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Letter to the Editor
This article originally appeared in the December 2000 Issue of INSIGHT
©2000 Collision Repair Industry INSIGHT All Rights Reserved
Ford Motor Company Becomes Canada's Largest Auto Recycler
NACE Sites Announced for Future Years
NHTSA to Crash Largest Number of Vehicles Ever
West Virginia Stipulates Single Source for Replacement Value of Wrecked Cars
INDUSTRY UPDATE
A potential roadblock for dot-com companies’ parts ordering systems has arisen as ADP has decided to encrypt its information. The issue of confidentiality has been raised by ADP both to protect the company’s revenue stream and its OE and insurer relationships. Concerns, too, have been expressed about the personal information of consumers at the top of estimates. ADP’s decision to encrypt the information will have a decided impact on the dot-coms that have been getting information from estimates, repackaging it, and selling it.
OEs are saying that the parts information given to ADP is proprietary, and the license with ADP for the information stops with the collision repair shop, the insurance company, or the car dealership, if ADP has a relationship there. The car manufacturer obviously has no unhappiness with the system when it is used by the body shop itself to order parts either by fax or e-mail attachment.
However, when that information goes through a third party (e.g. a dot-com company), a company that is charging the parts supplier, it is felt that this is an infringement on the licensing agreement.
Without a doubt, we have not heard the end of this situation.
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The newly formed AfterMarket Quality Association (AMQA) has launched its web site, AMQA.org to "provide information and programs to improve the quality of automotive aftermarket collision parts," according to a press release. The site has a publicly available side and a members-only side. The public side offers interested parties, without cost, the ability to notify insurance carriers of parts and service concerns. It will also provide trade information, general news and information, and industry web links. The site requires visitors to register at no charge prior to entering and submitting their concerns.
Editor’s note: Who exactly is involved? Where is the money coming from?
The private side requires visitors to register as full members for $99 per year and promises to offer additional services including access to future trade shows, a biweekly newsletter, on-line quality training, and cost effective group consulting. Full members also will have, according to the press release, "influence" with the newly created Manufacturers' Qualification and Validation Program (MQVP) as well as access to two related on-line programs, Global Online Certifications System (GOCERTS), a product quality and lot traceability program and Corrective Action Reporting Online System (CAROL System), a nonconformance and corrective action reporting system.
Editor’s note: How many new acronyms can the human mind grasp at one time? Who will pay the yearly and user fees required to access information on the website, and why?
"These related programs were created to address recent quality concerns in the automotive aftermarket collision parts industry," said William Hindelang, President of Global Validators, Inc., Troy, MI. Global Validators, Inc. provides quality assessments, ongoing observations of manufacturers' performance and other services for collision parts manufacturers and distributors. Global Validators is the administrator of MQVP, CAROL System and GOCERTS.
MQVP, an industry guideline document based on QS-9000, defines expectations for manufacturers, suppliers, distributors, tooling and equipment, and support services in the automotive aftermarket collision parts industry. The purpose is to have the quality of Non-OEM collision parts on the same level with OEM collision parts in terms of fit, form, function, durability, appearance and safety by using the same requirements for quality management systems, product and process documentation, and evaluation methods as those used for OEM collision parts.
Editor’s note: Here’s where it gets really confusing. Access to CAROL will cost an additional $24-$60 per month per user, according to the press release, based on volume user discounts, plus usage fees. Collision Repair Facilities and vehicle owners can send in concerns at no cost, and product problem reports such as quality system failures and vehicle test fit data will be posted. Editor’s note: Will shops be required by participating insurers to make online reports on aftermarket parts received? Who will verify problems and concerns submitted by shops and consumers?
Access to Global Online Certifications System (GOCERTS) is also by subscription, with "user and usage fees based on transactions." It is described in the release as "an on-line database of lot shipment traceability for each participating manufacturer…developed to automate certification records, reduce handling costs, link supply chain certification and lot traceability, standardize the format and reduce the time and error rate associated with using the current, manual method."
"These comprehensive quality programs will provide an integrated set of tools that are fundamental to the quality success of the aftermarket automotive collision parts industry. By implementing the same level of quality standards as OEM collision parts, this industry will prove itself to be competitive, and of high quality and price" said Ron Ritchie, President of AMQA.
Editor’s note: What about CAPA? Why two testing organizations?
After a unanimous decision by CAPA's Board of Directors to significantly increase membership of non-insurance representatives to the Board, CAPA members have added five new positions to the Board and elected four new members.
"The recent decision of the CAPA Board to increase the membership is part of an ongoing strategy to ensure that CAPA reflects the industry-wide desire for quality and competition in the crash parts marketplace," said Henry Viccellio, Jr., current Board Chairman, and President of USAA Property and Casualty Insurance Group. "I am particularly excited about the increased participation at the board level by collision repairers. Meeting their needs is key to any success CAPA may achieve."
Early this year, the Board agreed to equalize the number of insurers and non-insurers serving on the Board by authorizing an expansion of the Board to seven non-insurers and seven insurers. This is a change from the previous composition of six insurers and three non-insurers. "This is an exciting change for CAPA and will go a long way to helping ensure that the solid foundation of the past will keep pace with the new demands being placed on the organization," said Jack Gillis, Executive Director of CAPA.
To begin filling the new board seats, CAPA members elected the following Board Members: Bob Anderson - Anderson's Automotive Services and Don Keenan - Keenan Auto Body - Collision Repairers. Jackie Gillan - Advocate for Highway and Auto Safety - Consumer Representative. Bill Smeal - Smeal Enterprises, Inc. – Distributor.
Ford of Canada has announced the acquisition of a major Quebec automotive recycler - Lecavalier Auto Parts - through Ford Motor Company's GreenLeaf subsidiary. The purchase is the company's first in Quebec and makes Ford Canada's largest auto recycler.
"Being a leader in automotive recycling is part of Ford of Canada's commitment to serving our customers and the environment throughout the entire lifecycle of a vehicle," said Bobbie Gaunt, president and CEO, Ford Motor Company of Canada, Ltd. "Our responsibility to the customer does not end when the vehicle leaves the dealer showroom. From design and production, to service visits and ultimately, the recycling of parts, we offer solutions people can trust."
GreenLeaf is wholly owned by Ford Motor Company and is dedicated to the recycling business in the North American market. This is the company's third purchase of a recycling operation in Canada this year -- in January, Ford acquired Plazek Auto Recycler Ltd. of Caistor Centre, Ontario, near Hamilton, and in June, Ford bought Cumberland Auto Parts near Ottawa, Ontario.
"We want to ensure that vehicles are recycled with maximum efficiency leaving minimal waste material going to landfills," said Dean Tesser, Ford of Canada's director of ConsumerConnect, the organization that directs the company's growth opportunities. "The recycling of automotive parts and materials is a high-growth opportunity in the industry and Ford is actively pursuing acquisitions as part of the company's new business development strategy."
Lecavalier Auto Parts, acquired from Roger and Philippe Fugere, with 130 employees, has two locations outside Montreal. These facilities process approximately 11,000 vehicles a year to provide professionally cleaned and thoroughly tested parts to body shops, insurance companies and individual consumers.
Ford of Canada is Canada's longest-established automobile company with three vehicle assembly plants, five manufacturing plants and 565 dealerships located in all provinces. Ford's Canadian operations employ approximately 16,000 people and an additional 22,400 are employed in dealerships.
Show Management for the International Autobody Congress and Exposition (NACE) announced a new site rotation for future events. NACE 2001 will be held in Las Vegas, Nevada. In 2002, NACE will take place in Dallas, Texas, and the following year, it will be held in Orlando, Florida. Beginning in 2004, and every even-numbered year after that, NACE will be held in Las Vegas. The site for NACE 2005, and every odd-numbered year after that, has not yet been determined.
NACE attendee and exhibitor feedback, and Show Management’s assessment of specific criteria needed to ensure the continued success of the event, such as the host facility, hotel availability and accommodations, air travel accessibility and labor/work rules in the host city, led to the new site rotation.
"The ultimate success and continued growth of all future NACE events was the motivation behind determining this revised rotation pattern. After extensive analysis, we feel the cities selected will best serve attendees and exhibitors alike from both a demographic and marketing standpoint," stated Show Management's Galen Poss, president, Hanley-Wood Exhibitions.
NACE is the world’s largest collision repair event and annually draws in excess of 30,000 people from more than 70 countries. This year, NACE will be held December 7-10, at the Orange County Convention Center, Orlando, Florida.
For additional NACE information, contact NACE Show Management at its new address: P.O. Box 612128, Dallas, Texas, 75261-2128, or call toll-free (888) 529-1641.
The National Highway Traffic Safety Administration (NHTSA) has announced it will crash test 113 model year 2001 vehicles to obtain safety information that will help consumers make buying decisions.
The U. S. Department of Transportation's traffic safety agency said it will crash test 72 passenger cars, 19 sport utility vehicles, 11 vans, and 11 pickups in its New Car Assessment Program (NCAP). Sixty-one vehicles will be crashed in the frontal direction and 52 vehicles will be crashed from the side.
Once the crash testing is complete, frontal safety information will be available to consumers on about 82 percent of the model year 2001 vehicles sold in the United States. The agency will provide side impact safety information on about 81 percent of the vehicles sold in the United States. In real world crashes, vehicles are twice as likely to be involved in severe frontal crashes as in severe side crashes.
NHTSA crashes vehicles so that the entire front hits a fixed barrier at 35 mph. This crash is equivalent to a head-on collision between two identical vehicles, each moving at 35 mph, or with a 70 mph closing speed. Instrumented dummies register forces and impacts during the crash, which NHTSA uses to predict frontal head and chest injuries. The 35 mph speed of the deformable barrier is 5 mph faster than the speed prescribed for compliance with the existing Federal Motor Vehicle Safety Standard for frontal crash protection. The crash tests are conducted at the higher speed to demonstrate differences that are more apparent at 35 mph than at 30 mph.
The NCAP crash test results are reported in a range of one to five stars, with five stars indicating the best crash protection for vehicles within the same weight class. Head and chest data, which indicate the chance of a life- threatening injury, are combined into a single rating, reflected by the number of stars. These represent a vehicle's relative level of crash protection in a head-on collision. Thigh injury, though rarely life-threatening, is also measured in the tests. Such injury can be disabling, and if a high likelihood of thigh injury occurs in the tests, it will be noted in the charts.
Test results show the relative crash protection provided to front seat occupants using all of the vehicle's occupant protection equipment. Occupant protection equipment consists of safety belts or a combination of safety belts and air bags. The results do not apply to unbelted occupants. The occupant protection equipment provided on each tested vehicle is shown to the right of the vehicle's overall score.
NHTSA emphasized that the crash test results for frontal impact are meaningful only for comparing relative injury risk in frontal collisions between vehicles of similar weight, within an approximate weight range of 500 pounds. The test results for passenger cars are presented in separate tables for each weight class and listed alphabetically within each table. Separate tables are provided for sport utility vehicles, vans, and light trucks. In head-on collisions involving two vehicles of different weights, occupants in lighter weight vehicles almost always experience greater risk of injury than those in heavier vehicles.
The federal safety agency said the side crash used to test these vehicles simulates a typical intersection collision between two vehicles. In the tests, forces are measured on two crash dummies when a moving, deformable barrier is angled into the side of a car at 38.5 mph.
The 38.5 mph speed of the deformable barrier is 5 mph faster than the speed prescribed for compliance with the existing Federal Motor Vehicle Safety Standard No. 214, "Side Impact Protection." The crash tests are conducted at the higher speed to demonstrate differences that are more apparent at 38.5 mph than at 33.5 mph. The test results are presented in a "star" format-one to five stars, with five stars being the best score--to make the technical crash results easy for consumers to understand.
Crash-test dummies -- designed specifically to measure human-like responses in the side direction -- are placed in the driver position and in the rear seat position behind the driver. As in the frontal test, the two dummies are secured with all available restraints. Instruments measure the force of impact to the dummy's chest and pelvis. The chest data, which indicate the chance of life-threatening injury, are signified in a single rating reflected by the number of stars. Pelvic injury also is measured. If a high likelihood of pelvic injury occurs in the lateral test, it will be noted in the charts.
Consumers can review test results and additional information on the NCAP program and other safety topics at http://www.nhtsa.dot.gov/ or the agency's toll-free Auto Safety Hotline, 800-424-9393.
State Insurance Commissioner Hanley C. Clark sent out that announcement in an Oct. 1 informational letter to insurers in response to consumer complaints about the amounts they have been receiving to replace vehicles they totaled in accidents.
West Virginia is the first state to require use of a single database system, according to Clark, but he said others are considering the move. "Many states are receiving complaints because of the differences," he said. "What's of importance is that consumers be treated the same."
Clark's decision means that all other pricing sources, including ADP Auto Source and CCC Information Services, are off limits in West Virginia. Critics say the database prices they provide often are lower than Blue Book prices used by car dealers, said Clark, who added that differences between the NADA system and others can be as great as $4,000.
The pricing issue was the subject of discussion on the ABC network television program "Good Morning America". A reporter and a consumer advocate on the show built a case that ADP and CCC are responsible for the lower vehicle values and that insurers are using these values as a way to pay their insureds less. The show reported that both ADP and CCC stood behind the accuracy of their values, with CCC claiming its database is more accurate than dealer price guides because CCC prices cars by local markets.
Clark said he took action on the issue because state consumers "were on a different playing field as to valuations." One of the disparities consumers have faced is that the banks in the state use the NADA system in determining car values for loans, Clark said. In other words, when they needed to borrow money, they faced higher NADA vehicle valuations, but when they filed insurance claims, they faced lower vehicle valuations. Clark also said he made the decision because "there is no way consumers can protect themselves."
NADA is the primary valuation source for State Farm Insurance Co. in its region of the country that includes West Virginia. The Bloomington, Ill.-based insurer is the top writer of auto insurance in West Virginia. State Farm only uses ADP or CCC in that region when the vehicle is too new or too old to be included in the NADA database. State Farm chose to make NADA its primary source in West Virginia because the state has recommended NADA in its insurance code. State Farm has voiced concern about Clark's recent decision, however, because it does not address how insurers are to value vehicles too old or new for inclusion in the NADA database.
Most insurers use all three of the primary valuation services, according to the Oregon Insurance Division. Oregon has seen a slight but insignificant rise over the past two years in consumer complaints about how their wrecked vehicles have been valued.
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