Saturday, 31 December 2005 17:00

What the collision industry was talking about in 2005

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Concerns about the estimating databases, the reversal of the decision in the State Farm non-OEM parts lawsuit, the collapse of another consolidator and an ongoing battle over the "right to repair" were among the most talked-about topics in the collision industry this past year.

Here's a quick overview of the past year as viewed through a collection of some of the most memorable, important, interesting or enlightening quotes heard around the industry during 2005.

Guessing with the estimating systems

"The ADP issue caused problems across the industry for insurers, repairers and consumers. To try to stop that from happening again, we'd like to sit down with the information providers and figure out a better way to make sure there's full disclosure of any changes that come forward with any new CDs. This is one of the few times that we've worked collectively. We feel we can offer a better solution to the industry if we work collectively on this than if we worked individually."

- Lou DiLisio, at the time the chairman of the Society of Collision Repair Specialists (SCRS), announcing in January that SCRS, the Alliance of Automotive Service Professionals (AASP), and the Automotive Service Association (ASA), were jointly forming a taskforce to work on "macro issues related to the way the [estimating] database companies operate."

"We do want to assert our influence and get certain changes made, and some of those match up with insurers. In cooperation with them, we can have that much more influence to [push for] the changes that we're looking for. Obviously our primary focus is going to be protecting our members, the repairers, but there are, in many cases, good reasons for a cooperative effort with insurers."

- Darrell Amberson, a member of the multi-association database taskforce, explaining why insurers are being included in the taskforce's efforts.

Unwelcome guests

"Why would you want the insurers in there? These are our issues. Insurers al-ready have a huge influence over the database providers. I respect the insurers. They are people making a living…But this [task force] is the one opportunity where you have [the database providers'] attention and you have the power and you give it away. Shame on you."

- Sheila Loftus, executive director of the Washington (D.C.) Washington Metropolitan Auto Body Association, criticizing the national associations for including insurers on the database taskforce.

"We have some common issues [with insurers]. Disclosure [of changes made to the databases] happens to be one of those issues. The insurers are just as much looking for disclosure as the repair industry is. They've got people on their staff that do nothing but look through the databases to find out what was changed. You haven't known us to lay down yet, Sheila. We're not about to now."

- SCRS' DiLisio, responding to Loftus.

"Going forward, users will only be able to select panel bonding as an alternative to welding for those procedures where the OEM has explicitly approved the use of adhesive as a valid, alternative repair method."

- Tom Fleming of Mitchell International, announcing that in part due to feedback from the database taskforce, his company was reversing a change it had made to its database that allowed the user to select adhesive bonding labor allowances for many cosmetic panels even if the automaker had not endorsed panel bonding for that operation.

Hurricane relief efforts

"We have in place now the beginnings of what will be the Red Cross of the collision industry. If there is another hurricane or an earthquake that hits or whatever it may be that displaces people in this industry, I think we will have in place a vehicle that can help them in the future, so we can take care of our own, just as your family would take care of you if something happened to you."

- Chuck Sulkala, executive director of the National Auto Body Council (NABC), on that organization's relief effort for those impacted by this year's hurricanes.

"We've never had vehicles coming out of that type of toxic soup, which presents unique biological hazards to our [shop] personnel."

- Rod Enlow of the Coordinating Committee For Automotive Repair (CCAR) on the publication of his organization's recommended safety procedures (www.ccar-greenlink.org) for anyone coming into contact with the estimated 150,000-300,000 vehicles that were partially or fully submerged in New Orleans.

End of the world

"Cockroaches, and somebody walking around saying, 'What are we going to do about feather, prime and block?'"

- State Farm's George Avery, joking about the two things that would be left if the world were to end, during an ongoing effort at the Collision Industry Conference to define "where body work ends and paint work begins."

Check IDs

"Point-of-sale restrictions [on paint products] are something we've heard a lot about. The paint distributor, just like a bartender, should be asking for certification. They should not be selling it unless they see a certification."

- Kim Teal, an EPA Environmental Protection Specialist, on plans to include limits on the sale and use of automotive refinish products in new federal air quality guidelines her agency is expected to propose in 2007.

Throw-away vehicles

"Some of the best and brightest in this industry say we're moving so fast toward throw-away vehicles that it isn't even funny…If this trend continues, I'm of the opinion that the problem of the escalating number of totals should be top priority for all of us."

- Lee Petersen, manager of insurance and automotive industry affairs for Chief Automotive Systems, on the rising percentage of vehicles being declared total losses.

"Vehicles may tend to be moved to the salvage yard prematurely. It's kind of pre- determined that the vehicle is going to be a total loss before someone even has a chance to visually inspect it."

- Eric Burr, vice president of industry relations for Mitchell International, speaking of some insurers' "over-reliance" on "predictive modeling" that sends some vehicles directly to a salvage facility rather than a shop based on information about the vehicle provided by the owner over the phone.

Helping hand

"There's no more satisfaction that any human being can have than to see what your cont

ributions and your support have done to help these kids. I don't believe there's a soul in this room that could be there for more than 20 minutes and not get a tear in their eye."

- Marco Grossi of the Collision Craftsman chain of shops in Michigan, speaking of the industry's efforts to help Camp Mak-A-Dream, a Montana camp for children and young adults actively battling cancer. The NABC in 2005 raised $130,000 to buy a new bus for the camp.

Surprise guest

"Unfortunately, I've learned a little too much about collisions myself this season."

- NASCAR's Jeff Gordon, in a surprise appearance at the 2005 NACE opening session.

Sign language

"This repair shop has an agreement to provide an insurance company with discounted prices or a limit on the scope of work performed in exchange for the insurance company's referring work to this repair shop."

- Wording of a proposed sign shops in direct repair programs would have had to post under legislation considered - but not passed - in Oregon in 2005.

Re-keying revisited

"Collision repairers are forced to spend a ridiculous amount of time rekeying data that could easily be transmitted to them electronically. This is a needless waste of resources, and a cost that this industry should no longer bear."

-Barbara Crest, executive director of the Portland-based Northwest Automotive Trades Association, in joining more than a dozen regional and national trade associations voicing support for two-way communication between shops and insurers that would allow shops using the same estimating system as the insurer to receive insurer-prepared estimates electronically.

"My assumption is since every other software in the world allows me to do this, that it's more likely more difficult for you to keep me from doing that than it is to let me do it, other than you can't [figure out a way to] charge me for it."

- Craig Griffin of Laney's Collision Center in El Dorado, Arkansas, criticizing CCC Information Services for announcing that it does not plan to allow a user to place a copy of an estimate on a disk or drive for easy transfer to another user, eliminating the need for the second user to rekey the estimate data.

Autobody Olympics

"WorldSkills takes place every two years. This is the Olympics for our industry's future craftsmen. I don't know how many children were inspired to become gymnasts when they saw Mary Lou Retton win a gold, but I hope the same thing happens when the U.S. WorldSkills team returns, having presented themselves admirably."

- Teresa Bolton of ASE who led a successful effort to raise funds to send two U.S. competitors to the collision repair competition in Helsinki, Finland.

Problem solved?

"…it is no more fraudulent - in and of itself - to specify non-OEM parts while knowing that they are not as good as OEM parts than it is to sell Chevrolet automobiles while knowing that they are not as good as Cadillacs... Under plaintiffs' reasoning, it would appear that to avoid liability under the (Consumer Fraud Act), every knowing sale of a brand of product which is not the top brand would have to carry a disclaimer: 'Notice: Our brand is not, on the whole, as good as our competitor's.'"

- from the Illinois Supreme Court decision reversing the $1 billion judgment against State Farm related to non-OEM parts in the 1999 Avery vs. State Farm class action lawsuit.

"We are very pleased that the Illinois Supreme Court concluded that State Farm's actions were correct. As with all types of consumer products, the public benefits from open competition in the replacement parts business."

- Dick Luedke, a spokesperson for State Farm, on the Illinois Supreme Court decision in the Avery vs. State Farm non-OEM parts lawsuit.

"This case did not resolve the problems collision repairers face day-to-day with parts that don't meet the standards we demand, along with pressure to use certain parts we feel are substandard. Until we reach a point where the consumer is informed about the type of parts used in the repair and enabled to choose whether it's aftermarket, OEM or recycled, the parts issue will continue to be of concern."

- NACE Chairman Geralynn Kottschade, speaking of the reversal of the decision in the State Farm non-OEM parts case.

Right to repair

"I look forward to reintroducing this legislation that will give motoring consumers the ability to choose where, how and by whom to have their vehicles repaired, maintained and serviced and to choose whose vehicle parts they wish to purchase."

- U.S. Rep. Edolphus Towns (D-NY), on the proposed "Motor Vehicle Owners' Right to Repair Act" he reintroduced in 2005.

"ASA's service information agreement with the automakers is working, and the voluntary approach is much more effective than a process regulated by the federal government in Washington, D.C."

- ASA's Ron Pyle on his association's opposition to the "Right to Repair" legislation.

"The bill was never intended to steal the car company proprietary information, as opponents continually allege; however, the language changes should help provide the car companies with the confidence that they will only be required to provide the information and tool capabilities that they had committed to in their September 2001 letter to Congress. Passage of this legislation will ensure that the car company promises to make information available are actual commitments over the long term."

- Kathleen Schmatz, president and CEO of the Automotive Aftermarket Industry Association (AAIA), on the "Right to Repair" legislation.

"ASA's first priority was to solve a problem. Through the cooperation of the automobile manufacturers, it has been solved. Now we have a responsibility to uphold ASA's word: that successful implementation of the agreement would make the pending and any future legislation unnecessary. Remaining true to our word and maintaining the trust we've established with the automakers, we must oppose the legislation."

- Kottschade, past national chairman of ASA, on the association's decision to oppose "Right to Repair" legislation.

Association promotion

"There are people working on behalf of you every day. So when that [association] dues statement shows up, you might want to think about whether it's worth putting the money out there to have somebody working on your behalf. You have insurance on your car, insurance on your home, insurance for your business. You want to cover yourself in the event of a loss. Well, there's a lot of things that could change the way you do business on a daily basis and have an impact on your bottom line. What's your insurance for that? Your insurance is your state association, and national associations like SCRS. You pay your few hundred dollars a year to know you have people working on your behalf. It's cheap insurance."

- Dan Risley, executive director of SCRS.

Airbags direct

"Obviously, I don't want to cost our customers any money, but I was told real plain and simple that they (Farmers Insurance) are going to save money on airbags, and if I don't want to play, they'll find somebody who does."

- Bruce Young, parts manager for Delray Lincoln-Mercury in Delray Beach, Fla., on his decision to participate in a test program - which has been halted at least temporarily - in which Farmers' would buy airbags directly from the dealership for use by the insurer's direct repair shops in the Midwest.

"This shouldn't become accepted practice in our industry. We need to get back to the basics of fixing vehicles correctly, quickly and efficiently, while working with the insurers to reduce costs and provide excellent customer service. This is a monumental issue our industry needs to address immediately."

- Mike Schoonover, owner of Schoonover Bodyworks Inc., in St. Paul, Minn., about Farmers' plan to purchase airbags directly.

Can't stand alone

"From my understanding, you're pretty much at the dealer's mercy."

- Mike Kukavica, a California-based collision repair instructor for Mercedes- Benz, on an independent shop's vulnerability after achieving OEM shop certification because that certification is dependent on a local dealer's sponsorship of the independent shop.

Non-deployed airbags

"A body shop that chooses to use [non-deployed] airbags and subsequently through analysis of the [black box] data finds out that one didn't perform as intended would be liable for probably a lot more than what was saved by using them… Our engineers and technical specialists investigating this determined that there is not a test that can verify the acceptability [of a salvaged airbag module]. The only way to do it is completely disassembling the unit, checking every component and…putting it all back together. The cost to do that would exceed the cost of building a brand new airbag."

- Ford Motor Company's Steve Nantau, during a 2005 discussion about reuse of non-deployed airbags from salvage vehicles.

Where did the money go?

"Some of the folks who'd talked to the paint and parts guys said they'd heard we were behind in paying the bills, but I didn't think it was to a point where I needed to worry about it. I mean, I looked at the stream of work we had coming through this place, and I had a hard time believing they could be losing money."

- A technician (who didn't want his real name used) with the M2 chain of 27 shops in California, which suddenly closed its doors in April after its purported sale to another consolidator fell through.

Insurance companies or King Kong

"The insurance companies are the customer. They are extremely large, and the relationship has become quite dictatorial over time. They are stating what the terms of the arrangements are and there's not a lot of flexibility for the body shops to counteract those simply because there is so much competition. Unless the industry makes a stand as a whole, one guy is undercutting the next guy."

- Mary-Beth Kellenberger, senior industry analyst at Frost & Sullivan and author of that organization's 2005 study of the relationship between shops and insurers.

Compiled by John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988.

 

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