Q: What is your reaction to Governor Rick Snyder’s veto of HB 4344?
A: It is disappointing, but we remain optimistic and focused on our cause. There was a great deal of misinformation that circulated that was never part of HB 4344 and created fear. I could spend time contesting various statements but what good would that serve? The governor by law had only 14 days to respond or it became law, so his window of opportunity to be completely informed on the issue with so many other things going on was limited – keep in mind we have the Flint water crisis and the challenges of the Detroit Public Schools needing his attention. Our objective remains that it is the right thing to do and we will continue forward with our goal accordingly.
Q: Can you give us some background about The Motor Vehicle Service Repair Act and how you became involved in helping to update it?
A: Michigan is one of multiple states that with a few exceptions, requires an automotive repair facility and its technicians to be registered/licensed under the Motor Vehicle Service and Repair Act (Act 300 of 1974). Technicians must also identify the specialties they employ.
The act has had very few updates since its inception. Upon taking over as executive director of ASA-Michigan in January 2010, I began working with the secretary of state’s office to update the bill. Off and on for the previous 10 years it was discussed but really did not seem to get anywhere outside of a few meetings.
We began with our collision and mechanical division committees here in Michigan, met with key personnel at the secretary of state’s office and also held meetings at a grass root level with some of the legislators, both in the House and Senate. We stayed focused on the issues and continued on our path.
In 2014, a state representative had a constituent that had been taken advantage of in the Metro Detroit area and the representative was surprised about some of the “holes in the system” that had occurred over the past 40 years. Unfortunately, it took a victim to prioritize this task, but we were already there and working on things, so it began moving quickly.
Q: When was House Bill 4344 introduced?
A: A bill was first introduced in 2014, but it had little time for the 60 plus pages of revision. In the spring of 2015, it was resurrected with the new term and the bill was introduced. It weathered multiple meetings, went through the sub-committee with a few changes and onto the House floor where it was delayed – basically because what has been deemed “controversy over aftermarket parts.”
In a section of the rules from 1974, under the definitions of fraud and misrepresentation, the verbiage of “merchantability of parts” was used. Over the past decade or more, I was hearing more and more from the collision repair industry about the quality of some of the aftermarket parts they were being asked to use.
Due to today’s vehicles having multiple airbag systems, seatbelt tensioners and other safety devices on their vehicles, I could no longer accept the vagueness of the term “merchantability of parts,” so I sought to define it and took props as I did – my job was to protect my independent repair facilities and they in turn, their customers!
Q: What were some of the changes incorporated into the bill?
A: Keep in mind that this applies to mechanical and collision repair facilities here in Michigan, so many of the changes were to update the law; a lot has changed in 42 years. Picture for a second a 1974 Chevrolet Impala and a 2016 Chevrolet Impala…I would say the vehicles and technology have changed a little. Paraphrasing the law as it currently stands from 1974, anything $20 or more had to have a written estimate before work could be performed and if any additional work was needed, the work could not exceed $10 or 10% of the original cost, whichever was less. In 1974, we could buy and install a headlight for under $20! What changed were things not applicable back in 1974. Since 1974, we have all come up with “best practices” that may have us start with a “zero” dollar amount and providing a written estimate before any work is performed, but still, we needed to update the “what if” scenarios.
I took in a chart with a calculation using the consumer price index (CPI) calculator and showed that $20 then was like $83 now. I wanted to get mechanical facilities to at least get their costs covered if they were to spend a little time using a scanner. The same holds true on the additional amounts. Unfortunately, we had to compromise logic during the process as I was seeking to raise it to $100, but the language as it is written in the bill allows for $50 or more, requiring a written estimate and then additional costs were increased to 10% or $50, whichever is less.
There are quite a few changes that brought the rules over into law as well, taking “interpretation” out of the equation. It also has laid some groundwork for better use of technology as we move forward. A lot has been accomplished in the bill that doesn’t get talked about as much because of the addressing of the merchantability of parts.
Q: What was the main intention of being proactive and getting involved in this legislation?
A: Our focus was to make sure that these parts had a requirement before being put on our consumer’s cars, our friend’s cars and our family’s cars. We NEVER introduced any legislation to the House or Senate at any given time that prevented aftermarket mechanical parts like some organizations have falsely published. We NEVER introduced legislation at any time that prevented the sale of any aftermarket parts nor any used/recycled parts; something that was also falsely published, emailed and communicated.
However, what we did do and stayed focused on was requiring aftermarket parts to be certified by a national third-party entity that would be able to say the parts are comparable to an OEM standard, hence certifying the part. As the bill evolved, we were quick to add language that clearly stated that recycled or used OEM parts could also be used. As the bill continued, many compromises were made but were never “good enough” to opposing parties, so we went as far as we were willing to bend. The final language is not what I had originally intended, but it was the best compromise while meeting the objective.
Q: What are the implications for collision repair shops in Michigan if the bill is passed?
A: The collision repairer will finally see only quality parts coming through their door and in turn, reduce their liability significantly. Though I am not in agreement, the bill will also require the consumer to direct a repair facility in writing to use a non-certified aftermarket part during the vehicle manufacturer’s warranty period or a period of five years, whichever is less. This puts a great deal of responsibility and liability back on the consumer and off of the collision repair professional, which is still a win for the industry I represent.
Q: What is the association's position on this bill?
As already mentioned, we preferred our original language regarding the use of aftermarket sheet metal parts because we believe it was the right thing to do, but as compromise was required, we remain 100% supportive of this legislation as it is written.
Q: What is the general consensus from collision repair shops in the state about the use of aftermarket and OEM parts?
A: Too often we forget the pressure these repair facilities are under when performing collision repair. They have a customer who has gone through a tragic event disrupting their lives and is seeking almost instantaneous results; they have various tasks coming at them during the process; if they are part of a program, they are constantly being measured; and lastly they need to be competitive while remaining profitable. So, anytime their touch time increases, their parts procurement is stalled or their cycle time overall is affected, their production goes down and their profits decrease and/or become a loss.
One of the complaints we continue to hear is that some of these parts that probably shouldn’t even be available in the market are being requested for replacement on a 2015 vehicle, and in their gut they feel these parts won’t perform as they should, but were never tested to validate these concerns. I sometimes think that today we use the term “free market system” when all other debates fail, but we also have to understand that when it was identified as a free market system, we were also teaching “business ethics” in high school. Putting a five-year-old in a major league baseball game and saying “good luck” is not “fair competition” – these parts are the five-year-old and have no business being forced into the game!