Tuesday, 28 February 2006 17:00

Industry pros debate need for part certification at hearing

Battle lines are being drawn in California over Assembly Bill 1852, a measure that would have the effect of legally sanctioning certified aftermarket crash parts by declaring that, once certified, they are of like kind and quality to OEM. Such sanctioning would presumably cut off consumers from taking legal action against their insurers for mandating the use of aftermarket parts in collision repairs. 

Sponsored by the Certified Automotive Parts Association (CAPA), the bill would set up state licensing for an entity - such as CAPA - that would test and certify the aftermarket parts.

At a hearing of the California Assembly Business and Professions Committee, select panels of collision repairers, insurers and aftermarket parts distributors, along with representatives of the Bureau of Automotive Repair (BAR) and the Depart-ment of Insurance (DOI) expressed their opinions about the need - or lack thereof- for such legislation.

The most colorful statements came during public comments near the end of the three-and-a-half hour hearing. Gene Crozat, owner of G & C Auto Body, a large Santa Rosa-based operation, summed up what witnesses had been saying all day long - that there is a need for parts that are less expensive than those provided by the OEMs, but cheap parts that don't fit are not acceptable.

"OEM crash parts," decried Crozat, "are a rip-off at best. However, they do fit." He indicated that insurance companies should be angry about the prices they pay for parts. He continued, "Aftermarket parts simply are not the same as OEM, and CAPA is serving itself here trying to sell you that they are the same quality as the manufacturers' parts. We are not against aftermarket parts per se. We use aftermarket parts all the time that have a proven track record for reliability. The bottom line is that we do not want to be forced to use aftermarket parts that do not fit.

"This whole bill is deceptive and whoever wrote it should be flogged."

Not our fault

Prior to Crozat's comments, BAR representative Richard Mundy reported that limited testing found that OEM crash parts fit about 75% of the time, while non-OEM parts fit only 20% of the time, acknowledging that only the element of quality fit was tested. He explained that the BAR's only current responsibility regarding crash parts was the consumer's need to know the type of parts that were being used in a repair.

The insurer side

John Bierer from 21st Century and the Personal Insurance Federation of California (BIFC) explained that currently only new or recycled OEM crash parts are used by his company. In April, however, the company will begin to authorize alternative crash parts, determined on a case-by-case basis. "Our main goal is to accommodate our customers," Bierer said.

Robert Hurns, vice president of the Property Casualty Insurers Association of America (PCI), addressed the consumers' responsibility to understand the terms of their policies. Also representing the Association of California Insurance Companies (ACIC) and an advisor to CAPA, Hurn recommended that consumers shop around for the right insurance policy, so if they don't want aftermarket parts used, do business with an insurer that only installs OEM crash parts.

He further pointed out that CAPA's quality standards has caused the artificially high prices charged by the OEMs for crash parts to be reduced.

For the aftermarket

Representing both the Auto Body Parts Association (ABPA) and her employer, Keystone Automotive Industries, Eileen Sottile testified about the benefits of aftermarket parts being more available and affordable. Aftermarket parts prevent a vehicle from being totaled, she said, which is especially important to a consumer who owes more than the vehicle is worth - a common situation today. She reiterated that competition is instrumental in keeping prices down.

Sottile also talked about Keystone's efforts to provide outstanding customer service with daily delivery of parts, liberal return policies, and occasionally reimbursement for parts to make the customer whole. She noted that Keystone has their own brand name, Platinum Plus, adding also that Keystone offers warranties that often exceed those of the automobile manufacturers.

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Collision repairers tell their side

Ted Stein, collision repair manager for Drew Ford of San Diego, addressed the fact that consumers are more conscious than ever of the quality of sheet metal parts. Said Stein, who also represented CAA, "Our repair process does not allow for us to use parts that do not fit. Our repair process is like an assembly line. With aftermarket parts, we have to add another step called 'seeing if the part fits' which adversely affects cycle time. We need dependable, reliable parts that perform every time." He showed an example of aftermarket parts packaging versus OEM packaging, pointing out that parts can be distorted if they are not handled correctly or packaged right.

"My customers expect body lines to line up and I can't come up short on that. I have not had to return an OEM part to the manufacturer in the last five years," he asserted. "Furthermore, the price of the part is not always the most relevant element. In our business, we turn and earn."

Also representing CAA was Don Feeley, Jr., of City Body & Frame in Riverside. Feeley also serves as chairman of CAPA's technical review committee and has traveled repeatedly to Taiwan to see the factories where the parts are made. He summed up his point of view succinctly: "Choice is the big issue here. Our customers deserve high quality parts regardless of who produces them. They need to be readily available, provide safety, quality and be economical as well. I have on occasion had to return parts to the OEMs as well as the aftermarket distributors."

He continued, "When you purchase a steak knife, you don't expect it to work 75% of the time at best and 20% of the time at worst. That is simply not acceptable."

Chairman asks about safety

The Assembly committee chairman, Assemblywoman Gloria Negrete McLeod (Democrat, Chino), questioned the panelists on the safety of aftermarket parts. With the exception of hoods (which are subject to federal standards), panelists concurred that there were no safety ramifications connected with aftermarket parts.

Automobile manufacturers

Gene Erbin of the Alliance of Automobile Manufacturers, Brian Rogas of Daimler-Chrysler and Michael Cammisa from the Association of International Automobile Manufacturers, all concurred that no further regulations were necessary and that the existing law in the state of California is adequate. According to the law, consumers must be notified beforehand whether a repair will involve OEM or non-OEM parts. If an insurer compels non-OEM parts, it must provide a warranty of like kind and quality, they said. Safety is implicated in the existing California law.

They noted that in certain situations, OEM parts are a must. For resale purposes, some consumers insist that for a Ford to remain a Ford, it must be repaired with Ford parts. In lease agreements, the lessor requires the lessee to use OEM parts.

"We believe that existing law balances the competing interests today of the body shops, consumers, parts manufacturers and insurers. Consumers are savvy enough to know that non-OEM parts are not the same. There is resentment that California would elevate aftermarket parts to the level of OEM crash parts," Erbin offered.

CAPA chimes in

CAPA Executive Director Jack Gillis spoke to the committee, justifying CAPA's interest in sponsorship of the bill. "This issue is not about insurance companies. This issue is about ensuring that consumers have access to fairly priced, high quality alternatives to expensive car company brand parts."

Gillis further explained that "California consumers face a collision repair marketplace that lacks competition because 80% of the parts needed to repair vehicles are only available from the car companies. In the last two years alone, Californians have overpaid for parts by more than $120 million due to the lack of competition and monopolistic pricing practices of car companies."

Watch the whole hearing

To view the full hearing, go to www.calchannel.com. Fill in the date: 012106, then select Assembly, informational hearing.

 

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