Your Source for Up-To-Date News and Research on the Collision Repair Industry 

 

click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email

SUBSCRIBERS-ONLY
Today's News
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor

Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide

Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...

Feedback
Letter to the Editor

MQVP States that Mid-State’s Document Implicates Manufacturers as Counterfeiters

In an ongoing lawsuit between MQVP Inc. and Mid-State Aftermarket Body Parts (Mid-State), which began in September 2003, Mid-State’s attorney has recently filed a document (Reply Memorandum) in Federal court that may push the aftermarket crash parts industry into a supply chain conflict. The fallout of the conflicts could severely damage his client’s case. The emotionally charged issues raised in the document have created a ‘prisoners dilemma’ between Mid-State and its own suppliers, both manufacturers and consolidators, as Mid-State explicitly implicates its suppliers for activities that MQVP considers counterfeiting.

“Mid-State filed this reply, which has all the appearances of an ex parte (unsolicited, unscheduled by the courts, and conducted with the intent to circumvent accepted procedures) communication to the courts, after the expected procedural filings were submitted for summary judgment by the December 8th deadline,” said William Hindelang, CEO of MQVP Inc.

After reading the MQVP briefs and response filed for the summary judgment, it appears that Mid-State’s legal team concluded that MQVP had established a superior positioning in the written arguments. The reply memorandum appears to be deemphasizing their original defenses and is now laying blame for their involvement (as if they were an innocent bystander) squarely on the manufacturers for having supplied them so-called “MQVP Parts Lists” (a static snapshot in time which could have only come from the confidential GOCERTS dynamic database). Apparently Mid-State is trying to transfer all accountability to the manufacturers for the counterfeit labels and “unauthorized use” of the MQVP service mark found on product packaging. However, Mid-State knew the labels were there and they needed the label to show to the shops. Mid-State was told by the manufacturers to remove the unauthorized labels bearing the MQVP service mark. Mid-State admits that it did not comply with label removal. Then, in addition Mid-State added the MQVP service mark on its own invoicing to the body shop to perpetrate the misrepresentation.

“In effect, Mid-State, who has never been in the MQVP program, has taken the legal gun, loaded it with 44 magnums, stuck it in their mouth and handed the trigger to the manufacturers,” stated Hindelang. “The manufacturers have assured MQVP that they have never advised or guaranteed Mid-State that parts shipped to Mid-State were meeting MQVP requirements, could be represented to be MQVP parts, or that the parts come with GOCERTS traceability, which is solely in the secured GOCERTS database. Mid-State’s case, which depends on proving parts are ‘genuine’ MQVP parts is a stillborn approach,” continued Hindelang.

Mid-State’s challenge to its own supply base is to either accept the counterfeiters scarlet letter “C” or come forward and reveal the facts behind the Mid-State counterfeiting relationship. The counterfeiting ring may include the other distributors who supplied Mid-State with product, who also knew they were misrepresenting the parts as MQVP because they never had the “authoritative traceability” of GOCERTS.

Mid-State attorneys’ reply memorandum incredibly concluded with the statements: “Mid-State did have and continues to have MQVP parts available.” In total contradiction and equally incriminating of its client, Mid-State wrote in their document, “Mid-State has never told anyone that the parts it sells have GOCERTS traceability.” Hindelang commented, “Of course Mid-State didn’t have GOCERTS traceability, because their aftermarket parts are not MQVP parts.”

The sine qua non (essence) of MQVP and any meaningful quality management system is traceability. Apparently Mid-State’s attorney thinks its client’s body shop customers are also asleep while he is pounding the final nails in Mid-State’s coffin. How can Mid-State “have MQVP parts available” with counterfeit labels and unauthorized use of the MQVP mark on their invoices, sell them to body shops, and then admit to Federal court that it doesn’t (never) have the supply chain traceability of GOCERTS?

To make matters worse, what is to be made of the situation with the body shops? Is Mid-State going to also imply that shop owners knew they were getting parts with counterfeit parts labels and unauthorized MQVP marks on the invoices, but also knew there was no GOCERTS traceability? Or were the shops and their insured vehicle owners both duped by the Mid-State scheme? Mid-State’s document claims there was/is no confusion in the body shop market. “Did Mid-States mean that their body shop customers were in on the scheme?” asked Hindelang.

Like the ‘prisoners dilemma’ of the manufacturers, Mid-State puts its own customers into the conflict to either agree that they were complicit in fraud to the vehicle owners, or to agree that they were duped by Mid-State and thus there is indeed confusion in the marketplace. If so, class action claims may be the body shop’s remedy against the distributors who counterfeit.

MQVP is a valuable industry program and the GOCERTS traceability has proven useful in protecting vehicle owners from installing inferior quality parts. Unfortunately the Aftermarket Parts Industry, Mid-State’s core business, is currently embroiled in a national RECALL of defective hoods with safety latch problems. These hoods, as identified by the part number and manufacturer, are proven by GOCERTS to NOT BE MQVP parts.

Because some aftermarket parts, but certainly not all, are sold or consolidated by participants in MQVP’s program, Mid-States thinks it can be allowed to define which parts are MQVP and leverage the MQVP mark as it sees fit, representing these types of parts as MQVP without the GOCERTS traceability. Body shops in Arkansas and the surrounding states should be horrified by Mid-State’s self serving, reckless rationalization. MQVP cautions shops to avoid distributors for which “selling parts for profit” is a higher priority than due care for consumer safety.

MQVP Inc. is the creator and administrator of the Manufacturer’s Qualification and Validation Program (MQVP) and is a leading provider of global supply-chain quality assurance systems. MQVP Inc. is located in Rochester Hills, MI, and its GOCERTS System provides traceability and monitoring of over 7000 part numbers representing in excess of 30,000 collision repair applications.

©2005 Collision Repair Industry INSIGHT
All Rights Reserved

FEATURED
LINKS:

INSIGHT Supports the NABC!
Do You?