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Monday, 28 February 2005 17:00

Spirited group discusses industry issues at CIC in Vegas

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Two of the country's largest suppliers of re-manufactured alloy wheels say they support the development of industry standards for such wheels. Speaking at the Collision Industry Conference (CIC) in Las Vegas, Nevada, in November, Roger McClellan, vice president of sales and marketing for Transwheel Corp., said his company believes such standards are an "effective way to promote the industry and ensure the safety and satisfaction of consumers."

Need standards for wheels

Charlie Hogarty, the former CEO of Keystone Automotive who now serves as a consultant to the company, agreed. "We also believe that standards could be set that would as-sure the shops they were getting wheels from a manufacturer that met all safety standards," Hogarty said. "We have concerns that there are too many low-end operators who don't operate to that standard and have a negative impact on our business - and [the shop's] business - when they repair wheels that really should be scrapped."

Hogarty's and McClellan's comments came during a CIC panel discussion that resulted from concerns raised earlier in the year by New Jersey shop owner Joe Lubrano. He said he has received re- manufactured wheels that he did not feel would be safe to use; indeed, one such wheel failed, although the tire developed a slow leak rather than a blowout. He said the lack of standards for the re-manufacturing of wheels results in added liability for the shop.

"I had an attorney draw up a 'hold harmless agreement,' so that if we use a [re-manufactured] wheel at the shop, either the insurer or the supplier has to be responsible for the liability and hold us exempt," Lubrano said. "No one has ever wanted to sign it. They always want us to accept the liability. If they were willing to accept that liability for their product, that would say quite a bit. But since they won't, that says something else."

Hogarty said such concerns are a key reason shops should buy from reputable suppliers who carry adequate product liability insurance. "In the event of a suit, it's not the shop that will have the deepest pocket," Hogarty said.

Similar standards to those for new wheels

Another participant on the panel, Ken Archibald of Independent Test Services, said his company has conducted wheel testing for the automakers, aftermarket wheel manufacturers, and wheel re-manufacturers. He said the Society of Automotive Engineers (SAE) has developed industry standards for both OEM and non-OEM wheels, and that similar standards could be developed for re-manufactured wheels provided the suppliers of such wheels are willing to participate in the process.

He said such standards would likely include permanent labeling of the re-manufactured wheels, and would be enforced just as those for new wheels: through regular independent inspections of wheel re-manufacturers processes and products.

Virtually all of the automakers caution against the use of re-manufactured wheels. Ford Motor Company, for example, earlier this year issued updated guidance on wheel recycling, saying it does not approve the use of such wheels if the re-manufacturing process involves "re-machining, re-plating, welding, bending, straightening, reforming or adding new material other than cosmetic coatings."

"They all say don't use them, and all of their dealers use them," Archibald said of the automakers. "It's a matter of what the parent wants and what the child does."

Concerns with ADP estimating system

Also at CIC in Las Vegas, the CIC Estimating Committee tackled a long-standing but complex issue regarding the ADP estimating system. In some instances, ADP's system results in structural or mechanical operations being in-corporated within a body operation. Installing a radiator support, for example, may involve removing and reinstalling the condenser, a mechanical operation.

ADP's system, however, often includes this operation as part of its radiator support body operation. The labor allowance is often higher than CCC's or Mitchell's because it includes the condenser operation. However, with either CCC or Mitchell, the repairer may specify a mechanical rate for the condenser operation.

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March Taylor, co-chairman of the Estimating Committee, said ADP provided a written response to the committee's inquiry offering a four-step process a shop can use to separate out the operations at different rates.

"I've read this explanation, these four bullet points, several times and I still don't get it," Taylor said. "It's a very labor intensive process."

Even if a shop used the process, Taylor said, the "custom manual entries" on the estimate that the process involves would likely "raise a lot of flags" as the estimate was audited. He said this is an issue the CIC committee would continue to pursue.

"ADP has said they are going to go back to their review committee to try to make changes where the program automatically adjusts for these multiple types of labor operations," Taylor said.

Other news, discussions at CIC

Also at CIC in Las Vegas:

• The CIC Definitions Committee completed work on its biennial update to the CIC definition of a "Class A" collision repair facility. The revised definition can be found at www.ciclink.com.

• During the CIC Legislative Committee report, Stephen Regan of the Massachusetts Auto Body Association, discussed connections between the work of various committees at CIC and legislative and regulatory actions in states around the country. CIC's definition of a "Class A" shop, for example, has been used in some areas that have developed shop licensing programs. Regan also pointed to the work of the CIC Cycle Time Task Force, which conducted studies showing that cost-savings from using non-OEM or salvage parts can be offset by the negative effect that attempts to use such parts can have on cycle time.

"Massachusetts had a regulation that required you to use the lowest-priced part if you were going to replace a part rather than repair it," Regan said. "The lowest-priced part is not always the most cost-effective. That was the position brought about by CIC and used by the Massachusetts Auto Body Association to convince not only the Massachusetts Division of Insurance but also to obtain support from some of the insurance companies, who testified in favor of a change. That CIC committee's efforts directly resulted in changing that regulation in Massachusetts. What you are doing here does count and your effort is well-spent."

• Roger Wright of AIG was honored for completing his second year as chairman of CIC. Wright, who worked for the CARSTAR organization when he was named chairman in late 2002, said he has been attending CIC since 1986 and will continue to do so. He said he looks forward to working with next year's chairman, Rick Tuuri, vice president of business development and field operations for I-CAR.

Tuuri, who joined I-CAR in 2003 after 24 years with ADP, said he considers chairing CIC "an honor, a privilege and a responsibility." He said that at the CIC planning meeting in January, he would like to see CIC participants develop a "vision" for CIC. He said the founder of Sony, for example, had a vision of anyone being able to listen to any music they wanted at any time and anywhere.

"He didn't have a vision about Sony. He had a vision of what the world looked like when he was finished," Tuuri said, saying a vision could similarly drive CIC activities. "I would suggest to you that we adopt a vision statement and then start to measure what we do and how we do it against that vision to make sure we are on track to make this industry look like what we want it to look like."

The next CIC meeting will be held January 12-14 in San Antonio, Texas

John Yoswick is a freelance writer based in Portland, Oregon, who has beenwriting about the automotive industry since 1988.

 

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