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Letter to the Editor
This article originally appeared in the May 2001 Issue of INSIGHT
©2001 Collision Repair Industry INSIGHT All Rights Reserved
Mitchell International Praises Plans by ADP and CCC to Allow Open Communication of Estimate Data
CIC Gets Down to Nuts and Bolts
Robert P. Strazzella Named U.S. Business Director for DuPont Automotive Refinish
PPG Pleased with ITC Injury Finding on Chinese Windshields
Copart Introduces Motors Auction Group - MAG
State Farm Loses Appeal of $Billion Verdict
Summit Software Solutions Launched by Frank Terlep
SCRS Issues Position Statement on the Estimate
INDUSTRY UPDATE
The Automotive Service Association (ASA) recently hosted an industry summit to discuss several issues relating to the collision repair industry. The summit was held in Kansas City, Mo.
Attending the meeting were representatives from ASA's Collision Division Operations Committee, insurers, recyclers, collision repairers, and information providers. ASA is working with insurers and recyclers to identify concerns and propose solutions that would enable the repair industry to use more recyclable parts in the repair of automobiles.
These concerns overflow to the information providers and would require changes and improvements to their systems. The summit focused on establishing proper and common industry nomenclature for not-included procedures, proper standards and repair procedures, and accurate descriptions of a repair.
Suggestions resulting from the various concerns and entities represented at the summit included identifying more not-included procedures by utilizing drop-down boxes on electronic information systems. This would allow for more accurate estimates. This discussion was facilitated by one of the providers presenting the idea of a schematic worksheet to identify some of the procedures. If the information providers elect to implement this proposed solution, it will likely be a long-term implementation process.
As a short-term solution, a laminated reference chart of not-included operations covering recyclable parts is being published.
Representatives from both the collision repair and insurance industries sought solutions for readily identifying not-included procedures. The summit provided ideas toward the realization of that goal.
Nomenclature changes proposed for consistent use among all the entities included using the following terms:
- "Degrease and clean" rather than "clean-up"
- "Trim to cut or fit" rather than "trim"
- "Repair part" rather than "clean-up part".
Future meetings will be scheduled by ASA to continue providing solutions toward user compatibility across all entities of the collision repair industry.
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Mitchell International has applauded recent statements by competitors -- ADP and CCC -- that they will reverse their stance and join Mitchell in allowing open access to CIECA-standard EMS output files from their estimating systems. During April's Collision Industry Conference (CIC) in Minneapolis, representatives from ADP and CCC made statements reversing their decisions to encrypt data.
"We have always strongly supported open communication of estimate data," said Mitchell President and CEO Jim Lindner. "We believe it is the best interest of the entire industry because it promotes open competition and the ability to share information between shops and insurers -- which is so critical in our industry."
Lindner said the result of all three data providers allowing open communication of estimate data will have both immediate and far-reaching impacts for the industry. "This will allow customers to choose products based on price, features and functionality rather than proprietary requirements. We think everyone will benefit by being able to use and integrate with the products of their choice."
Users of the three systems will now be able to export the EMS file to the body shop management system of their choice. Mitchell is hopeful that insurers will now encourage estimators to send files from any of the top three estimating systems through eMitchell.com for processing. Mitchell recently announced the availability of on-line claims processing at eMitchell.com, and used open communication standards in its design.
"In anticipating the ultimate adoption of these standards by the industry, Mitchell took action months ago to offer on-line claims processing at eMitchell.com based on open standards," Lindner said. "With the other data providers allowing open access, insurers can adopt claims processing at eMitchell.com to achieve greater efficiency and lowered costs without concern about which estimating system they currently use."
Attendance was fairly light at the Collision Concepts trade show held in April in Minneapolis, but the meetings and other sessions held in conjunction with the SCRS-sponsored event again were successful at drawing attendees from around the country.
At the SCRS-sponsored National Industry Issues Forum, for example, repairers and repair association representatives voiced support for three resolutions created and discussed during the meeting.
Attendees unanimously called for efforts to declare total loss vehicles "unrepairable" and salable only to dismantlers if they are less than 8 years old and have damage exceeding 100 percent of their value.
Herb Lieberman of Lakenor LKQ Auto Salvage in Sante Fe Springs, Calif., said his industry has introduced such legislation nationally but the bills have never moved out of legislative committees.
"Of the vehicles declared total losses and removed from repair facilities to salvage pools and sold as total loss vehicles, our industry is only purchasing 30 percent of those vehicles, and that has an adverse effect on all of us," Lieberman said.
He and others at the meeting pointed out that the current situation results in higher prices and lower availability and quality of salvage parts; surgical stripping of vehicles, VIN swapping and other fraud; insurers re-insuring poorly-rebuilt totals purchased by unsuspecting consumers; and high salvage values that result in more vehicles being totaled.
National Industry Issues Forum attendees also urged insurers to consider how the accuracy and completeness of initial estimates impact cycle time and overall shop and claims costs.
"We have some insurers that ask us not to write a complete estimate," said Boyd Dingman, owner of Dingman’s Collision Center in Omaha, Neb. "They say, ‘Let’s not put blend time on there,’ or ‘Let’s not put R&I trim on there.’ The car comes in and we don’t have blend time or the R&I time on the sheet. All of a sudden we went from the 15-hour job to a 25-hour job. That certainly slows our cycle time down because we didn’t schedule for 25 hours. They’re hurting our cycle time by asking us to write a short-sighted estimate."
A third resolution – passed with some opposition among attendees – called for paint companies to work with the estimating database providers to again study how actual time to perform blend operations on a panel compares to the time needed for full refinish of that panel.
SCRS installs officers, hosts NABC Pride Night
At a luncheon immediately following the National Industry Issues Forum, SCRS installed its officers and board of directors for the coming year. Pennsylvania shop owner and newly-elected national SCRS Chairman Don Keenan said getting member input and ideas will be important during his term.
"It’s very important to SCRS’ future that members tell us what it is that they want us to be working toward," Keenan said. "If we are your voice, then you have to tell us what you want us to say."
At this year’s Pride Night, a reception and program during Collision Concepts focused on efforts by the National Auto Body Council (NABC) to improve the image of the collision repair industry, four people received NABC Pride Awards for their charitable and humanitarian contributions beyond their normal job duties. Winners of the awards were:
- A. Michael Anderson of Wagonwork Collision Center in Alexandria, Va., who each year fills Easter baskets that he delivers – dressed as the Easter Bunny – to a local children’s hospital. He is the youth pastor of his church, has worked at several homeless shelters, and has worked with delinquent children through a mentorship program.
- Canadian Alex Szabo of Dundas Valley Collision Center in Dundas, Ontario, who is a member of the Salvation Army Citizens’ Advisory Board, and has served four years as founding chairman of the Dundas Food Drive for the Needy.
- Clint Arndt, a technician at the Wentworth Buick Body Shop in Eugene, Ore., who called authorities about a van with suspicious damage, helping lead to the arrest of a hit-and-run driver who killed a 12-year-old girl.
- Gigi Walker of Walker’s Auto Body in Oakland, Calif., who is actively involved in a model truck competition her association sponsors that involves shops painting toy trucks that are auctioned off, last year raising $3,000 for Toys for Tots.
Also during Pride Night, NABC Chariman Marco Grossi, announced an 18-month plan to raise $500,000 for Camp Mak-a-Dream, an 87-acre camp in Montana that is the only one in the country that allows children actively battling cancer to spend a week at the camp at no charge. Grossi said the $500,000 will enable the camp to earn a matching grant, giving it nearly all of the funds it needs to build an 11,000-square-foot medical facility at the camp. NABC will be asking members of the industry to donate and to place displays in their shops asking customers for donations.
"This is the biggest project this industry has ever undertaken," Grossi said. "As long as that building stands, all the campers and their families will know our industry cares."
The Collision Industry Conference (CIC) is taking to heart the expression: Focus on the small things and the big things will take care of themselves.
CIC’s "Estimating Committee" has launched an effort to identify all clips, fasteners or other parts that are generally damaged or broken when removed and therefore need to be obtained and replaced during vehicle reassembly.
"The ultimately goal is to reduce the time an estimator spends searching for fastener information in the process of writing an estimate, and second, delivering all the required fasteners to a technician before they’re needed, ultimately eliminating the wasted time our technicians spend searching for fasteners," committee co-chairman March Taylor said at CIC in Minneapolis in April.
Taylor said the committee recently hosted a meeting of fastener suppliers and estimating database providers in an effort to move the process forward. The committee is also seeking industry help.
"We are asking the industry to tell us what parts or fasteners are one-way," committee co-chairman Toby Chess said. "We will gather this information and then turn it over to the information providers to hopefully include in their systems, so that when we write an estimate it comes up saying these are one-way clips or fasteners or this seal needs to be replaced."
ADP backs away from data encryption
Also at CIC in April, ADP’s Rick Tuuri said his company is putting its estimating data encryption plans on hold.
"Although ADP takes the issue of data security and privacy very seriously, we also recognize that the industry is still working on all of the issues related to implementing and managing secure transactions over the Internet," Tuuri said. "Therefore, ADP has no plans to encrypt output files…and will not take measures regarding this issue until the appropriate standards and policies are created, or unless it is deemed necessary by clients, business partners or government regulations."
Later in the meeting, CCC Information Systems announced that it, too, would enable its customers to use Internet-based communication services to transmit estimate data (sometimes referred to as the "EMS extract").
"We are pleased to announce that CCC will work with all Pathways Estimating Solution customers to turn on the EMS extract on request, so that they may work with third parties of their choice," CCC’s Jim Dickens said. "CCC will take appropriate action to safeguard all estimate interests in the EMS data."
Supporters of "open systems" say the announcements signal a move toward enabling shops and insurers to exchange information via the Internet, which could increase competition and reduce pricing for electronic communication in the industry. Under open systems, for example, a shop may not be required to use a particular estimating system in order to exchange assignments and estimates with a particular insurer.
In other news at CIC:
- CIC’s new Operations Committee announced it is compiling a summary of the various claims administrative processes shops perform for insurers. INSIGHT’s Charles Baker, co-chairman of the committee, said the summary will be a step toward analyzing to what degree differences in insurer administrative processes lead to higher costs, and also may help lead to more standardization among insurers.
- Rod Enlow of USAA said he recognizes that insurer direct repair programs are shifting some of the claims processing costs from the insurer to the shop, and that shops should be compensated for those added costs.
"It’s a cost that we cannot continue to hide in the estimate," said Enlow, director of auto industry affairs for USAA. "I don’t want to see it in the frame time. I don’t want to see it in the refinish time. We either need to have it in the door rate or we need to have it as a line item. The costs have got to be somewhere because they’re real."
- CIC participants rating OEM and non-OEM replacement parts – not knowing which were which – installed during the meeting on a 1997 Ford Expedition gave much higher marks to the Ford fender and grille, but the non-OEM hood outscored the OEM version. The non-OEM hood and fender were both CAPA-certified. Ford Motor Company sent more than a dozen employees to observe the latest parts demonstration after Ford replacement parts were trounced by non-OEM at the CIC parts demo last December. The Ford contingent included quality control representatives for Ford and the stamping plant that made the parts used in the last demonstration, along with members of the United Auto Workers union.
Robert P. Strazzella has been named business director of U.S. Automotive Refinish, DuPont Performance Coatings. He replaces Jon D. Owen, who has been appointed global director, sales and marketing, for DuPont Qualicon, a DuPont sudsidiary, part of the DuPont Nutrition and Health business.
Strazzella has been worldwide business director for DuPont Herberts Automotive Systems, the automotive OEM division of DuPont Performance Coatings. In this role, he was responsible for the DuPont coatings business with DaimlerChrysler Corporation and General Motors from the DuPont Automotive headquarters in Troy, Mich.
Strazzella joined the DuPont Refinish Division in 1969 and held various sales and marketing positions, including New Orleans branch manager in 1980 and Atlanta branch manager in 1981. He was named marketing services manager for the OEM Finishes Division in 1987 and became finishes sales and marketing manager for the General Motors' portion of DuPont's business one year later. In 1990 he was named general manager-development for all DuPont Automotive business with General Motors.
Strazzella, a Wilmington, Del. native, has received two DuPont Marketing Excellence Awards for outstanding customer service and new business development. One award was for initiating a process management program for operating assembly plant paint lines that has enhanced vehicle finish quality and reduced costs. His second award was for developing an offering that included superior, environmentally compliant products and technical services that led to substantial new business and deeper customer relationships.
An executive of PPG Industries expressed satisfaction with a U.S. International Trade Commission (ITC) preliminary finding that replacement automotive windshields are being imported from China at prices injurious to American producers.
"Today's ITC decision is an important step in our industry's efforts to restore fair trade conditions in the U.S. for replacement windshields," said PPG's Garry A. Goudy, vice president of automotive replacement glass.
"Chinese imports have been offered at very depressed prices, creating serious problems for domestic producers," Goudy noted. "PPG, as one of the nation's leading producers, will continue to participate in the government's investigation to assure that problems from imports that American producers face daily are understood and acted upon by our government."
The ITC action has the effect of sending the case to the U.S. Department of Commerce, which will determine whether Chinese replacement windshields have been imported at "dumped" prices. If so, importers would be required to post a bond and then, upon affirmation of the ITC injury finding, cash deposits to offset the unfair trade practices.
The Commerce Department is expected to make its preliminary determination by early August. A final determination may not be issued until spring 2002.
In other glass news, PPG Industries has received the Good Housekeeping Seal for its automotive replacement glass.
"The seal of approval has come to signify the means of distinguishing the very best in any field," said PPG's Robert Chimka, director of marketing and development, automotive replacement glass. "We are very proud that PPG automotive replacement glass has received this distinction."
Founded in 1900, The Good Housekeeping Institute, which issues the seal, is the consumer product evaluation laboratory of Good Housekeeping magazine. Since numerous brands in the marketplace make their own claims and promises, the added review process of the Good Housekeeping Seal gives consumers an additional tool to use in product selection.
PPG is a leading manufacturer of original equipment and replacement auto glass. According to Chimka, "When car owners have a windshield or window replaced with PPG products, they can be assured that more than 75 years of experience in manufacturing original equipment glass help make PPG replacement glass parts the best available. With the Good Housekeeping Seal, they now know that our parts meet the quality assurance standards of one of America's leading consumer authorities."
PPG automotive replacement glass is available through most glass installers, including those participating in PPG PROSTARS, a national alliance of automotive replacement glass shops. PPG PROSTARS participants provide quality in-shop and mobile service by certified auto glass technicians backed by a nationwide warranty.
Copart, Inc. has announced the new trade name for its public auction facilities: Motors Auction Group - MAG. Copart's first two public auctions located in Detroit, Mi. and Chesapeake, Va. have been renamed Motors Auction Group. The new trade name also has its own website, at www.4mag.com.
Founded in 1982, Copart provides vehicle suppliers -- primarily insurance companies -- with a full menu of services to process and sell salvage vehicles through auctions, principally to licensed dismantlers, rebuilders and used vehicle dealers. Salvage vehicles are either damaged vehicles deemed a total loss for insurance or business purposes, or recovered stolen vehicles for which an insurance settlement with the vehicle's owner has been made. Operating 79 facilities in 36 states, Copart also provides services to other geographic areas through its national network of independent salvage vehicle suppliers.
An Illinois state Appellate Court has upheld most of a lower court's verdict in a nationwide class-action lawsuit against State Farm Mutual Automobile Insurance Co., ruling the country's largest auto insurer acted with "calculated deception of its policy holders" in supplying them with auto-body parts that critics claimed were substandard.
The verdict, handed down by the Fifth Circuit Illinois Court of Appeals in Mount Vernon, upheld most of the $1.2 billion awarded by a Marion judge and jury to 4.7 million plaintiffs nationwide in October 1999.
The appellate court reduced the award by $130 million because of damages that had been computed twice by the lower court.
The insurer is expected to appeal it to the Illinois Supreme Court, but lawyers representing the plaintiffs say the language the judges used in the 40-page opinion was unusually strong.
In other State Farm news, the insurer will stop taking new customers in New Jersey after a subsidiary lost more than $100 million last year, according to the state's insurance commissioner.
Regulators granted State Farm Indemnity permission to reject new car insurance policies after reviewing financial statements. The company insures more than 811,000 automobiles in New Jersey and collected approximately $79 million in profits in 1997 and 1998.
In 1999, the insurer went after high-risk drivers by offering them preferred rates and discounts up to 35 percent. The company stopped the practice in January, but not before losing more than $128 million last year.
State Farm will be allowed to write new policies for existing customers under the order and existing rates are unlikely to be affected.
Summit Software Solutions, Inc. has launched a new suite of software solutions designed for professional collision repair businesses. The new company, led by industry veteran Frank Terlep, has been created to provide collision repairers with "next generation" software solutions designed to meet changing collision repair process requirements worldwide.
According to Terlep, who has spent the last thirteen years designing, developing, and implementing software for companies such as CarStation.com, Mitchell International, Akzo Nobel, and Automotive Solutions, "Summit was created to offer collision repair businesses an alternative to commercial, off the shelf software that is too big, too complex, and not designed for today's claims and production centric repair facilities. Our solutions have been designed for those repairers that need and want simple, yet powerful software and connectivity solutions to help them achieve a sustainable competitive advantage. "
The Summit Claims, Operations, and Production Software suite allows the flexibility of traditional in-house network computing or Internet based connectivity, where the business can store all or portions of their data on a single server and operate multiple facilities connected via the Internet. The software also delivers advanced claims, operations, and production management functionality to provide the ability to process more claims, improve communication with customers, insurers, and vendors, and reduce cycle time through better scheduling and production controls. Summit also offers personalized licensing solutions to meet the needs of the most sophisticated businesses or repair networks.
"The possibilities are endless", states Terlep. "Professional repairers or repair networks now have an alternative option for claims, operations, and production management solutions that connect them with their employees, customers, insurers, vendors, and other business partners in the manner they feel best fits their business."
The Board of Directors of the Society of Collision Repair Specialists (SCRS), in addressing the issues surrounding data applications, has issued the following statement:
We believe:
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©2000 Collision Repair Industry INSIGHT
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