard to educate facilities on how to do things correctly, but don’t expect us to do these things for free.

Nick and I are scheduled to discuss this issue further in the coming weeks. I look forward to that conversation and will keep our readers posted on the results.

TXA

burl@burlscollision.com 6 December 2018 Texas Automotive

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Executive Director’s Message 2018: The Year of the mustard seed As I reflect on this year for ABAT, I see the beginnings of great change. We have laid the groundwork for breakthroughs that will shift our industry.

I

I have had the honor to work for this amazing association for almost two years now, and watching our growth has been truly inspiring. Frankly, I expected a change of this magnitude to take years to come to fruition – but the way things are looking, we may be taking a big bite into the fruit of our labors in 2019. e Christian Bible uses the parable of the mustard seed as a story told about a seed, much smaller than most, that grows very quickly into a large tree. e black mustard tree spreads quickly, germinating almost immediately upon hitting the ground. I can hardly find a more fitting way to describe ABAT’s efforts this year.

We are germinating in every corner of the Lone Star State. In January, we were approached by a group out of the Rio Grande Valley that wanted to join the association and make moves in their area. We also held our first meeting in Austin that month with record-breaking attendance. By May, dates were being set

for a meeting in Abilene. In early November, a San Antonio group drove up for the day to iron out the details of their regional ABAT group. Leaders from these regions were making plans to start their own associations until they found out about ABAT, and they were thrilled to find that we had already begun checking off their “association bucket list.” e 2018 Texas Auto Body Trade Show reached new heights as well – not without growing pains, of course, but lessons learned have paved the way to new ideas. You can expect to see some changes next year in the way of scheduling and a much larger crowd due to the statewide expansion of our membership. e mustard tree has also been described as a plant that has “tremendous takeover properties” and can be very hard to get rid of. I can think of a few entities that may begin to feel this way about ABAT. e control is

Jill Tuggle ABAT Executive Director shifting, and it needs to. Scare tactics and isolation are no longer working.

Now, members and future members alike are reaching out to us via group emails and threads asking each other questions and debunking wives’ tale responses like, “You’re the only shop asking for that” or, “We don’t pay for that.” is communication, coupled with resources like National AutoBody Research’s BillableGenie, is giving shops a new set of negotiating tools that prove that insurers do “pay for that” right down the street. ere has been an unhealthy balance of power for far too long. We are not looking to take over; we are looking to bring balance. To feel like we do have a voice and can make good, moral business decisions and not send our customers home in a ticking time bomb.

Together with HABA, we have started a Political Action Committee (PAC). We are submitting a House Bill that addresses steering, database manipulation and liability. Funds are desperately needed to pay for lobbyists, support candidates and make our presence known. Please consider donating at abat.us/2018/11/pac/.

Join our mailing list and have a virtual front-row seat to all the action happening around here. Become a member for even more benefits. As always, feel free to contact me directly.

We need YOU.

TXA 8 December 2018 Texas Automotive

jill@abat.com

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9 December 2018 Texas Automotive

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Editor’s Message

Keep the faith As I write this message, I’m amazed by how quickly 2018 went by.

I’m sure I’m not alone.

T

ings in this industry are rarely dull, and there has been a lot to consider over the last 12 months. Nationally, we’ve seen the growth of automaker certification programs and a ceaseless push for the exclusive use of OEMrecommended/required procedures. In Texas, we saw attorney Todd Tracy and various collision industry representatives put aftermarket parts in the crosshairs through extensive crash testing. We also saw ABAT and HABA host major industry events attended by hundreds throughout the state. ere is an inspiring amount of forward motion occurring in the industry, and I look forward to seeing – and reporting on – where these developments take us in

2019 and beyond.

With that said, I know that it’s often hard to stay positive in your dayto-day business, especially when you’re fighting with an insurer over a necessary procedure or trying to make ends meet under the dark cloud of rate suppression.

I talk with industry members all the time who feel like everything they do is an uphill climb. It can be a struggle to see the big picture when you’re feeling the weight of endless pressure within the four walls of your office. I understand this frustration, but I also know that times are changing – and things truly are getting better. Now more than ever, ABAT and HABA need your participation and support to keep these

Joel Gausten Editor

positive trends moving forward. Attend meetings, contribute to association initiatives and work with your area legislators. It would be a great shame if progress in the industry isn’t achieved because too many shops lose hope and don’t answer the call for involvement.

Protect and defend your customers.

Perform safe and reliable repairs the first time. Stay up on industry news. And never give up.

My very best wishes to you all for an unforgettable holiday season and a prosperous 2019!

TXA

joel@grecopublishing.com

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Local News

National News

ABAT Attends collin college groundbreaking

ABAT HITS SEMA 2018

e Auto Body Association of Texas (ABAT) was among the collision industry entities that recently attended a special groundbreaking ceremony for the Collin College Technical Campus in Allen. Planned to launch in the fall of 2020, the curriculum at the new campus will include collision repair and automotive service courses – a first in the school’s history. e new facility’s ongoing planning and development has benefitted from direct input from ABAT, AkzoNobel, Park Place Dealerships, LKQ and others on the proper equipment and training necessary to provide the best educational experience possible.

“We want students to be able to come out with I-CAR credentials for ProLevel 1, ProLevel 2 and possibly ProLevel 3,” explains Toni Jenkins, higher education programming consultant for Collin College. “Moving forward, we’re going to be looking to ABAT members to help us identify guest lecturers and part- and full-time faculty.”

Brandon Gillespy, body shop manager for Park Place’s Dallas location, is pleased to see Collin College make such a strong commitment to providing new training opportunities to the ABAT community.

“In the Dallas-Fort Left to right: Brandon Gillespy (Park Worth market, we’ve Place), Toni Jenkins (Collin College), been lacking any type of ABAT Board member Eric McKenzie and voc-tech program. e ABAT Executive Director Jill Tuggle excitement about this coming to our metroplex Pictured Below: Work has officially is tremendous.” begun on Collin College’s new Technical

TXA

Campus.

e end of October once again brought thousands of automotive enthusiasts from around the world to the Las Vegas Convention Center for the SEMA Show to embrace some of the best education and equipment the collision repair industry has to offer.

ABAT President Burl Richards attended the Show as both a presenter and an industry representative interested in exploring new ideas in equipment, training and technology.

“You kind of get on an island when you are at your shop, so it’s great to be able to go to a national show like SEMA and listen to your peers in the industry who are trying to do the same thing every day, which is to repair cars properly. You just get such good information and get to keep up with what is going on.”

Richards has been a regular attendee at SEMA for several years; for 2018, he also served on the “Facing Increased Complexity and Liability - How to Protect Your Collision Repair Business” panel as part of the Society of Collision Repair Specialists’ (SCRS) RDE series. Richards was joined by Ron Reichen (Precision Body and Paint) and Shaughn Kennedy (Intrepid Direct Insurance) in an interactive discussion on the importance of following OEM procedures. e two-hour event was moderated by David B. Willett of Intrepid Direct Insurance. e foursome went over the realities of how today’s technologically dominated vehicle systems have completely changed this industry.

During his opening statements, Richards stated, “If you don’t follow OEM procedures, you aren’t ensuring your future as a business. You will not be relevant down the road if you are not doing this.” e eye-opening John Eagle case has forced every shop owner to question if their employees are taking shortcuts that they are not aware of; therefore, protection from liability lies in training.

“We aren’t just making an investment in training; we’re making an investment in our employees,” advised Richards.

Not surprisingly, the panel stressed that performing preand post- repair scans and recalibrations cannot be overlooked. is is becoming an even more important factor at a time when drivers are relying more and more on telematics.

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From valuable educational opportunities to non-stop action on the floor, SEMA 2018 was once again the most can’t-miss industry event on the West Coast.

As Richards says, “Many people go to see the equipment firsthand, learn and get knowledge. SEMA has done a great job of putting themselves out there and creating something where the entire industry can meet in one place and discuss the issues we deal with every day.”

TXA

ABAT President Burl Richards (second from left) during the 2018 SEMA Show

Reichen shared that this issue hit close to home when he realized that his own daughter doesn’t even use rearview mirrors, opting instead to focus solely on the camera feature to back out of a space. Shops need to be aware that these are the features today’s drivers depend on.

Richards says the biggest takeaway from SEMA was seeing how many people were in attendance at this discussion.

“Learning is one thing, but it’s also about listening to different ideas, different concepts and different views so one can better one’s business.”

While attending the “Understanding Liability in this New Era of Diagnostics, Calibrations and Programming” RDE panel featuring attorney Todd Tracy, Richards asked Nick Notte, I-CAR director of business development, what the organization is doing to communicate the importance of following OEM procedures to insurance companies.

“It seems critical to me that you get insurance companies on this side. ey know that it is required, but they won’t reimburse us for these procedures,” he stated. Notte responded that I-CAR, as a neutral party, believes it is its responsibility to bring industry segments together through the organization’s Industry Segment Advisory Councils (ISACs). He added that communication among parties has been civil, with repairers doing an excellent job presenting their case and insurance companies being willing to listen. According to Notte, there will be more success in this area in the not-too-distant future.

ABAT Board Member Eric McKenzie (Park Place Dealerships) also made the trip out to SEMA. “It’s an incredible show – a must for anyone in the automotive market but especially in the collision repair space. It has just exploded over the past five-10 years. ere really is something for everyone. Everyone should attend at least once.” e luxury dealer professional made time to attend the Mercedes-Benz Certified Collision meeting, where he learned about several new models and updates to their training. Additionally, he witnessed McLaren’s announcement that the automobile manufacturer celebrated a 10-year partnership with AkzoNobel as its refinisher for its F1 vehicles and McLaren street cars. MercedesBenz Collision Manager Benito Cid was a regular presence at SEMA 2018, speaking at the Mercedes-Benz Certified Collision meeting as well as serving as a panelist during SCRS’ annual OEM Collision Repair Technology Summit.

TEXAS SCHOOLS WIN BIG AT CREF AWARDS At its annual reception during the 2018 SEMA Show in Las Vegas, the Texas Southmost College Collision Repair Education Foundation instructor Cedillo Isidro (CREF) announced more than $500,000 accepts a $25,000 grant in Ultimate Collision Education from the Collision Repair Makeover school grants supported by Education Foundation (CREF) donations from industry companies and local I-CAR committee fundraising activities. ese grants will go to help improve 173 schools in 37 states with over 6,700 students enrolled in collision repair training programs.

“Collision repair training programs are facing tremendous budgetary pressure. It is difficult for many to maintain their program at current capabilities, much less invest in increasing their abilities to satisfy the industry’s current and future workforce needs,” said Melissa Marscin, director of operations/administration for the Foundation. “e Makeover grant program is designed to help collision schools get the much-needed tools, equipment and supplies they couldn’t get otherwise and increase their capabilities. For the third year in a row, every school that applied received some level of support through both grants and inkind donations.”

Texas vocational schools won big at this year’s event, with Texas Southmost College (Brownsville) leading the pack with a $25,000 CREF Award. e other winners from the Lone Star State are as follows:

$11,000 CCC Classroom Enhancement Grant Judson High School (Converse)

$5,000 GEICO Grant St. Philip’s College (San Antonio)

$1,000 Collision Repair Education Awards Alvin ISD, Hensler CTE Campus (Manvel) Duncanville High School (Duncanville) Kingwood Park High School (Kingwood) Eastfield College (Mesquite) R. L. Turner High School (Carrollton) Texarkana College (Texarkana) Texas State Technical College (Waco)

13 December 2018 Texas Automotive

Founded in 1991, CREF is a notfor-profit organization dedicated to supporting collision repair educational programs, schools and students to create qualified, entrylevel employees and connect them with an array of career opportunities. Information on how to donate to programs supported by the Foundation is available at collisioneducation foundation.org.

TXA

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14 December 2018 Texas Automotive

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Ask the Expert

By Robert L. McDorman

Please Help Me Understand Why the Insurance Carrier Totaled a Repairable Vehicle Dear Mr. McDorman: I own a collision facility in Austin. Over the last year, we have seen the number of repairable vehicles being deemed a total loss increase at an alarming rate. At our facility, we average 30 total loss vehicles a month. Granted, we collect our administrative, blueprinting and storage fees.

However, we would rather repair the vehicle if it can be economically and safely returned to its pre-wreck OEM condition to our client’s wishes. In my professional opinion, eight of the 30 vehicles the insurance carrier deems a total loss in our shop each month could and should have been returned to their pre-wreck OEM condition. It seems obvious to me that insurance carriers would rather deem a vehicle a total loss than repair it. I’ve heard insurance adjusters make catty comments such as, “Good news for us; we totaled another one.” For the life of me, I just don’t understand this. If we could repair just four of these eight vehicles that are, in my professional opinion, being wrongfully deemed a total loss, we could grow our business and spend more on education, certification and equipment. We could also better invest in our employees and their families. Is there a way or a process to prevent the insurance carrier from wrongfully deeming a repairable vehicle a total loss when my customer wants their vehicle to be returned to its OEM prewreck condition? is is a great question, and I have helped many shops deal with this frustrating issue. Yes, there are several ways to prevent the insurance carrier from deeming a repairable vehicle a total loss. e labeling of this wrongful action is “economic total loss.” is practice is called an “economic total loss” because it is in the best economic interest of the insurance carrier.

When an economic total loss event occurs, the insurance carrier has placed its financial interest ahead of the insured or policyholder. Each time the insurance carrier is allowed to wrongfully deem a repairable vehicle a total loss, the collision facility not only loses the job, but it also loses its customer and that customer’s family and potential referrals. It doesn’t have to end like this, as there are several methods to detour this troublesome practice.

e first step is to educate your staff and client on the total loss process and the client’s options. We encourage you to call or email Auto Claim Specialists with any questions your staff or clients have about the motor vehicle claim. We review many clients’ proposed total loss settlements each day in our office.

As a Public Insurance Adjuster agency, we are experts in all matters pertaining to vehicle insurance settlements. e second step is to inform the client the very instant the carrier deems the vehicle a total loss so that they can request that the company emails them the market valuation report. is report is the Ouija board used by the insurance carrier to undervalue the vehicle. ese reports tend to be populated with errors and are always skewed in the insurance carrier’s favor. e vehicle’s proper actual cash value is the driving force for reversing the economic total loss into a safe OEM restoration. On average, one in five total loss proposed settlements we review result in this reversal.

Expert appraisers at our subsidiary company, Vehicle Value Experts, will analyze the insurance carrier’s market valuation report and arrive at a true actual cash value of the vehicle at no charge to your client. e third step is understanding the Texas Transportation Code. is code – not the insurance carrier – is what truly defines a non-repairable or salvage motor vehicle. Texas is a 100 percent total loss threshold state, and it does not recognize the total loss formula to define what constitutes a non-repairable or salvage vehicle. Under the 100 percent threshold definition, should the repair cost fall below the true actual cash value of the vehicle (not the perceived actual cash value arrived at by the market valuation firm) and that vehicle is not missing a major component, then it isn’t classified as non-repairable or salvage. Additionally, Texas Transportation Code 501 takes the equation one step further and says that the repair cost – including parts and labor other than the cost of materials and labor for repainting and excluding sales tax on the total cost of repairs – must exceed the actual cash value of the motor vehicle immediately prior to being damaged. Before the calculation of determining if the vehicle fits the Texas Transportation Code definition of a non-repairable or salvage vehicle, all refinishing time, paint materials and sales tax must be deducted from the final repair

15 December 2018 Texas Automotive

Robert is a recognized Public Insurance Adjuster and Certified Vehicle Value Expert specializing in motor vehicle-related insurance claim resolution. As the general manager of Auto Claim Specialists, Robert expertly leads this National Public Insurance Adjuster Agency, which is currently licensed in 11 different states and specializes in providing automotive-related claim liquidation techniques, strategies and motor vehicle valuation services to all parties, including individual consumers, body shops, auto dealers, repair facilities, towing and storage operations, lenders, finance companies, banks, legal professionals, governmental agencies and others. The firm’s consistent success can be attributed to Robert’s 35+ years of automotive industry knowledge, practical hands-on experience and multiple certifications, including licensure by the Texas Department of Insurance as a Public Insurance Adjuster. Auto Claim Specialists clients can absolutely trust that they will be provided with analytical, sophisticated, state-of-the-art, comprehensive, accurate, unbiased and up-to-date data and information that all parties can rely upon as both factual and objective.

Robert can be reached at (800) 736-6816, (817) 7565482 or asktheexpert@ autoclaimspecialists.com.

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Ask the Expert If we could repair just four of these eight vehicles that are, in my professional opinion, being wrongfully deemed a total loss, we could grow our business and spend more on education, certification and equipment.

invoice. e accumulated dollar amount of these three components typically averages approximately 25 percent of the total estimate, which in return drastically decreases the severity percentage. If the determined value is less than the true actual cash value of the vehicle, then it does not meet the Texas Transportation Code 501 definition of a nonrepairable or salvage vehicle. Arriving at the true actual cash value of the vehicle is paramount.

In the 11 states in which we are currently licensed, Auto Claim Specialists has an average settlement increase of 29 percent over the insurance carrier’s final proposed settlement offers. Once a carrier realizes it is not going to be able to undervalue the insured’s vehicle, that alone can turn the tide and make it in the carrier’s best economic interest (based on correct valuations) to repair the vehicle. In the instances where the vehicle cannot be repaired, you will help your client receive an average 29 percent increase in settlement value. is happy client will then become your best advertising tool.

I thank you for your question and look forward to any follow-up questions that may arise.

Sincerely, Robert L. McDorman TXA

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17 December DECEMBER 2018 Texas Automotive

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Cover Story

It was only a matter of time.

When Todd Tracy scored his multimillion-dollar win against John Eagle, the story obviously served as a warning to any industry entity still tiptoeing around the importance of using OEMrecommended/required procedures. While John Eagle Collision was massive enough to illustrate just how devastating a judgment against a shop can be, there are thousands of repair operations across the country that are nowhere near that size. While the chances of a lawyer pursuing a $42 million suit against a small, independent shop with five employees are incredibly low, that doesn’t mean that a six-figure suit won’t come along and destroy that business. An “OEM procedure” is not just a talking

point at a conference; it’s a real-world necessity. If you want proof, all you have to do is look at the legal maelstrom that touched down in Ohio this past summer.

In July, attorneys for Cincinnati-based Sharon Woods Collision Center failed to earn an appeal of a 2016 court decision that hit the facility with nearly $106,000 for ignoring OEM procedures in the 2012 repair of a 2010 Nissan Maxima. ink about that figure for a moment. Would that kind of monetary hit derail your plans for retirement? Would that cost you a good employee? Would that completely put you under? Forget about John Eagle – these are the kinds of lawsuits that could cripple an industry. ere are few people in this profession

18 December 2018 Texas Automotive

who understand this reality more than Mark Olson, CEO of VECO Experts (vecoexperts.com). A former shop owner and I-CAR instructor, Olson spends a good chunk of his current professional life dealing with post-repair inspections. If there’s one thing he’s learned in his travels, it’s that a shop’s obligations to the quality of its work lasts from the cradle to the grave. “ere’s a difference between a warranty and a liability,” he told Texas Automotive during a recent interview at the 2018 SEMA Show. “Your warranty is for as long as they own the car. Your liability is for as long as that car is on the road.” ese days, all it takes is a minor consumer complaint – a color mismatch here, a few drops of rainwater in the trunk

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By Joel Gausten

there – to turn a seemingly good job into a legal nightmare. During his presentation at the 2018 Texas Auto Body Trade Show, Olson shared horror story after horror story of improper repairs turning shops upside down. At best, an offending business might lose a DRP or an OEM certification; at worst, the padlock hits the office door.

What can you do to shield yourself from this fate? In addition to actually performing a correct repair, you need to have what Olson calls a “bulletproof file” consisting of authorization forms, logs of notes (both internal and external), proper OEM repair procedures, photo documentation (in specific timeframes before and during the repair) and much more.

“You’re going to get shot at…In your file, are you bulletproof to withstand that shot? If you give me your file, I should never have to talk to you again. I should know everything that happened – from communications to the pictures to everything. If you can do that and fully have everything done right, you’re going to be able to win.”

In Olson’s mind, one of the most critical elements to a “bulletproof file” is also one of the most overlooked: Data. When using a data provider, shops need to know how long the information they’re generating is actually stored – and what happens to it if they switch platforms.

“If you get a phone call 10 years from now, where’s your data?”

As repair facilities work to keep better records and protect themselves against litigation, Olson also advises that all those much-discussed OEM position statements floating around these days are basically worthless in a court of law. While that statement might be a shock to many, Olson believes that these “cheat sheets” have the potential to do more harm than good. Let’s say a technician is looking

Mark Olson of VECO Experts warned shops of growing post-repair liability at the recent Texas Auto Body Trade Show.

to a replace a frame rail. at repairer might look up the section recommendation, but will they also look up the recommendations for headlight aiming or battery disconnection? is is one reason why crucial procedures might get overlooked – and why lawyers might continue to earn substantial profits from this industry.

“If we had a position statement for everything you’re supposed to know, that’s actually the body repair manual. I actually wish that they would get rid of position statements; [their accessibility] allows people to not do the work that is necessary to properly [restore] the car.

“If you’re sliding a position statement into court, you’ve already lost,” Olson adds. “e judge doesn’t want to know globally what it is; they want to know what it is. A position statement, in my opinion, is just a nice thing to tell you what’s probably in the repair documentation.”

If position statements are no longer the valuable tools they once were, that leaves shops to access OEM repair information directly through the

19 December 2018 Texas Automotive

automakers’ websites – at a cost. e “pay to play” structure of many manufacturer sites may be a controversial subject, but the long-term benefits of tracking down the proper procedures far outweigh the costs – and the potential economic disaster that awaits any facility willing to send out a car that hasn’t been repaired to OEM standards.

As Olson says, “How much is $20 [to access the information] compared to $42 million?”

As the industry braces itself for another year of technological advancements and elevated demands, the legal profession is sure to maintain its focus on the work being done on shop floors across the country. Will you be one of the facilities that makes it through 2019 by producing liabilityfree work, or you will be one of the shops that will learn the hard and expensive way that following OEM methods is the only road to a safe repair? Your family, your staff and the entire collision repair industry hope you choose the right answer.

TXA

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Industry Advice: ASK MIKE

HOW CAN SHOPS BUILD BETTER TRUST WITH EMPLOYEES? This month, we “ASK MIKE” to share ways that shop owners can build stronger trust with their employees.

We at Texas Automotive 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.

Texas Automotive: e industry spends a lot of time working to gain the trust of consumers, but some shop owners fall short on gaining the trust of their employees. As a result, important things in terms of communication get missed as time goes on. Based on your experiences as a former owner, what are the biggest mistakes you see shops making in this area? What were some mistakes you made yourself?

Mike Anderson: I’m an avid reader; one of my favorite books is e Speed of Trust

by Stephen Covey. He said that if you have the speed of trust – meaning two individuals or two organizations trust each other – you can make decisions at a more rapid pace. In his book, one of the things that he talks about is the ability to talk straight. To give a very real-world example, let’s say that I’ve never met you a day in my life. You’re coming out of a restroom and I see that you left your zipper down.

I’m not going to go up to a complete

stranger and say, ‘Sir, you left your zipper down,’ because I’d be concerned with what that person would think of me. Because of that fear, I won’t say anything. Now, let’s change the dynamic. You’re a friend of mine, and I see you coming out of the restroom. If I say, ‘Hey, you left your zipper down,’ you’re probably going to thank me. When you have a relationship of trust, you can have an honest dialog with someone. We live in a world today where people are so concerned that their words might be misconstrued or misinterpreted that we avoid a lot of honest dialog.

I think trust is really important between individuals you work with. When I had my shops, I was in a 20-Group called the Coyote Vision Group. ey had a guest speaker, and he asked us, ‘How many of you think your employees trust you?’ Of course, I raised my hand and said, ‘My employees absolutely trust me.’

He asked if he could go in and survey my employees. I absolutely agreed to that.

21 December 2018 Texas Automotive

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).

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Industry Advice: ASK MIKE

“

When you have a relationship of trust, you can have an honest dialog with someone.

When he came in and talked with them, I found out that less than 60 percent of my employees trusted me. at was very disheartening to me; I was almost in panic mode. I thought, ‘Oh, my gosh! Are they going to quit? What did I do wrong?’

He said, ‘Mike, your employees love you, but they don’t trust you because you’ve made promises to them that you did not keep.’ I learned a very valuable lesson that broken promises lead to a loss of trust.

As business owners and managers, we all have the best intentions. We say, ‘Hey, I’ll hire you and review your pay in 90 days.’ en, we just get busy and caught up in life and forget to do it. Maybe we say, ‘If I hire you and you start on the wash racks, I’ll give you an opportunity if we ever need a prepper or body apprentice.’ en, we forget we’ve made that promise and hire somebody outside the organization. As a result, we lose trust. After realizing this, I went to my employees and said, ‘If I’ve ever made a promise to you I didn’t keep, will you please give me an opportunity to make it right?’

When I do consulting at a shop, I’ll often ask the employees, ‘Do you trust your boss or manager?’ In one case, an employee told me she didn’t trust her boss because he told her if she ever referred anybody to him and that person was hired, she’d get a $500 bonus. She said, ‘I did that, and this person didn’t even notice.’ I asked her how long ago it occurred, and she replied, ‘Four years.’ For four years, this was stuck in her craw. Knowing the business owner and knowing that he was a very reputable person, I sat them down together. He said, ‘I’m sorry! I didn’t mean to do that.’

He made it right, and he also told her, ‘If I make a promise to you in the future and I don’t do it, please hold me accountable on that.’

As business owners and leaders, we have to have that foundation of trust. I would encourage anybody reading this article to do two things. First, go back to your employees and ask them, ‘Have I ever made a promise to you that I didn’t keep?’ en, be quiet, listen and work hard to make that right. Second, create a foundation with your employees that makes you accountable. At the end of the day, we have nothing without trust.

I struggled with that every day. I always told people, ‘If you ever need me, email or call me.’ en, I’d get caught up in life and get 6,000 emails, my plane would get delayed and I didn’t get to where I was going to work on those emails. I didn’t reply to those emails, and then I would lose trust with those people. I had to change my behavior. Now, my assistant Tiffany’s name is on the back of my business card. I say, ‘Hey, if I don’t get back to you in a day or two, reach out to Tiffany because I don’t want to lose your trust. I may have just gotten caught up in life where I didn’t have the ability to get back to you in a timely manner.’ at’s something that I apologize to the industry for. I want to return everybody’s email and phone call, but sometimes I get busy and behind.

TXA: I don’t know a body shop in this industry that isn’t incredibly busy these days, so properly communicating with staff is critical. When you consult with shops, have you seen any practices that really did the trick in keeping communication successful?

MA: Doing employee reviews quarterly helps. If you can do that quarterly, you tend to keep yourself out there in front of the employee so you can make things right before it does go too far.

TXA: is discussion we’re having was inspired by a recent presentation you gave in New Jersey on this and other topics. For that meeting, you also brought along folks from Bodyshop Booster and Podium. Why should shops be aware of these two companies?

MA: With Podium, it’s really about trust. At the end of the day, customers decide if they trust us based on our online reviews. Podium has done a great job of helping shops get a lot of reviews through the way the company sends the link to the Google review for customers. at’s a way for shops to get a lot of Google reviews; that’s why I brought them to that meeting. With Bodyshop Booster, one of the statistics that has been shared with me is that 36 percent of all consumers want our services outside of our normal business hours. ey want the ability to get an estimate, schedule an appointment for one or schedule an appointment for a drop-off. If we don’t have the ability to tap into that, we have the potential of losing up to 36 percent of those customers.

22 December 2018 Texas Automotive

TXA

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23 December 2018 Texas Automotive

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ABAT Member Profile McDaniel’s quality body works There are several long-running auto body shops in Texas, but very few have been around nearly a century.

McDaniel’s Quality Body Works has won the Locals Love Us and Best of East Texas awards several years in a row.

McDaniel’s Quality Body Works’ history in Longview dates back to 1933. e shop was a three-generation family business until then-owner Mark McDaniel sold it to Darrell Smith – who had already served 15 years as the business’ service manager – in 2011.

“It was such a family-run business that Mark wanted it to go to somebody who would maintain that atmosphere rather than sell it to a large MSO.” Unlike most shop owners, Darrell didn’t transition into the role after working as a technician. Instead, he spent his first 15 years at the shop focusing solely on the business and logistical side of things. is included extensive work managing the shop’s relationships with insurers, a skill he developed during his five-year stint as an appraiser for State Farm prior to entering the collision repair field. Utilizing his perspectives and experiences from both side of the fence, he succeeded in minimizing the adversarial nature of typical shop-insurer interactions.

“When you have a better grasp of what their expectations are, it smooths out your ability to work with them within the adjusters’ parameters. It’s a give-and-take proposition.”

Nearly eight years after Smith took over its operations, McDaniel’s Quality Body Works continues to thrive beyond expectations. Darrell’s wife, Cherie, serves as vice president and office manager. She originally worked at McDaniel’s from 2000 to 2004 before becoming an adjuster for GEICO for eight years. With the ever-popular Longview location typically packed with 90-100 vehicles at a time, the Smiths decided to expand McDaniel’s two years ago and launched a second location in Kilgore. Combined, the shops currently boast 48 employees, including several who have been with the business for decades.

As their operations grew, the Smiths established a friendship with fellow shop owner Burl Richards. When Richards and other area industry members decided to create the Auto Body Association of Texas to represent their concerns and work towards changing the industry for the better, Darrell and Cherie were among the first to get involved. In fact, Cherie served as ABAT’s first treasurer.

“Burl’s always had a pretty strong voice in what goes on in our area,” Darrell says. “Even before ABAT, we spoke a lot about issues that were going on, so he knew we were a pretty 24 December 2018 Texas Automotive

progressive shop that was looking to expand into new technologies and get our guys paid for what they do. It was just natural that we would be called on to be in the first group of people that got together when ABAT formed.”

As for the future, Darrell is hopeful that ABAT’s growing presence in the state will lead to substantial change for body shops struggling to rise above common obstacles.

“I think what we’re trying to do legislatively is a very positive direction.

We all have our daily battles with things we’re trying to establish within our market to get our guys paid for what they do. What we’re doing with legislation is really going to help our industry as a whole to try to change the problems and mindsets we’ve been dealing with for a long time. We just want safe and proper repairs for our customers. We can try that every day at our individual shops, but when you have insurance companies standing behind laws that nobody really knows how to interpret, it’s just an uneven playing field.”

Away from the shop, Darrell and Cherie operate Grace House of Longview, a faith-based transition home designed to help young women who have struggled with incarceration, addictions and other poor living choices. e home was inspired by their middle daughter, Ashley, who overcame alcoholism through the help of a San Antonio ministry.

With a strong devotion to their customers and community and a commitment to helping ABAT thrive, Darrell and Cherie have what it takes to find true success and contentment in a demanding profession.

“We enjoy the business, our employees and our customers,” Darrell says. “I’m 54 years old; I’m trying to maintain this industry connection for the next 10 years, and then I’m going to the beach!”

TXA

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Auto Body Association of Texas Membership Application Company Name:______________________________________________________________________ Primary Contact: _____________________________________________________________________ Position: ____________________________________________________________________________ Phone Number:________________________________ Direct Line/cell: ________________________ Email: _______________________________________________________________________________ Business address: ____________________________________________________________________ Years in Business: _____________ Website: _______________________________________________ ⃝ Full 2018-2019 Dues $500 – MSO $250 per shop ⃝ 2017-18 Affiliate Dues $500

Approved prorated first year dues: contact us for prorated amount*

*membership dues are owed in August of every year. By joining today, you will pay a prorated amount and then will owe the full $500 August 2019 Signature:__________________________________________________________Date: ____________ Please pay online at http://www.abat.us/join-abat/ or make checks payable to ABAT Please submit membership dues to: ABAT 1207 N. Frisco St. Henderson, TX 75652

Questions? Please contact Jill Tuggle at 817-899-0554 / jill@abat.us

25 December 2018 Texas Automotive

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HABA Meeting Recap “Safety is the Priority:” Inside the Houston Auto Body Association’s 2018 Fall Conference On November 12, the Houston Auto Body Association (HABA) presented its 2018 Fall Conference, named “Safety is the Priority,” at the Wyndham Houston West Energy Corridor. The all-day event drew more than 100 collision repair professionals who were treated to in-depth discussions on the industry’s complex present and hopeful future. e meeting opened recognizing Veterans Day and attending veterans.

Legendary industry speaker and former shop owner Mike Anderson (Collision Advice) got the day rolling with a presentation detailing how shops can better identify and document everything necessary to perform a safe and reliable repair. Anderson also urged attendees to regularly take his “Who Pays for What?” surveys (available at collisionadvice.com) and shared statistics and insight into where he felt the market will be in the future.

As he explained to Texas Automotive following the event, “Wayne Gretzky was asked what made him a great hockey player. He said he never skates to where the puck was; he always skates to where he thought the puck was going to be. I shared with attendees where I felt the puck [the industry] was going to be. [e Fall Conference] was well-attended, and shops were very passionate and engaged in my presentation.”

HABA President John Kopriva is quick to praise Anderson’s high-energy style and efforts to inform the industry.

The notorious 2010 Honda Fit from the John Eagle case made an appearance at HABA’s event.

“Mike can definitely hold your attention while driving his points home.”

Presenter Tim Ronak, senior services consultant for AkzoNobel, appeared at the Fall Conference to deliver an important – and, for some, quite surprising – message: “Severity Doesn’t Matter.” “e purpose of the presentation was to educate people that, in statistics, the ‘measure of central tendency’ is typically not a valid measurement. One, the sample size is too small. Two, it’s incredibly skewed.”

In Ronak’s mind, what this means for the collision repair industry is that shops often suffer the effects of working within insurers’ unrealistic severity expectations. He was inspired to create the presentation after one of his client facilities – a DRP for a major insurer – faced a dilemma when a repair procedure called for the use of four new OEM wheels. “ey knew the moment they bought those new wheels – which were rather expensive – that it would drive their KPIs up to the point where they

would have been removed from the program. e [shop] owner chose to [use new] wheels and not bill the insurance company. at type of behavior is where shops start indemnifying insurers for their loss, which is not the business of collision repair.”

Not surprisingly, the Fall Conference focused considerable attention on attorney Todd Tracy’s legal victory against John Eagle Collision in Dallas. In addition to playing a video of Tracy’s presentation from the 2018 Texas Auto Body Trade Show in September, HABA brought in the actual 2010 Honda Fit that was involved in the notorious collision that nearly killed Matthew and Martha Seebachan.

Kopriva believes the vehicle’s presence at the event enforced the importance of utilizing OEM parts and procedures. “at drove the point home with so many people. I don’t see how anyone could survive this accident. e damage is so severe that you cannot identify the make of the vehicle.”

Luncheon speaker Dan Parsons, president of the Better Business Bureau

HABA’s Fall Conference inspired direct communication between members and industry experts.

27 December 2018 Texas Automotive

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HABA Meeting Recap of Greater Houston and South Texas, discussed ways that shops can better instill trust in the motoring public. He also made hand-out information available to attending businesses interested in joining the BBB. In closing, Parsons noted that the motoring public wants to ensure that they are dealing with a well-established business that is reputable and maintains an A+ rating at the Bureau. e Fall Conference also featured a special presentation by HABA Legislative Coordinator Larry Cernosek, who gave an update on the association’s recent discussions with the Texas Department of Insurance and the development of upcoming legislation that will aim to improve the industry.

Kopriva reinforced prior legislative comments by adding, “We’re working to get the Motorist Bill of Rights enforced, and that will be one of our driving forces for 2019.” e Fall Conference concluded with a special question-andanswer session that allowed repairers and owners to have their thoughts and concerns directly addressed by the experts. Kopriva is pleased that HABA was able to provide this exchange to members and non-members alike. “e questions we received were excellent. We could have gone on well into the evening. e panel discussion solidified the day for me. Everybody came away with something they can take back to their shops.”

For more information on HABA, upcoming events and seminars, go to habaonline.org.

TXA

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28 December 2018 Texas Automotive

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HOUSTON AUTO BODY ASSOCIATION Membership Application Please Print

Company Name:

Primary Contact:

________________________________

________________________________

Business Address, City, Zip Code

Phone:__________________________

________________________________

Years in Business: __________

Email:___________________________

Website:_________________________

____ Member Dues $450 (all body shops)

____ MSO dues $250 Per Shop

____ Af liate dues $450

____ Sponsorships - See Attached

NOTE: Please make your check payable to Houston Auto Body Association or (HABA) and submit membership dues and application to: Houston Auto Body Association 4619 Harrisburg Blvd.

Houston, Texas 77011 or sign up online @ www.HABAonline.org All new membership applications require nomination and review from the Board and a majority vote for nal approval.

(Please Sign Here) X _______________________________________ Referred By:

_______________________________________

By signing this form, I agree to abide by the Association code of ethics including all bylaws that govern the Houston Auto Body Association.

OUR MISSION The Houston Auto Body Association is comprised of collision repairers devoted to the advancement of the collision repair industry. Our mission is to create an environment of professionalism, respect, accountability, excellence, enthusiasm and the ability to collect fair and reasonable compensation for collision repairers who properly restore vehicles to their safe pre-loss condition.

29 December 2018 Texas Automotive

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