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The Official Publication of the Wisconsin Auto Collision Technicians Association Ltd.
Fall 2017
PLUS:
The Shocking Truth About Accountability 2018 WACTAL Conference & Trade Show Preliminary Schedule of Events
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2016-2018 WACTAL BOARD of DIRECTORS President Larry Terrien, MJ Collision Center larry@mjcollisioncenter.com Vice President Mark Williams, Williams Auto Body mark@williamsautobody.com Secretary Ronnie Goss, Goss Auto Body, Inc. ronnie@gossautobody.com Treasurer Sue Black, Dean’s Auto Body suzieq@deansautobody.com Directors Eileen Haberman, Glen's Auto Body, Inc.
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Vol. 5, Number 1
CONTENTS PRESIDENT’S MESSAGE................................................................5 The Hidden Dangers of Photo Estimates by Larry Terrien WACTAL RECRUIT-A-MEMBER PROGRAM ............................................5 LOCAL NEWS ............................................................................7
Mike Miyagawa, M & M Auto Body Inc. Michael Taylor, Zimbrick Chevrolet-Sun Prairie Tracy Black, Dean’s Auto Body, Inc. Association Administration Sue Peterson wactal@execpc.com / info@wactal.com (800) 366-9472 Lobbyist Jolene Plautz jplautz@aol.com
PUBLISHED BY: Thomas Greco Publishing, Inc. 244 Chestnut St., Suite 202 Nutley, NJ 07110 PHONE: 973-667-6922 • FAX: 973-235-1963
WACTAL MEMBER SPOTLIGHT ........................................................9 Uptown Auto Body by Michael Marino WACTAL BENEFIT PROGRAM ..........................................................11 TALKING TECHNICAL ........................................................................12 The Shocking Truth About Accountability by Larry Montanez III, CDA Ask Mike ......................................................................................16 How can OEM-certified shops balance their obligations to the manufacturers while also dealing with insurers? by Mike Anderson WACTAL MEMBERSHIP APPLICATION ................................................18
ADVERTISING: 973-667-6922 • alicia@grecopublishing.com PUBLISHER Thomas Greco (thomas@grecopublishing.com) SALES DIRECTOR Alicia Figurelli (alicia@grecopublishing.com) CREATIVE DIRECTOR Lea Velocci (lea@grecopublishing.com) EDITORIAL DIRECTOR Joel Gausten (joel@grecopublishing.com) EDITORIAL / CREATIVE COORDINATOR Kristen Dalli (kristen@grecopublishing.com) OFFICE MANAGER Donna Greco (donna@grecopublishing.com)
ADVERTISER’S INDEX Axalta Coating Systems ..........................IFC Dentsmart ................................................17 American Honda Motor Co......................OBC
International Autos Waukesha..................10
AkzoNobel...............................................IBC
Morrison’s Auto Parts ..............................6
Body Shop Supply Co. ............................4
Straight and Square ................................8
Buerkle Hyundai ......................................8
Zorn Compressor & Equipment ..............10
www.grecopublishing.com Wisconsin Automotive News is published quarterly by Thomas Greco Publishing, Inc., 244 Chestnut Street, Suite 202 Nutley, NJ 07110. Distributed free to qualified recipients; $48 to all others. Additional copies of Wisconsin Automotive News are available at $5 per copy. Reproduction of any portions of this publication is specifically prohibited without written permission of the publisher. The opinions and ideas appearing in this magazine are not necessarily representations of Thomas Greco Publishing, Inc. or of WACTAL. Copyright © 2017 by Thomas Greco Publishing, Inc. Cover image © www.istock.com.
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President’s
The Hidden Dangers of Photo Estimates
WACTAL has heard from several members recently about concerns regarding photo estimating. The service allows customers to upload photos of the damage of their “drivable” vehicles when they file their claim. By eliminating the appraiser as the middleman, the insurance companies say that the service is an added convenience and speeds up the claims process. However, they hardly ever mention that it also saves them a bundle of money! Esurance, MetLife, Liberty Mutual and Allstate are just a few of the companies that are offering this service. Is this process really more convenient, or does it just create more work for the customer to file a claim? The issue here is: What price are motorists paying for this “convenience?” They are not trained on what to look for when they take these photos. Vehicles are so complex today—there is no way a couple of pictures can thoroughly capture all the damage. We are seeing photo estimates come in for $1,200-$1,500, but the total cost of repairs is often $3,000-$4,000 after the job is completed. Often these “drivable” vehicles are not drivable at
MESSAGE
all. When a physical inspection is done, shops are finding things like cut tires, loose parts, damaged suspension components, non-functioning lights, damaged sensors and more. None of these would ever be seen on a photo, but all would probably make the vehicle unsafe to drive. How many times have you done “temporary repairs” on a customer’s vehicle at the time of the estimate to ensure that the vehicle was safe to drive? Things like reattaching loose parts or changing a bulb are things that we do as a service to our customers. It is our duty to educate our customers on the importance of bringing their vehicles in for a physical inspection! Another issue we are seeing is insurance adjusters or desk reviewers changing shop supplements based on pictures rather than a physical inspection. If you have experienced this or have any other concerns about photo estimating, please contact me, or contact Sue Peterson at the WACTAL office. We need to hear from you! WAN
Recruit-a-Member Program For each member an existing WACTAL member recruits, the sponsoring (existing) member will receive a one-time $50 credit toward their membership dues. There is no limit on the number of members an existing member can recruit. If the dollar amount of the credits exceeds the sponsoring member’s annual dues, the excess amount will carry forward to subsequent years. No monies will be paid out and credits cannot be cashed out. Credits cannot be split amongst multiple members. The sponsoring member’s individual and business name must be listed on the new member’s Application for Membership as the sponsoring member.
If the new member had been a WACTAL member during the prior calendar year, no commission will be allowed. This program can be rescinded or amended without prior notice. In the event the program is rescinded or amended, credits for applications received after the change will be processed under the new program. No credits will be issued if the program is rescinded.
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2018 WACTAL Conference & Trade Show Preliminary Schedule of Events WACTAL Conference & Trade Show February 16-17, 2018 Wilderness Resort, Wisconsin Dells 800-867-9453 After a well-received presentation in Oshkosh, Mike Anderson (President of Collision Advice) is coming back to Wisconsin for “A Day with Mike & Friends.” Mike and his friends (industry representatives) will kick off the conference sharing their insights into the collision repair industry. Has stress taken over your life? Health and Wellness Coach Laura Lotto is offering a special spouse’s program on stress and how the power of therapeutic oils can be the missing tool you've been searching for. Mike’s presentation will be followed by a special presentation by a representative from Wisconsin’s Workforce Development on the newly developed auto collision apprenticeship program. I-CAR classes will be offered on Saturday. The WACTAL Trade Show will be open Friday (5-8pm) followed by a hospitality reception. The Trade Show will open again on Saturday 10am - 2pm. Take this opportunity to learn, network, relax, and have a little fun. Visit the WACTAL website for updates, information and details.
Registration 8:00am
Friday, February 16 A Day With Mike & Friends 9:30am - 11:30am Presented by Mike Anderson (President of Collision Advice) & Guests Lunch 11:45am - 12:45pm
A Day With Mike & Friends (cont.) 1:00pm - 4:00pm Presented by Mike Anderson & Guests
Balancing and Managing Stress with Essential Oils 3:00pm - 4:30pm Presented by Laura Lotto Has your stress taken over? Do you struggle to keep your cool? Is your sleeping less than stellar? Is your health being adversely affected? Health & wellness coach Laura Lee Lotto will take you on a journey of self-awareness and teach you how the power of therapeutic grade essential oils can be the missing tool you have been searching for!
Special Presentation by Owen Smith on Auto Collision Apprenticeship Program 4:15pm - 5:00pm TRADE SHOW 5:00pm - 8:00pm
Local
NEWS
Hospitality 8:00pm - 11:00pm Registration 8:00am
Saturday, February 17 Cleansing Your Life with Essential Oils 8:30am - 10:00am Presented by Laura Lotto In our modern world, chemicals and toxins are everywhere. Have they been affecting you negatively? Are you looking for a way to help you or your partner cleanse their body? Chemical exposure can affect our hormones, our mental health, physical health and have very dangerous long term lasting effects. Mother Nature has some powerful solutions with pure plant oils. Heath & wellness coach Laura Lee Lotto will teach you the easiest and safest way to clean up your home and your body using essential oils. I-CAR Class 8:00am - 12:00pm
8:30am - 10:00am - General Session TBD TRADE SHOW 10:00am - 2:00pm
I-CAR Class 12:30pm - 4:30pm
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Kenosha Shops Sue State Farm for Labor Rate Rollbacks by Kristen Dalli
Three collision repairers out of Kenosha are currently suing State Farm after the insurance company grouped them into the Chicago market to lower their hourly Labor Rate, and they could seek up to $1 million in damages. Pulera Collision, Armando’s Collision Center and Jay-Bee Collision Repair Center filed the lawsuit in June 2016 after State Farm’s Labor Rate reduction pushed all three shops from the company’s Select Service Network. Both Pulera Collision and Jay-Bee Collision Repair Center are current WACTAL members. State Farm lowered the Labor Rate $6 per hour, from $56 to $50. The shops indicated in the lawsuit that the Labor Rate hasn’t been that low since 2008. The plaintiffs are also arguing that State Farm began steering customers away from the shops. Their attorney, David Fall 2017
Novoselsky, said they’re currently in the process of estimating how much business the repairers have lost because of State Farm’s purported actions. The rollback came from a geographic survey being done for Medicare back in 2015. “They used a demographic survey basically saying Kenosha is similar to Lake County [Illinois], which is similar to Chicago, which I think would surprise a lot of people who live in those three areas,” Novoselsky said June 9, according to a transcript of the motion to dismiss the hearing. Overall business at the shops has also taken a hit, as it now appears that these shops are charging more than what State Farm’s Select Service shops are charging, when in reality, their rates haven’t continued on pg. 17 7
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Uptown Auto Body Racine, WI Mike Payne opened his the doors to his family business in 1961, with partner Joe Machalik and his brothers Jim and Thomas, and for over 40 years, Uptown Auto Body has been one of the most reliable collision repair shops serving the Wisconsin area. Despite the longevity of his time in the industry, it wasn’t Payne or his brothers’ first career choice, but since taking over, they’ve expanded the business twice. “My dad used to talk to my brothers and I and tell us not to get into this business, so we didn’t. We all had other jobs, but somehow we ended up back here. It’s hard work, but it has changed a lot for the better. “[Our company] was founded in 1961, but this facility wasn’t built until 1965. We’ve expanded twice since then, so we’re currently at about 11,000 to 12,000 square feet. We have nine full-time employees, not including my brothers [Jim and Thomas].” One of the many perks of being in business as long as Payne has is his ability to be able to rely on word of mouth from past customers to bring new customers into the shop. “We’ve been around for a long time and customers know the quality of work we do, and that attracts new people. This strategy has seemed to work, because we’re busy enough the way it is.” Their success as one of Racine’s leading collision repair facilities comes mainly due to their commitment to top-quality repair work, as well as their technicians’ extensive time in the field, with none of their employees having less than 10 years’ experience. “We’ve all been here for a really long time, and everyone here is very reliable and skilled in different areas. My brothers and I have been around a while; we were born into the business, but I can’t say that anyone is more important than anyone else.” As someone who has seen the industry evolve over time, Payne attributes technology as one of the biggest changes he’s witnessed during his tenure, and notes both the benefits and the drawbacks. “My biggest hope is that we can keep up with the technology. Everything is computerized now. I think just Fall 2017
WACTAL
Member
SPOTLIGHT by Michael Marino
The Uptown Auto Body Team
learning the programs is huge. In today’s world, you can’t have enough equipment. “I recently saw an Allstate commercial saying that you can now take a picture of your accident and send it to your insurance company. They make it seem like it’s a quick and easy process, but it’s actually a nightmare because you can’t always see all of the damages in a picture. Though another expansion isn’t in the works for Uptown Auto Body, Payne is hopeful for the future, and is particularly grateful to WACTAL for the camaraderie and support as a longtime member. “I joined the association around 1980. I think the thing I like the most is that we get to see other people’s problems and realize that we’re not alone. A lot of us deal with the same issues whether they be with customers or insurance companies. “Overall, I would like to see this industry change. I would love to see those body shop programs come back so that people can see how technical everything is, because this is the kind of training that gets people interested in this business.” WAN
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Talking
TECHNICAL
By Larry Montanez III, CDA
The Shocking Truth about Accountability NOTE: At the time of this writing, the now infamous John Eagle Collision Case was still awaiting a final decision. Technical contributor Larry Montanez dissected the trial deposition line by line, highlighting exactly where things went wrong for Boyce Willis and John Eagle Collision. However, on October 2, 2017, the Texas jury came to a decision. Members of the Dallas County jury found John Eagle Collision Center’s incorrect repair liable for 75 percent of the severity stemming from the 2010 Honda Fit crash, and awarded the Texas couple involved in the case $42 million. The jury attributed the remaining 25 percent of the damages to the other driver involved in the accident. Though a decision on the case has been made, Wisconsin Automotive News still considers the topics addressed in the article to be as relevant to the collision repair industry as ever. This widely publicized case has opened the eyes of repairers, insurers and drivers across the country, and has sparked countless debates about the ways cars are being repaired. The following article details the common misconceptions surrounding many collision repair practices, and provides unique insight into a widely talked about legal decision, which is just as crucial following the conclusion of the lawsuit. Some of the quotes included throughout the deposition have been edited and/or paraphrased for space and clarity. A complete transcript of the deposition is available at repairerdrivennews.com.
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ell, the industry is once again in a panic, and many are confused. Before you read this article, please watch the online news report found at tinyurl.com/y79vjlg8. Shocked? You should be. This case has brought out all kinds of opinions from the collision repair and insurance industries, and neither side are experts on the subject. The opinions presented and posted on social media range from a few well thought-out questions and observations to the most asinine statements ever made on collision damage and accident reconstruction. Some of the mathematics posted by some, such as the idea that two vehicles impacting each other at 75mph head-on produce 150mph of impact, are so incorrect it makes you ask, “Who ties your shoes in the morning?” The deposition of shop manager Boyce Willis was posted online though Repairer Driven News (repairerdrivennews.com). The comments and the statements on social media about Willis’ answers run the gamut from funny memes to light bashing to significant bashing – but is he really the rarity and just misinformed, or is he more the norm within this industry of ignorance? The following are some of his answers to deposition questions – along with my comments and commentary that will set the record straight. Kristen Felder (founder and owner of Collision Hub), Marc Gabbard (creator of the Facebook group Collision Repair Technicians United, or CRTU), Mike Anderson (Collision Advice) and I have mentioned many times on social media that there could eventually be significant injury and/or death of a vehicle occupant in a collision. We’ve also discussed the subsequent legal storm that could expose the liability of the repair facility and all employees involved who can be tied to a recent repair. One example found online is the story of a mechanic charged with manslaughter and reckless endangerment (“Liability: Where Do You Stand?” New England Automotive Report November 2015 – available at grecopublishing.com). Many on the CRTU group mention the idiotic excuses Willis stated; even after the situation was explained, these people were dead wrong or they fell on the proverbial sword excuse of, “I have a family to feed and can’t lose my job. I am only doing what I am told to do.” 12
Deposition OverviEW Since 2007, Willis has been the collision facility manager at John Eagle Collision in Dallas, TX. His answers in the testimony may be some of the most idiotic, misinformed ones we have ever read in a deposition, court testimony or any other transcripts from a legal proceeding. However, what made it so bad for him and for the collision repair industry in general, besides being a high-profile case, is that the OEM repair procedures and protocols were ignored and people were injured, which may or may not have been exacerbated by the incorrect repair procedures. Additionally, the lawyer in this case has mentioned he will be looking into other repairs made by the facility. Before I begin with the deposition overview (my comments are in blue italic), consider this: Unfortunately, history repeats itself, and the Nazis during the Nuremberg Trials attempted the same excuse as the one cited below. The final verdict and tally in those trials was 12 death sentences, three life in prison with no chance of parole sentences, two 20-year sentences, one 15-year sentence, one 10-year sentence and three acquittals due to improper police arrest procedures. What will the fallout of this case bring if John Eagle Collision is found guilty? Willis, the technician, the so-called consultant (who wrongly advised and either approved or convinced the facility to use incorrect and unapproved repair methods and materials) and even the facility owner could be sued civilly, and a case could be made for criminal negligence. What could this mean to the collision repair industry? It has been reported that the plaintiff lawyer (Mr. Tracy) plans to go after more repairers and more facilities. 1. From 1982 through 2007, Willis was a parts manager, but stated he has no actual collision repair experience, training or education. This is a common issue in the repair industry, where those chosen for managerial decisionmaking positions have little to no automotive repair knowledge and are more or less “number crunchers” who can manage people. In some cases, a lead decision-maker is a former technician who attempts to impose their own past experiences on repair decisions, which in many cases are incorrect or outdated. Regardless, it is always discovered that the OEM repair procedures were not referenced or utilized. 2. The powers that be at Eagle decided that Willis should be the corporate Fall 2017
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representative. In my opinion, they made a bad choice in two major areas. For starters, Willis is not educated enough on collision repair procedures, the state’s collision repair business rules and regulations, the state’s insurance rules and regulations and the state’s consumer protection laws and regulations for fair and equitable claims settlement practices and statutes. 3. It is obvious by the answers Willis provided that he was not prepared properly prior to the deposition. This evidence suggests the lawyer for Eagle was not prepared or trained for this type of case. Industry attorney Erica Eversman and I have worked together many times on many cases where we had to train the lawyers and witnesses on the facts as opposed to the myths, and where to find the facts. Remember: It is not about what you think in a lawsuit; it is about the law and the facts. The quote, “You are entitled to your own opinion, not your own facts,” has never been more accurate based on what we are seeing in this case. 4. Attorney Tracy asked Willis, “Do you agree, as the voice of John Eagle Collision Center, that when someone takes their vehicle to your certified body shop to be repaired after a vehicle collision or hail damage, people trust that the body repairs will be performed according to the vehicle manufacturer’s repair specifications? Willis answered; “Yes. According to the insurance company.” a. There are two major issues here with this answer. Obviously, “yes” is the correct answer, but “according to the insurance company” is the completely incorrect answer. b. Many states mention in the rules, regulations and/or laws for consumer protection, insurance or repair facility licensing that the repairer should have a fiduciary obligation to the consumer. Fiduciary is commonly defined as: A person to whom property or power is entrusted for the benefit of another,” or “Of, based on, or in the nature of trust and confidence, as in public affairs of the general public.” c. The insurance company only has three choices for claims settlements. One would be to pay for the value of the vehicle (i.e., total loss and pay the ACV). Another would be to pay for the repairs in monies or, thirdly, repair the vehicle themselves (which they cannot). d. The correct answer should have been, “Yes, as per the OEM repair procedures, protocols and materials as outlined in the repair manual information.” 5. Attorney Tracy asked: “Do you agree that if a certified body shop does not repair the vehicle to the vehicle manufacturer’s repair specifications, and then someone is seriously injured or killed because of a repair failure, that the body shop is responsible?” Willis answered: “Yes.” a. This would be correct. However, once again, the use of the word “certified” has now been stretched so far that it’s become ambiguous. In many cases, it is now thrown around without meaning. b. As I have written many times before, to be certified in the collision repair industry there must be a number of components. One is training – which would include online, self-study with testing, classroom with testing – and must include hands-on skill-based practical training and testing, as well as periodical on-site inspections without notice and annual or semi-annual training and testing to ensure the technicians’ knowledge and skills are up to the standards set by the particular OEM.
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6. Tracy asked: “If you don’t follow […] the manufacturer’s repair rules, and then someone’s injured or killed because those repair rules weren’t followed, you’re responsible for all the harms and losses, aren’t you, sir?” Willis answered: “To a certain extent.” a. This answer is correct and ambiguous enough to force more specific questions. 7. Tracy asked, “As a certified body shop for the OEM manufacturers, [you] will bring your vehicle back to the vehicle manufacturer’s repair specifications, correct?” Willis answered: “Or better, yes.” a. Uh-oh. Bad answer. It is just, “Yes.” How can anyone make it better than the manufacturer originally designed? Yes, an argument can be made for tested high- performance components, but what is given up for that additional performance? Drivability or longevity, in many cases. 8. Tracy asked, “And on Exhibit Number 18, John Eagle Collision Center installed a new high-strength steel roof on Mr. Scroggins’ 2010 Honda Fit in July 2012, correct?” Willis: “Can I interject?” Tracy: “Sure.” Willis: “That’s not a high-strength steel roof. It’s just a regular panel roof.” Tracy: “Okay. So that’s despite the fact that [the estimate] he had received was for a high-strength steel roof?” Willis: “The Honda does not make high-strength steel panels. You can call Honda, and they’ll tell you directly. There is no such thing as a high-strength steel panel. High-strength gets measured by tensile. And for it to be high-strength, it has to be 590. A panel roof, whether it be a hood or a door, are all 270.” Tracy: “And mega pascals for Advanced·High-Strength Steel (AHSS) is from 270 to 490. And then Ultra-High Strength Steel (UHSS) is anything above 570. Did you know that?” Willis: “No. I just talked to Honda, [the] Honda tech line, and they said the panels are not high-strength.” a. The roof panel is 270MPa/39,160psi which is classified as low-grade conventional High-Strength Steel (HSS). Willis is incorrect. Additionally, Willis answered “no” to processing knowledge of the UHSS of 570. He is not a metallurgist and should have said that is not his area of expertise. b. Tracy is incorrect on AHSS being 270MPa to 490MPa. It is actually classified in a range of 590MPa and higher; on most charts, it is listed as 590MPa to 1200MPa to 1500MPa. 9. Tracy asked, “When you say that it was a 3M 8115 product, is that because that’s what was customary within John Eagle Collision Center back in the 2012 time period?” Willis answered: “It is. It is an accepted repair alternative, based on our cars and insurance certifications.” a. Willis’ answer is not only incorrect, but ignorant, as there are no insurance certifications for collision repair. b. 3M 8115 is not an accepted repair alternative. There is no manual in the collision repair industry that is titled “Accepted Repair Alternative.” This thinking is generally due to incorrect statements made by instructors, technicians, “clown-sultants” or sales representatives in training classes, 13
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TalkingTECHNICAL repair workshops or in the facility itself. c. I have no idea or reasoning as to why Willis answered “based on our cars.” It makes no sense whatsoever. 10. Tracy asked: “And let’s have an agreement today that we don’t use the word insurance. Can we? Is that cool?” Willis: “Well, unfortunately we’re guided by insurance. So if you brought your car into my shop, right, the insurance company’s going to dictate what – how we’re going to repair your car.” a. Wow. Just wow. Willis shows his ignorance once again. The insurance company cannot dictate anything once they decide on the option to pay for repairs in monies. The insurer is not liable for what repairs the repair facility attempts or performs. They are not the repair professional. 11. Tracy asked, “I understand. But [you] are a certified body shop […] the insurance company cannot trump the OEM specifications, correct, sir?” Willis: “Yes, they can.” Tracy: “Where does it say that?” Willis: “By not paying the bill.” a. Do I need to point out Willis’ ignorance and delusions yet again? The insurer does not pay the repair facility on any customer’s repair. The insurer owes the insured or claimant the monies once liability is accepted. b. The insurance company can never “trump” or overrule the OEM specific repair protocols, procedures, position statements or required materials. 12. Tracy asked: “So don’t you have to have certain parameters [to be a certified body shop]?” Willis answered: “To be a certified body shop you have to be fully ICAR certified.” a. For someone in the collision repair industry for over 12 years, Willis is pretty misinformed about what I-CAR does. I-CAR does not certify anyone. Go look at their website or watch the Collision Hub video from the 2017 NACE Automechanika show in Chicago “What Does I-CAR Say” (tinyurl.com/yd29tpyw). I-CAR trains. Plus, the HONDA repair manual overrules anyone else’s opinion as to what should or should not be done on their vehicles. 13. Tracy asked: “When [technician] Mr. Figuereno decided to use adhesives. Tell me the name of any Honda Motor Company, Ltd. body repair document that authorized John Eagle Collision Center to use adhesive to glue a new roof back on a 2009-2013 Honda Fit?” Mr. Reese, defense attorney: “Objection; form. You can answer.” Willis: “There is no documentation.” a. Willis just confirmed they deviated from what the OEM (in this case, HONDA) requires for the replacement of the roof panel. 14. Tracy asked: “So, John Eagle Collision Center – they made a conscious decision to use adhesive to glue this roof in place?” Willis: “Yes.” Tracy: “And it was not a mistake?” Willis: “No.” Tracy: “It was not an error?” Willis: “No.” Tracy: “It was deliberate?” Willis: “Yes.” 14
Tracy: “And it says – under “Warning” – what does that say – that’s highlighted?” Willis: “You can be killed or seriously hurt if you don’t follow instructions.” Tracy: “And this is – this is John Eagle’s Bible that they have to follow, right?” Willis answered: “Yes.” Tracy: “This is [the] OEM, Honda Motor Company, Ltd., […] telling John Eagle, you better follow this, right?” Willis: “Well, they don’t tell you, you better follow it, but it’s – it’s a guide to repairing a car.” Tracy: “It’s the – it’s the body repair Bible, right?” Mr. Reese: “Objection to form.” Willis: “Supposedly, yes.” a. So, let’s recap. Willis admitted under oath that they deviated from the HONDA repair procedures. They made a deliberate and conscious decision to not follow the HONDA procedures. b. Willis admits, “You can be killed or seriously hurt if you don’t follow instructions.” c. Willis states that the HONDA repair manual is a guide to repairing the vehicle (go look up the definition of a guide). When Tracy likened the repair manual to the body repair Bible, Willis answered: “Supposedly, yes.” So, Willis does understand that the repair manual is the Bible to repairing a specific vehicle, but also states it is a guide. Wow. I wonder if he will run for government office with that flip-flop attitude. 15. Tracy asked: “All right. Did Ignacio “Nacho” Figuereno know about Exhibit 202?” Willis answered: “He has – he has access to it.” Tracy: “Where do you have access to it?” Willis: “Through the parts department.” a. Through the parts department? This is another issue plaguing the collision repair industry. Why don’t the technicians have their own access to look up the repair procedures and protocols? Relying on the parts department to obtain the proper information is negligent, unnecessary and unproductive. 16. Tracy asked: “And part of your job as a certified repair facility is to make certain that your repairs meet or exceed the manufacturer’s recommended repair methods so that their vehicles can continue to meet the standards, correct?” Willis: “I agree.” a. Willis agrees that as a certified repair facility, they are to make certain to meet the manufacturer’s repair methods, but still made a conscious and deliberate decision to deviate from the HONDA repair procedures. 17. Tracy asked: “It’s easy to get access to this repair manual as a certified shop?” Willis: “Yes.” Tracy: “In fact, you plug in techinfo.honda.com. Did you know that?” Willis: “No. I go to the parts department.” Tracy: “You just go to the parts department?” Willis: “Yeah.” Tracy: “And did you know as a certified body shop facility that they can plug that website in and it will ask you what vehicle you need information on?” Willis: “Yes.” Tracy: “That’s not surprising, right?” Willis: “No.” Tracy: “And, in fact, it will tell you various updates on, you know, on our repair manual; did you know that?” Fall 2017
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Willis: “Yes.” Tracy: “And it will also give you information about body repair news; did you know that?” Willis: “Yes.” a. Obviously, based on the answers from Willis to the above questions, he has knowledge of the HONDA tech info website and what information is provided within the site, but he still ignores the access and goes to the parts department to ask for information. Maybe they should have gone to McDonald’s or Starbucks for the information? 18. Tracy asked: “Is the 3M 8115 an approved item?” Willis: “No.” Tracy: “Well, who approved it for use on Honda vehicles? Who approved 3M 8115 for use on Honda vehicles, specifically the 2009-2013 Honda Fit? Who approved it?” Willis: “Are you talking about as a manufacturer or…” Tracy: “At the collision center. Because no one at Honda has approved the 3M 8115 product to be used.” Willis: “That would be the collision center.” Tracy: “Who at the collision center approved it? Who did that?” Willis answered: “Back in 2012, it would have been Brian Cunningham.” Tracy: “Brian Cunningham. And what was his job title?” Willis: “He was actually put in over me for a short period of time.” Tracy: “And what was his job title?” Willis: “Director.” Tracy: “He came over you despite the fact that you were the director of the body shop. He came over you and you sort of…” Willis: “He’s kind of like a consultant-type of deal.” a. So once again, Willis admits that 3M 8115 bonding adhesive is not an approved repair procedure to install the HONDA roof panel, but admits to ignoring the warning that it is not approved and used it anyway. b. Willis also admits to taking the advice of a so-called consultant, Cunningham. I am sure you are all like me and cannot wait to hear what Cunningham has to say. 19. Tracy asked: “How long was he with John Eagle Collision or John Eagle Collision Center?” Willis answered: “Probably, say, two and a half years, I think.” a. Willis states Cunningham was there for two and half years. I wonder how many other vehicle repairs were altered due to a deliberate and conscious decision to ignore the OEM-required repair procedures and protocols in that two-and-a-half-year period – and even after that time to present.
range from some of the idiotic answers from Willis to “I have a wife and kids to feed and I need to put money on the table,” “I will lose my DRP,” “They won’t pay for that” or “I will lose my customers if I charge them or make them sue.” The sad truth is that most consumers, insurance company personnel and even the collision repair facility employees have all been conditioned into thinking it is the shop’s fault, and the shop is the bad guy for everything in the industry. I will leave you with this closing thought. For a moment, consider this scenario and think about it. If the answer comes to you, then you get it. If the answer is not crystal clear, then you do not get it and never will, so I recommend you hire a lawyer. A man, let’s call him John, was injured at work. He was hit in the head by a falling blunt object. He was not knocked unconscious, but did feel dizzy and lightheaded. A large bruise and lump were visible. John went to his doctor and had x-rays, an MRI and sonogram taken. John gave his insurance information, paid his co-pay and went home. About two months later, John received two letters in the mail. One was from his doctor and the other one from his insurance company. The insurance company letter stated that they will not be paying for the sonogram as it is not usual and customary for this procedure. The letter further explained that the insurance company got the doctor to lower the charges from $1,200 to the rate the insurance company pays for sonograms, which was $850. John opened the letter from the doctor and it stated that his insurance company deemed the sonogram unnecessary, and John owed the doctor $850 (which was discounted). He had 30 days to pay before it goes to a collection agency. Now a few questions for you to answer and think about. (Don’t worry, they are multiple choice.) 1. Who is John mad at? a. Himself b. His Boss c. The Doctor d. The Insurance Company 2. Did the doctor offer any assistance (besides the discount) to John? a. Yes b. No 3. Will John go back to that doctor if he is ever in need again, even though he was charged personally for services rendered? a. Yes b. No 4. What would you do? a. Not pay b. Pay c. Sue d. Protest Read it again if necessary. Do you get it now? Do you see the error of your ways? As always, feel free to contact me with any questions you might have.
Conclusion Some of you might be thinking, “WOW. REALLY? Can anyone be that misinformed?” The sad truth and very harsh reality is that a lot of shop management, estimators and ownership think this way. This is especially true with the more corporate-type facilities – with the suits and ties running the show – and even those facilities that are on DRPs. The lies, deceptions and myths resonating within the collision repair industry are out of control, and the uninformed consumer is the one who is put at risk. This Honda Fit case is just the tip of the iceberg. There will be more to come just like it, and many shops will be put under the microscope with little to no defense. Too many shops are only concerned with numbers, such as their KPIs, gross profit, average touch time, cycle time, days to repair, efficiency percentage and a few other catchphrases. Conversely, research shows that the more a shop is concerned about those numbers, the more likely repairs are performed incorrectly. Excuses Fall 2017
Larry Montanez, CDA is co-owner of P&L Consultants with Peter Pratti Jr. P&L Consultants works with collision repair shops on estimating, production and proper repair procedures. P&L conducts repair workshops on MIG & Resistance Welding, Measuring for Estimating and Advanced Estimating Skills. P&L also conducts investigations for insurers and repair shops for improper repairs, collision reparability and estimating issues. Larry is ISO 9606-2 Certified for Audi and Mercedes-Benz and is a certified technician for multiple OEM Collision Repair Programs. P&L can be reached by contacting Larry at (718) 891-4018 (office), (917) 860-3588 (cell) or info@PnLEstimology.com.
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Ask
MIKE
How can OEM-certified shops balance their obligations to the manufacturers while also dealing with insurers? In our newest feature, we at Wisconsin Automotive News “ASK MIKE” to explore how OEM-certified facilities can follow automakers’ guidelines while also receiving suitable compensation from insurers. We 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. Wisconsin Automotive News: Mike, here’s a question we’re hearing a lot these days. How can OEM-certified shops balance their obligations to the manufacturers while also dealing with insurers?
Mike Anderson: The first thing is we have to understand that we can’t be reliant upon position statements. It’s great that the OEMs provide position statements; it certainly is helpful, and I don’t want to make light of that. But at the end of the day, the repair procedures are king. We have to be able to research the OEM repair procedures and have those as our documentation. For example, it’s good to have a bulletin from Chrysler that says we need to scan vehicles, but if I’m replacing a door on a Chrysler vehicle and I see in the door section of the procedures that I need to recalibrate something, then that’s an even stronger statement. We actually have to do that strictly for that specific vehicle and document our case. When you want to get paid from an insurer, your opinion doesn’t mean jack. If we rely on our opinion, the outcome is not going to be very good. We need to stick to the facts. The facts can be found in these four questions: Is what we’re asking for required?
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When you’re looking to repair a vehicle and you’re an OEM-certified shop – and even if you’re not – you want to be repairing it to the OEM standards. Therefore, we stick to those four questions above. We need to have all that documentation ready in advance so that we can provide it to the insurer when they come out. Obviously, there may be some OEMs that you’re doing work for that have other guidelines besides labor times. It might be something like Is it included in any other labor aftermarket parts; maybe you have an OEM operations? How can we prove that certification that says you can’t use them. something’s not included? Obviously, we can use the P-Page documentation direct Maybe you have OEM information that says in order to be certified, you have to mount the from the estimating systems, or we can vehicle on a specific frame machine that is submit a question to the DEG website – degweb.org and they will provide us with more labor-intensive than whatever your normal an answer that says, ‘This is not included.’ frame rack is. At the end of the day, we need to realize that when a customer drops their car off with Is there a pre-determined time? Again, we either look it up in the estimating us, the contract is between us and that customer; it is not between us and the system or submit an inquiry to the DEG. insurance carrier. Therefore, if an insurance That’s the basis for what we should be company refuses to pay for something that is a reimbursed, and we remove our opinion safety issue, that doesn’t remove us from the from it and stick to factual information. liability. Obviously, you want to approach this in What is it worth? How do we determine a professional manner by providing all the documentation required – and, again, always this? In some cases, it may be a product have it there in advance. Also, make sure you like seam sealer where we just submit an use the correct terminology for the procedures invoice. It could be that it’s a labor included on your estimate. One more thing that operation that is not in a database, and maybe we need to submit an inquiry to the is extremely important is to use good line notes; DEG and get the Information Providers to you might have a desk auditor who’s actually come up with a labor time. Maybe we just looking at your estimate. There are other things to consider. For need to do our own time, keeping in mind that a time should be how long it takes the example, let’s say that a customer or an insurer average technician to gather up their tools, doesn’t want to pay for scanning the vehicle. You still have to do it. That’s where we go back equipment and supplies and perform the to the business decisions we mentioned in a task in a safe and proper manner before returning everything back to its appropriate previous issue of Hammer & Dolly [“Ask Mike: What Do I Do When an Insurer Won’t Pay Me storage place.
We have to be prepared to provide documentation if what we’re asking for is required. There are several ways to provide that information. One is the OEMs’ documentation. Another might be that we scan the vehicle, and now we have a scan report. Another way might be that we have a paint manufacturer’s bulletin.
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for What I Want or Need?” H&D April 2017]. You can choose to involve the customer, charge the customer, do the work for free, go up the chain of command, et cetera. I won’t say that a lot of the issues I see shops encountering are easily resolved, but they are also not insurmountable obstacles to overcome. Just being prepared and having the specific OEM information – and not just a position statement – will make a huge difference. WAN
changed. However, State Farm now has the upper hand, in that they refuse to cover the difference in price, and instead are telling their customers to go to one of their network shops, effectively steering business away from the shops involved. The 19th Judicial Circuit Court of Lake County, IL dismissed the lawsuit twice, but on June 9, agreed to move forward with the case on counts of breach of contract and tortious interference (steering). One of the biggest struggles in this legal process for Novoselsky has been overcoming State Farm’s attempts to dismiss the lawsuit. Since it was determined there is a legal cause of action to proceed, Novoselsky and the body shops now have to prove that their claims are true. WAN A status hearing for the case has been scheduled for November 17.
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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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