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Thursday, 31 January 2008 17:00

Committee Terms Proving Successful As Detailed Plans Abound at CIC

Optimism reigned at the January meeting of the Collision Industry Conference (CIC) in Palm Springs, driven largely by the announcement by the governmental committee of a new website that directly accesses manufacturer’s repair information.

 

Over 150 CIC participants gave this news a rousing ovation. Eric Bondus, parts sales manager, Hyundai Motor America introduced www.oem1stop.com stating, “The OEMs and the Independent Repair Facility (IRF) share responsibility for our mutual customers.”


Bondus reported there are 200 million cars in the United States and 20,000 new car dealers. Statistics show that there are 2.5 services per car, 25,000 service visits per dealer at 260 workdays showing almost 100 visitors per day per average dealer. Realistically, most service departments – dealer and independent – are not servicing 100 cars per day. Consumers are loyal to their brands, as in the neighborhood family garage, and statistics show about 50% migrate from OEM to independent. “The logic chain tells us we need to work closely on this very important and challenging task,” Bondus pointed out.

 

Recognizing that repair information can be difficult, at best, to access, the OE Roundtable has been looking at ways to improve that situation. “The OEM’s are listening,” Bondus continued. “We have spent a lot of money on websites and are continually building new functionalities.” In response to the collision industry demands, with the support of the OEM  braintrust, the new website came to be.


Oem1Stop is a single site for the independent repair facility to access information by  coordinating all OEM sites in one place and using electronic routers to the OEM repair access site. All manufacturers are on board, though some are still going through corporate legalities before they are “live.”


The website is user friendly, similar to a video game. On the home page, clicking on the  manufacturer’s icon will go directly to its repair information access site. Users must still abide by individual manufacturer’s rules, possibly having to register with the manufacturer and paying fees.


American Honda was the first manufacturer to participate in the program. Stickers with the website address will be made available to the industry soon. “This is a giant step,” closed Bondus. “Not a last step, but a giant step. If we don’t use this site – OE’s will not improve it.”


Government Committee Co-Chairman George Gilbert, customer service at Ford Motor Company added, “This is a great indication of where we have come. We have consciously and purposely asked OE Roundtable to be active participants in the Collision Industry Conference. From our vantage point, we are seeing a lot of OE participation, supporting with their voice, efforts and good works.”

Real cost of repair
The Fair Trade Committee chairperson Jeanne Silver, CARSTAR, Mundelein, Illinois delivered a landmark presentation. Silver introduced ’The Real Cost of Repair’ power point presentation with a short dissertation to CIC participants.


“This presentation is about rate suppression and the facts our industry is faced with – it is about addressing the real issues and not ignoring them – a ‘tough love’ approach.” The eight members of the Fair Trade Committee – Scott Biggs, Boyd Dingman, Gene Hamilton, Gary Wano, Rod Enlow, Teresa Bolton, Bob Smith and Erica Eversman –  worked diligently with Silver and co-chair Keith Manich to gather hard data for the presentation.

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Summing up the message, Silver shared statistics from 2004 to 2007. “This presentation looks at rate suppression. Rate uppression developed as a result of worsening economic conditions, oversupply of shops and decrease in the number of repairable vehicles.


“A historical perspective of how rates were determined in the past was in the presentation. Today, rates have become stagnant, and direct repair rates and discounts are being forced on all repairers. It is important to understand costs so that an intelligent discussion can be had with insurers. Statistics show that the collision industry has not kept up with inflation. Rate increases for labor and materials are at about half of similar industries. Energy costs have increased anywhere from 20% to 50% and technician costs have increased around 15% with refinish costs increasing by almost 24%. Labor rate and refinish rate increases have averaged 8% at best.”


In addition to facts and figures, the Fair Trade Committee offered these salient points for the inter-industry group to ponder:


    •No one ever went into business to lose money
    •Business is business, no need to be confrontational
    •You don’t get anything if you don’t ask
    •Know your numbers – present a sound business case by knowing your cost  increases relative to rate increases.

Total loss panel
A panel discussion on “Total Loss Trends and Causes” was led by CIC Vehicle Repairabilty Committee chairman Steve Nantau, collision and light repair supervisor, Ford Customer Service Division. Participants were Greg Horn, Mitchell International; Suzanne Gotsch, CCC Information Services; and Brian Ganger, ADP. All three information providers acknowledged the first reduction in “total loss” vehicles for several years. One influencing factor could be that total loss frequency may be higher Actual Cash Value (ACV). There are more trucks with higher values on the road today than ever before.


In the future, new car technology will dictate more ‘Design for Repairability’ by following the Society of Automotive Engineers (SAE) 2004-01-1774. Serious discussion ensued from the forum recognizing industry challenges surrounding the total loss issue. Chief Automotive’s Lee Peterson pointed out that many cars are being totaled without a written estimate. “For administrative reasons, some insurers are making quick decisions on total losses.”

 

The committee was asked whether they thought off-shore salvage values were driving the decision to total more cars. Statistics show an increasing demand for salvage parts – salvage buyers are having more difficulty in buying cars. Some of the off-shore salvage is being rebuilt and on the road in other countries. Jerry Geisler, Jerry’s Custom Paint, Gresham, Oregon, stated, “This is a self-fulfilling prophecy – if a car is being rebuilt – it should be repaired correctly in a shop and put back in the consumer’s hands.”

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Standards – a double-edged sword

Next up was the Repair Standards Committee. An eight-member panel discussion, moderated by Scott Biggs, tackled “Collision Industry Standards – What’s Next?” This challenging topic was met with many questions and comments seeking a “standard” solution. Tony Molla, ASE, has been dealing with this issue for quite some time, reminded:  “We need to start by using recommended procedures already available to us.”


CCAR’s Rod Enlow brought up the hard questions, “This could be our best friend or worst enemy. Standards have measurements. Is this a kink or a bend? – that will be in the eye of the beholder.”


The warning was made that standards would have to be monitored. And the next logical question would be: standards monitored by whom? This has the potential to create a cottage industry, and then who will guard the standard guards?

 

Bob Matezel, Roberts Consulting, was instrumental in developing the initial Circle of Dependability (COD) program for Farmers Insurance. He observed, “There has to be a mechanism to find out if they are doing it right and there has to be a mechanism to find out if they are doing it wrong.”


CARSTAR’s Bob Keith set the stage for taking the next step. “It is like building a jigsaw puzzle. We have to build a border first, then take what we have and work at filling the middle in.”

Estimating Best Practices
The CIC Insurance Relations Committee has been tasked to develop an “Estimating Best Practices” document. CIC Administrator and Chairman of the Insurance Relations Committee Jeff Hendler was instrumental in its execution. A 17-page working text was sent to the industry two weeks before CIC, asking for feedback.


“This project is justified in the fact we are now getting comments,” said Hendler, after listening to CIC participants make their observations to the committee. “We will incorporate many of these comments and will be reworking parts of the document. All segments of the industry are involved in putting this “work in progress” together: OEM’s, recyclers, insurance companies and collision repairers.

 

“We are in no hurry to get this done,” announced Hendler. “It took us (CIC) two and a half years to get the Class A Shop document completed. It has to be right.” (The Minimum Recommended Requirements for a Class A Facility document was completed through inter-industry efforts and is the recognized standard, by many, for a Class A collision Repair Facility.)


This Estimating Best Practices document will speak to the procedures necessary to repair a car back to pre-accident condition. That is the type of concern and challenges that will be addressed in the overall parameters of putting this document together. “That is the spirit of this document,” Hendler concluded. “If every segment cannot embrace it, it will not be valid.” For estimating comments and input, please contact Jeff Hendler at jeff@jdhendler.com.

 

CIC Chair Stacy Bartnik wrapped up the day-and-a-half meeting addressing its success. “In the past, the CIC meeting in January has been a planning meeting. This was the first year we extended our committees to a two-year term and used this time as a working meeting. From the great committee reports we have heard these last two days, it looks like we have a positive year ahead of us.”

 

The next Collision Industry Conference is April 16 and 17 in Philadelphia, Pennsylvania. For more information go to www.ciclink.com

 

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