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Saturday, 30 September 2006 17:00

Shops missing out on profits on non-deployed air bags

Written by Tom Franklin

Collision repair facilities in several provinces in Canada, enjoy profits that U.S. shops are missing out on. They have been recycling non-deployed OEM air bags since the first installations fifteen years ago. The Insurance Corporation of British Columbia, approved their use in 2002. Hundreds of non-deployed OEM air bags have been tested in Canada and the U.S. by credible organizations over the years with no problems and no reported failures of air bag modules themselves.

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On the other hand, claims of failures or alleged failures in service in vehicles relate to SRS system level malfunctions, e.g., sensor location, ECU sensitivity, ECU location, and are directly responsible for failures to fire. To the industry's knowledge, there has never been an instance of an air bag system failure that was attributed to the air bag module itself.

Since all air bags are OEM, all have been tested to 99.999% reliability. These assurances have enabled many Canadian repair facilities to purchase non-deployed air bags for less than half of the cost of new replacement OEM air bags - and have saved many hundreds of vehicles from being declared total losses.

The OEMs certify that their vehicles meet FMVSS 208 (among other federal safety and emissions standards) prior to sale. The air bag manufacturers comply with various quality standards such as QS 9000 and U.S. OEMs require that all suppliers meet the QS9000Standard in order to qualify to supply. Five 9s is not mandated by either FMVSS 208 or QS 9000, it is a level of reliability driven by competition.

Completely different story

In the U.S., the story is completely different. About 20% of collision estimates are declared total losses, many largely because of the cost of replacing the air bags. Because of liability concerns and a lack of vital knowledge, non-deployed air bags are not commonly used for insurance-paid repairs resulting in a full OEM ticket price for replacement air bags. As the number of air bags in vehicles has climbed from two, to four to as many as twelve in some vehicles, the potential for more total losses will also climb dramatically. Obviously this means fewer repairs for shops, fewer repaired vehicles returned to the customer, and higher repair costs for the insurance company when air bag replacement does not total the vehicle.

Is all of this necessary? Not according to George Eliades, executive vice president of the Automotive Recyclers Association (A-R-A). George says their organization has been studying ways to reduce the liability issue and to get these perfectly good air bags regularly employed in the repair of vehicles that would not have been totaled had it not been for air bag replacement expense.

Over the past several years, A-R-A committees have compiled facts and figures and made presentations to insurance and collision industry organizations like CIC, SCRS, and I-CAR. The result has been the creation of an "ARA Protocol for Use of Original Equipment Non-Deployed Air Bags"(www.a-r-a.org/standardsandcodes).

What the protocol does

The purpose of the Protocol is to "provide guidelines for the practice of removing an original equipment non-deployed air bag from a salvaged vehicle and reusing it in another vehicle." The document contains detailed procedures for removal, handling, processing and shipping of the air bag.

Peter Byrne, the President of ATT (formerly Air Bag Testing Technology, Inc.), was retained to develop a Standard, much like an ANSI or OEM Standard that addresses the topic, to enable third party inspectors to validate OEM non-deployed air bags.

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The ARA Protocol addresses the air bag module only, not the ECU, sensors or other elements of the SRS. If, in the very unlikely event that there is ever a claim that an ARA member supplied an air bag that did not deploy, it is a very simple matter to prove that the air bag module is fully functional. The process would be to retrieve the module, place it on a test stand, apply current and it will fire. In this way, it will be possible to prove that if an air bag is alleged to not have fired in a crash situation, that it was because it never received a signal to fire.

A-R-A's Air Bag committee chaired by Jeff Kantor and assisted by Jim Watson, has compiled a "Top Ten Reasons to Use ARA's Air Bag Center OEM Non-Deployed Air Bags" list:

1. All OEM parts, 100% tested by manufacturer before factory installation.

2. Air bag readiness re-confirmed every time ignition is turned on.

3. 99.999% reliability. Five 9's is the OEM gold standard for quality and used for safety parts, worldwide.

4. ARA's Air Bag Center is evolutionary, not revolutionary.

5. ARA's Air Bag Center documents a chain of custody for every action by supplier.

6. Use of OEM Non-Deployed Air Bags is the only functionally equivalent option to new.

7. Save time, money, and resources.

8. No discontinued part numbers.

9. No national back orders.

10. Already widely used - less total loss vehicles means more money and profit for shops.

Why the Protocol can be relied upon

Peter Byrne points out that the ultimate test of an air bag's viability is number two. The electronic control module always tests the inflator module to be certain the circuit is intact and the bag will deploy. The purpose of the Protocol is to provide a method of inspection, not certification. The bag has already been certified by the manufacturer to 99.999% reliability. Since there are no after-market manufacturers of air bags, number 6 notes that these bags are "the only functionally equivalent option."

Because air bags are the most frequently stolen vehicle parts in the U.S., by using this Protocol inspection standard to purchase replacement bags at less than half of the OEM cost, the market for stolen bags could disappear. By decreasing the number of vehicles totaled, shops gain vehicles to repair and recyclers gain opportunities to sell other recycled parts. Recyclers can continue to stock air bags discontinued or delayed by manufacturers, confident that the bags will be purchased and used.

What can make this Protocol work is the A-R-A's willingness to stand behind it. Members wishing to participate are required to increase their liability insurance to $5,000,000. Risk is further reduced by requiring a tamper-proof inspection sticker on each air bag along with a database record of "chain of custody for every action by supplier." This means that A-R-A will have on file the VIN and complete information on the donor vehicle and the recipient vehicle.

Issues of theft or improper installation will be largely prevented by these measures. For more information, contact Automotive Recyclers Association, 3975 Fair Ridge Drive, Suite 20, Terrace Level North, Fairfax, VA 22033; 703-385-1001.

The bottom line is "time, money, and resources" saved by shops, insurance companies and customers, and more sales and profits for both shops and recyclers -- a winning program!

Tom Franklin has been a sales and marketing representative and consultant for forty years and is the author of the books, "Business Battlefield Marketing for Body Shops," "Tom Franklin's Top 40 Marketing Tactics for Body Shops," and "Strategies for Greater Body Shop Growth." His marketing company now provides marketing solutions and services for body shops and other businesses. He can be reached for questions or comments at (323) 871-6862, by fax at (323) 465-2228, or by E-Mail: tbfranklin @aol.com.

 

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