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Thursday, 28 January 2010 11:33

Non-OEM Parts Industry Gets Close Scrutiny at CIC, Parts Found Lacking

The non-OEM parts industry faced criticism from a number of directions at the Collision Industry Conference (CIC) held in Palm Springs, CA, in mid-January.
As he did at the previous CIC, industry trainer Toby Chess brought a selection of non-OEM parts to the meeting to show some significant differences between them and the OEM parts they were designed to replace. Most of the difference, he pointed out, were subtle, and were less often about the physical shape of the part than in their composition. (See Chess’ Hey Toby! column in this issue.)

Chess showed several bumper reinforcement bars, for example, that were bent to shape rather than formed, resulting in a weak spot. He also showed a bumper bracket for the 2000-04 Nissan Xterra that was made of 2-mm-thick material rather than 3.38-mm material used for the OEM part, and foam bumper inserts made of polystyrene (“coffee cup foam”) rather than the much-denser polypropylene foam.

 


“I have a 25-page report here on why (Ford) used magnesium on the core support for the F-150,” Chess said, holding a non-OEM core support being sold for the vehicle that is made of aluminum. “On some of these parts you can feel the weight difference, but if you didn’t have one to compare it with, how would you tell the difference? We need to have better standards.”
At the previous CIC in Las Vegas last November, Chess used a firefighters’ extrication saw to show how easy it was to cut through the mild steel of a non-OEM bumper reinforcement bar being sold as a replacement for an OEM Toyota Corolla part made of ultra-high-strength steel. At CIC in Palm Springs, non-OEM parts distributor LKQ Corp. said that demonstration led it to make some changes.
“We did a very quick test on our own, and we found that that particular part did not meet our standards,” LKQ’s Herb Lieberman said.
He said the company stopped selling the part, is testing all the bumper reinforcement bars it sells, and is not importing more bumper bars pending the outcome of that testing. (The company later clarified that it is still importing bumper bars to test and those that have passed its in-house testing.)
“I can tell you this is a very, very, high priority for our company, and that we hope our competitors in the field will see the same things we see and will also lend their cooperation to this process,” Lieberman said.
Aaron Schulenburg, executive director of the Society of Collision Repair Specialists, applauded LKQ for its decision, but asked, “What about all the people who have (one of those parts) sitting on their car today? Whose responsibility is it to contact them to make sure they get their vehicle back in and have it taken care of?”
Lieberman said that question “is under deep consideration” at LKQ.

Ford responds to parts price criticism

Also at the meeting, Ford Motor Company responded to a presentation at the previous CIC in which its price increases for parts covered under its design patents were criticized. Dan Morrissey, a board member of the Automotive Body Parts Association, which represents non-OEM parts makers and distributors, had argued that allowing automakers to obtain design patents on parts eliminates competition and results in higher OEM parts prices, and he used a chart that he said showed that prices for seven parts covered under Ford’s F-150 patent rose 20 to 81 percent from 2007 until November 2008.
At CIC in Palm Springs, Paul Massie, powertrain and collision product marketing manager for Ford, acknowledged that some of the parts had “fairly substantial price increases percentage-wise,” but pointed out that others covered under the patent (but not cited in the previous presentation) had gone down.
“We do acknowledge we raised (prices) on five of seven (parts), but why didn’t they show the decreases, too?” Massie said.
He  listed a number of factors that play into changes in parts pricing, including changes in cost of raw materials, and whether a part is being made as part of an in-production vehicle.
Massie also used a chart to compare prices changes in twelve  F-150 parts (including left- and right-side parts, and 2- and 4-wheel drive versions) covered under the parts patent to changes in the average price of corresponding non-OEM parts over the same period. That showed prices for the Ford parts rose 9.3 percent while the non-OEM parts prices rose 19.1 percent.
Massie added, “If Ford’s behavior was monopolistic and price-gouging, and if the evidence of that is price increases on design-patent parts, what was the aftermarket’s behavior?”

Other Events at the Meeting

In other news and discussion at CIC in Palm Springs:
● Lou DiLisio, chairman of the CIC Database Committee, said that  CCC Information Systems has asked the committee to help the company revise its data privacy policy. The move comes amid industry concerns as CCC and other information providers shift toward systems that store shop estimate and even shop management system data on the vendor’s computers rather than the shop’s.
“They have a 1-page (privacy policy) that talks about what they will and, more importantly, won’t do (with data), and based on concerns that have been raised, they’ve asked if we would work with them a little more closely on developing a more enriched privacy policy,” DiLisio said. “We applaud CCC for taking the initiation to work on that.”
● Also as part of the committee’s report, DiLisio noted that despite requests for several years that the estimating systems identify which replacement bumpers come unprimed from the automakers, “None of the information providers have addressed that in their system other than with a simple footnote.” DiLisio said Motor Information System (whose database is used in the CCC estimating system) recently told the committee it was adding footnotes on the topic to its system, similar to those in the Mitchell and Audatex databases.
“We’re looking for automation of the process, not a footnote,” DiLisio said at CIC. “We are working on providing...a specific list - make and model - of what vehicles have unprimed (replacement) bumpers from the OEMs, so we don’t have to do the guessing game. The information providers should include that data in their systems.”
● Participants at CIC also voted by a slim margin to hold CIC’s November meeting in Las Vegas the original week it had been scheduled rather than move it to October in conjunction with the rescheduled NACE. (See Autobody News, Jan. 2010 cover story.)
Proponents of the November meeting pointed out that organizers of the Specialty Equipment Market Association (SEMA) show held that week had offered CIC meeting space and flexibility as to when during the week CIC was held. Because NACE runs from Sunday-Wednesday this year, a CIC held during NACE week would have had to be on Thursday, pushing other groups that hold meetings in conjunction with CIC, such as the National Auto Body Council (NABC), to meet on Friday. The final vote on the decision, following more than 30 minutes of discussion, was 71-65 in favor of the November meeting.

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