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Letter to the Editor
This article originally appeared in the January 2004 Issue of INSIGHT
©2004 Collision Repair Industry INSIGHT All Rights Reserved
NACE2003 Ends Era of Traveling Show
CIC Committee Debate: When Is a Referral Actually Steering
Awards Honor Many Individuals and Organizations in Orlando
Caliber Responds to California State Lawsuit
GM and I-CAR Form Training Relationship
NY Auto Dealers Group Breaks Ground for Education Center
AMI Awards Scholarship to William Bray
Ford Successfully Rolling Out CCRN Program
Akzo Nobel Salutes Women in Industry
INDUSTRY UPDATE
Organizers of the International Autobody Congress and Exposition (NACE) say more than 24,000 attended the event last month in Orlando, Fla. - about the same number as last year, but 5,000 fewer than in 2000, the last time the event was held in Orlando.
Though the five major paint companies did not exhibit at NACE for the second straight year, the number of exhibiting companies (488) and size of this year's tradeshow (176,000 square feet) were up slightly from 2002.
"We were concerned about the anticipation for next year overriding this show," Ron Pyle, president of the Automotive Service Association (ASA), which sponsors NACE, said at a press conference that included news about the show's permanent move next year to Automotive Aftermarket Industry Week in November in Las Vegas (see sidebar). "It was heartening to see that we had a very solid show."
Embrace change in chairman's address
NACE Chairman Vernon Crump kicked off the event's opening session with an address that focused on the need for the industry to embrace change. Crump is the body shop director for John Eagle Dealerships Collision Center in Dallas, Texas. In his address, he said that NACE is changing to ensure that it offers even more for those involved in all segments of the industry: independent shop owners, multiple-shop operators, dealership shop personnel, claims professionals, vendors and collision repair students and instructors.
"We're all in this together, forming a global, inter-dependent network," he said. "We need involvement from all segments of the industry to have a meaningful exchange of ideas and points of view, to connect this network. Honest, open communication is the first step toward solutions for a successful alliance."
In previous years, NACE chairmen have used the address as an opportunity to share their views - or that of ASA - on key industry issues or recent events. Crump offered no such comments on industry issues, a move he and NACE organizers say is designed to make the event more "all-inclusive." Pyle said that unlike previous chairman, Crump was not chosen from among ASA's Collision Operations Committee, which had helped shaped previous NACE opening addresses.
"As an organization, we met over a year ago and decided it was really time to realize that we had a responsibility to the whole industry, and to relinquish some of that bully pulpit and open it up to a broader spectrum of industry representation," Pyle said.
He said Crump would serve as chairman again next year, but that not limiting the choice of chairmen from among the ASA committee would broaden the pool of candidates, which now could even include an insurance company representative.
O'Reilly pulls no punches
But if "strong positions" were something show organizers wanted to avoid during the NACE chairman's opening address, that restriction definitely did not apply to news commentator Bill O'Reilly, who followed Crump's address with his own no-holds-barred view of everything from the war on terrorism to what the new movie "The Cat in the Hat" indicates about today's society.
O'Reilly, the host of "The O'Reilly Factor" cable news program and the "No Spin Zone" national radio show, said that he believes the war on terrorism should be characterized as "World War III" to bring the necessary urgency to the battle. Unlike past conflicts in which there were other countries that could be negotiated with, the "fanatical Islamists" aren't open to dialogue.
"You can't talk to these people. You can't reason with them. There's really nothing they want, other than to kill us, all of us," he said. "So you've got to accept that that there are people out there who there's just no dealing with, and the only way that we can survive this is to kill them. We need to kill them."
O'Reilly talked about the "loss of innocence" in today's society as kids are exposed to inappropriate images and messages through entertainment and the media. He cited the lyrics in some rap music and the crude humor in the movie "The Cat in the Hat" as just two examples. He said any parents who allow their children to have a TV or computer in their rooms without supervising what they are seeing are "just nuts." But he also criticized entertainment figures - and the companies that sponsor or reward them "for bad behavior" - for not taking responsibility for their actions.
"Everyone in America should be held accountable for what they do," O'Reilly said, drawing his biggest applause during the NACE address.
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It's a battle that has waged for years: At what point does an insurer referral of a customer to a shop become "steering," and what practices regarding recommendation of a shop by an insurer are unethical or even illegal?
The Collision Industry Conference (CIC) "Fraud Awareness Committee" recognized that it's a topic that isn't going to be resolved in an hour's discussion, but posed the question to a panel of shop and insurer representatives as CIC met in Orlando, Fla., in December.
For Jeanne Silver, owner of Butterfield Bodyworks CARSTAR in Mundelein, Ill., the line is fairly clear.
"A referral is a recommendation. If a consumer comes back and says, 'No, I want to get my vehicle repaired somewhere else,' the conversation or discussion should stop," Silver said. "If it doesn't stop after the consumer says no, it becomes steering."
Similarly, Gene Hamilton of Sports & Imports in Atlanta, Georgia, said anything beyond giving a vehicle owner a shop recommendation - if they ask for one - isn't right.
Panelist Michael Lloyd of California Casualty said his company asks if vehicle owners have a shop in mind; if they don't, the insurer explains its direct repair program, but if they do, the direct repair program isn't pushed, he said.
While 38 states have some sort of regulation regarding "steering" of work by insurers, John Eager of the National Association of Independent Insurers (NAII) pointed out that those laws only prohibit "coercion," or requiring the vehicle owner to use one particular repair facility as a condition of payment. This doesn't prohibit the insurer from explaining the benefits of using a shop in its direct repair program. He said insurer surveys find that 88 percent of customers using direct repair program shops have a high level of satisfaction with the repair and claims service.
But Hamilton pointed to a recent consumer survey by J.D. Power and Associates that found consumers are more satisfied if they choose their own shop, and another CIC attendee questioned insurers' acceptance of that level of customer satisfaction with DRPs.
"If I had 88 percent [customer satisfaction], I'd be in the shop trying to figure out what the hell is going wrong," Massachusetts shop owner Chuck Sulkala told Eager. "If it's not 95 percent, which most of the insurance companies are looking for and expecting, that's not acceptable."
Eager did not directly respond to questions about particular types of "steering tactics" he was asked about - such as the threat of delays in looking at a vehicle if taken to a particular shop. Instead, he said he doesn't believe coercion is much of a problem given how few complaints about it are raised by consumers to state insurance commissioners. Shop referrals actually give consumers more options, he said, and anyone who has been coerced to go to a particular shop has the right to file suit in the majority of states that prohibit coercion.
"Steering is very much alive and well," Kelly Swenson of Carty's Collision Center in Ontario, Calif., assured Eager. "I've experienced it myself in my own facility. My facility has a lot of DRP work get steered to me every day. Do I like it? No. Is it the way [the industry does] business? Yes. You talk about giving consumers options. I think that's smoke and mirrors. You're not giving them options. You're actually taking away their freedom of choice. We see this a lot where people's rights are taken away in such a way that people never really realized they had that right. And you are putting down other shops by saying 'they're not on our list,' or 'we can't guarantee their work,' or 'we can't get out there for two weeks.' You're taking business away from facilities that do very good work but may just be too close to another facility; maybe I'm a mile away from your DRP shop, so therefore I won't qualify to be on your list. You're really hurting a lot of independent businesspeople and taking away a true free market by doing that."
Other CIC news and discussions
In other news and discussion at CIC in Orlando:
- Dan Risley, executive director of the Society of Collision Repair Specialists (SCRS) said the association opposes efforts by insurers to require direct repair shops to use a particular estimating or imaging system. He said SCRS surveyed 15 larger insurance companies and found that 46 percent had such a requirement.
"SCRS is extremely disappointed in these results, and we'd like to see some significant change in that percentage over the next year," Risley said, saying the association will be contacting insurers about this issue. "SCRS believes that requiring a repair facility to have a specific estimating system is no longer a technology challenge; it is more of a mind-set change."
- The CIC Parts and Airbags Committee outlined its plan to complete an independent audit of the programs that evaluate or certify non-OEM parts. The goal of the audit - which will be funded by the programs being reviewed - is designed first to determine if the programs operate according to their written guidelines and procedures. More importantly, the audit will check to see if the programs' claims to identify parts that are equivalent to OEM are valid.
- The CIC Estimating Committee used four sample estimates to demonstrate the short-comings of the system used within the industry to calculate materials charges. The estimates showed four different types of work on a front door: paint damage only, repair of a small crease, replacement of the door, or replacement of just the door skin. All four of the estimates had nearly identical paint times, which are used as the multiplier to determine materials charges, yet the amount of materials needed - and the ratio of needed body materials to paint materials - varies widely between the four types of work.
As emcee Jeff Hendler kicked off the third annual Collision Industry Night of Achievement last month in Orlando, Fla., he said one thing linked all of those who would receive an award that evening.
"Lives have been changed by those honored tonight," Hendler said.
That sentiment held true not only that evening but also in the four days of industry events that followed in early December, during which more than two dozen collision industry individuals and organizations were recognized with awards and honors.
Here's a wrap-up of some of the awards and honorees announced in Orlando.
NABC presents Pride Awards
Hendler's sentiment about "lives have been changed" perhaps applied to no award winner better than Donald Christianson. The shop owner from Valders, Wisc., was one of four recipients of the National Auto Body Council (NABC) "Pride Awards," which recognize individuals and groups for their humanitarian efforts outside of their normal duties.
Christianson became a hero late last year after being among those caught up in the worst highway accident in Wisconsin history, a fiery crash involving 50 cars that resulted in 10 deaths and many injuries. Christianson repeatedly risked his own life by helping pull people from burning vehicles before collapsing with second- and third-degree burns over 40 percent of his body. He spent the next 78 days in a medically-induced coma, only being released from the hospital this past February.
Christianson received a standing ovation as he slowly walked to the stage at the Night of Achievement, which he attended with his wife, Nancy.
"This is quite an honor," he said. "I never expected to be recognized for anything I did that day. It's been a real honor to be involved with this industry. When the story hit the trade magazines, I received cards and letter from shops all over the country. It's really helped. It's just a pleasure working with this industry."
The other 2003 Pride Award winners were:
- Roger Cada, senior claims education and training instructor for State Farm;
- Shop owners Michael Quinn and Patrick O'Neill, owners of 911 Collision Centers in Tucson, Ariz.;
- Marco Grossi, owner of Collision Craftsman, a multi-shop business in Michigan.
Four more in "Hall of Eagles"
Four more members of the industry have been inducted into the "Hall of Eagles," an honor bestowed on fewer than 100 people in the past 13 years for their significant positive impact on the industry. To be inducted requires receiving the vote of at least two-thirds of the "current Eagles."
The newest "eagles" are Akzo Nobel's Tom Moreland, long-time industry trainer Toby Chess, State Farm claims consultant John Kent, and Rod Enlow, now a consultant after 35 years in the insurance industry.
CIC committee honored
The Automotive Service Association (ASA) and the Society of Collision Repair Specialists (SCRS) jointly presented the "ASA/SCRS Industry Award" to the CIC Estimating Committee, which among other activities has maintained a website for inquiries about the estimating databases, resulting in a number of positive changes for repairers. The committee is currently co-chaired by March Taylor, Tom Fleming and Chad Sulkala.
ABRN award scholarship
March Taylor, owner of Autobody Hawaii, received the annual "Industry Leadership Award" from Auto Body Repair News (ABRN).
The magazine also presented the Emil Stanley Merit Award to Kris Story, vice president of operations for Story Bros., Inc., in New Britain, Connecticut.
SkillsUSA/VICA winners
Recognized during NACE were the national winners of the SkillsUSA/VICA collision repair competition, held last summer. The secondary division winner was Nicolaus Ranker of Warrent Occupational Tech Center in Lakewood, Colorado. For the post-secondary division, the winner was Tim Pranke of North Dakota State College of Science in Wahpeton, North Dakota.
ASE top scorer
ASE’s Top Score Award winner was Raymond Jones, shop foreman at Central Georgia Collision Center in Warner Robins, Georgia.
BodyShop Magazine Award
BodyShop Business magazine presented its "Collision Repair Executive of the Year" award to Wisconsin shop owner Jim Keller. Keller started working as a technician in his teens, and was managing a dealership shop by age 21. In 1981, he opened his own shop, adding a second location after several years. In 1998, he sold his shops to a consolidator, buying them back two years later when the consolidator closed its doors.
CIECA awards
State Farm Insurance was named the "Electronic Commerce Company of the Year." Three State Farm employees - Paul Rutkowski, Darren Voth and Dave Meiser - received awards for outstanding contribution or outstanding leadership.
Mark Kovacs of Process Claims also received an "Outstanding Leadership" award; and Sylvia Schoch of USAA and Bob Thomas of CCC Information Systems were cited for "Outstanding Dedication."
Receiving a special recognition award from CIECA was John Webb of CSi Complete.
Shops praise leaders
The Everest Partners network of shops presented an award for "Extraordinary Contribution to Industry Unity" to SCRS Executive Director Dan Risley and ASA President Ron Pyle.
New award for 'quiet' work
J. Michael Seger, chief financial officer for Lehman's Garage in Bloomington, Minn., received the Collision Industry "Q" Award, a first-time honor presented to recognize "quiet," behind-the scenes efforts for his community, his business and the industry.
A $50 million lawsuit was filed by California Attorney General Bill Lockyear on December 4. According to the complaint, the collision repair facility consolidator allegedly took money from insurers and consumers for goods that were not provided and for services not performed. The following is a statement from Caliber Collision Centers in response:
The anti-business bureaucrats in the Bureau of Automotive Repair ("BAR") are at it again. This 17200 shakedown suit is based on the same unfounded allegations that BAR has unfairly trumpeted to the media over the last year. There is not a single new allegation, and the lawyers filing today's case have not independently investigated BAR's actions. Caliber has not - and does not - commit fraud.
Caliber is proud of its track record of quality collision repair. Caliber's repair work is backed by a lifetime warranty. Caliber has one of the highest consumer satisfaction scores in the industry, and receives few customer complaints.
Remarkably, BAR's sensationalist allegations are based on neither consumer nor insurer complaints. Instead, this is a desperate political attempt to justify a $112 million budget which funds the enforcement of outdated regulations that are inconsistent with industry best practices.
The facts will show that BAR is retaliating against Caliber for the two lawsuits that Caliber successfully filed against BAR earlier this year and for Caliber's refusal to accept BAR's baseless accusations and unfair treatment of small businesses in California.
The California legislature is due to begin a sunset review of BAR this month (The time period for the law that established BAR lapses in July, 2005.). Caliber personnel will be working to make other California repair facilities and associations of shops aware of what needs to be changed by the lawmakers to make BAR a fair and reasonable bureau.
General Motors and I-CAR have begun a training relationship this month. I-CAR will now conduct all GM body structural repair training in the U.S.
For GM, this relationship will greatly increase the availability and convenience of training on the body structural and collision repair of GM vehicles at I-CAR’s approximately 800 training locations nationwide. Technicians may have reduced travel and time expenses at more convenient locations.
The training relationship also will reduce redundancy for the technicians by providing GM certification credits and I-CAR Gold Class Professionals and Platinum Individual points for successful program completion. GM dealer and dealer-sponsored technicians will have the same inter-industry classroom experience and take the same program post tests as industry-wide I-CAR students.
Through I-CAR, GM training also will be available to technicians at independent shops that perform collision repairs for GM dealerships, allowing technicians to meet their GM Service Training Standards (STS).
“We believe that GM technicians, dealers, and independent body shops doing work for our dealers will find this arrangement rewarding with the number of locations I-CAR makes available to its students,” says Hershel Burson, manager, training integration, GM Service Technical College (STC).
As I-CAR students, all GM dealer body structural and collision repair technicians will complete their training by attending existing I-CAR collision repair programs, and the collision industry will experience an increase in training consistency.
Tom McGee, I-CAR executive vice president and CEO, commented, “The relationship between I-CAR and GM in developing and distributing collision repair training will increase the exposure of the GM repair recommendations to not only dealers, but the independent collision repair facilities .... We believe that this relationship is not only mutually beneficial, but actually benefits the collision industry and most importantly the owners of GM vehicles.”
The Greater New York Automobile Dealers Association (GNYADA), representing 650 franchised automobile dealerships in the metro New York area, has broken ground on its $25 million project, the Center for Automotive Education & Training. The center, a first-of-its-kind to be built and managed by an automobile association, will serve as a training ground for students preparing for careers in the industry as well as a continuing education facility for dealership and auto manufacturer personnel.
"This project is a good example of a public/private partnership that benefits the local and state economies by providing individuals with the necessary skills to obtain fulfilling and well-paying jobs in this area," said GNYADA President Mark Schienberg.
The facility, scheduled to open in spring 2005, will feature high tech service training areas, classrooms outfitted with the latest digital communications systems, lecture halls, and a simulated model dealership complete with a showroom and a working parts department. Lincoln Technical Institute will serve as GNYADA's education partner by providing service technician training to students.
Once completed, the facility will employee between 100-125 personnel and is estimated to generate more than $8 million in tax revenue over the next 25 years. The project has already received approval for $1.3 million in real estate and sales tax incentives support from New York City Industrial Development Agency (IDA) for its positive economic impact on the area.
The construction project has received support from New York State Energy Research and Development Authority (NYSERDA) in the amount of $250,000 for its energy efficiency and environmentally friendly construction and design.
The facility will house GNYADA's training programs and courses, and auto manufacturers, OEM suppliers, and dealership service providers will also use the facility for ongoing dealership education and training.
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William Bray, an estimator at Roth & Miller Autobody in Portland, Ore., received the "BodyShop Business Magazine Scholarship," at NACE, an award presented annually by the Automotive Management Institute (AMI) and Babcox Publications. The scholarship, which recognizes management-oriented members of the Automotive Service Association (ASA) Collision Division, included $1,000 to be applied toward Bray's expenses to attend NACE in Orlando, Fla., last month.
Bray has worked in the automotive service industry for nine years, including his first two years as a part-time employee at Roth & Miller while in high school. He is an ASE-certified estimator and is currently pursuing AMI's Accredited Automotive Manager (AAM) designation.
"I was very excited and honored to have been chosen," Bray said. "This was the second time I attended NACE, and I like the opportunity to attend management courses to help me with my career in this industry."
Bray has been active with the Northwest Automotive Trades Association (NATA) Collision Advisory Committee, and has assisted with the automotive scholarship fund-raising activities of NEAT (Northwest Education Automotive Training).
Back in 2001, Bray spearheaded an effort to arrange for weekend drag racing at Portland International Raceway to help reduce the problem of illegal street racing. About 100 racers, each paying $20, turned out for the first night of racing.
Bray, now 25, is engaged to be married, and hopes to someday become the third-generation owner of Roth & Miller, currently owned by his aunt, Camille Eber, wife of INSIGHT writer John Yoswick.
About three dozen Ford dealership body shops in five major markets have qualified for the automaker's "Certified Collision Repair Network" (CCRN), and another 17 are in the process of joining the network.
Over the next two years, about 400 of the nation's 1,300 Ford dealers are expected to join CCRN, which includes facility and equipment requirements, a 10-week training and implementation program, independent auditing of customer satisfaction and inspection of in-process and completed vehicle repair quality.
"In addition to providing customers with top-quality vehicle repairs, this new program is designed to meet the needs of both the insurance industry and dealers who want to enhance and improve their current operations," Dan Townsend, operations manager for the CCRN program manager, said.
Like many direct repair programs, CCRN has a list of equipment and facility requirements modeled after the definition of a "Class A" collision repair facility created by the Collision Industry Conference (CIC). But the program is unique in that shops also are required to have and use a computerized unibody and frame measuring system, providing both pre- and post-repair dimensioning reports tied to the overall process quality control program.
That quality control program includes an eight-point inspection and quality evaluation during the repair process, which the shop implements during the 10-week training period. The inspections of in-process and completed repairs by independent auditors also make CCRN unique among other programs and networks.
CCRN began in test markets in Michigan and Ohio and has been expanded into the Houston and San Antonio markets in Texas. Ford plans to add markets - generally those with four or more dealership body shops that can qualify - elsewhere in Texas and Florida and then move up the east coast to Maryland.
The automaker is also continuing to expand the Ford Motor Company Insurance Services, which allows those buying Ford vehicles to chose from among 13 different insurance companies for coverage.
"There are 835 Ford, Lincoln-Mercury dealerships set up and designed to service those who buy our insurance," Ford's Paul Szatkowski, marketing manager for consumer insurance, said.
Akzo Nobel once again honored a group of women as among the "most influential in the collision repair industry.
As part of the program, Akzo donated $10,000 to the I-CAR Education Foundation, for scholarships to nine women attending collision repair training throughout the country.
The guest speaker at the Akzo awards dinner was Janet Guthrie, who in the mid-1970s became the first woman to compete in the Indianapolis 500.
This year's honorees were:
- Karen Fierst, president of KerenOr Consultants, in Silver Spring, Maryland;
- Bertha Betrand, co-manager of Brian Cullen Body Shop in St. Catharines, Ontario, Canada;
- Teresa Bolton, collision repair and refinishing specialist for the National Institute of Automotive Service Excellence (ASE);
- Georgina Carson, editor of BodyShop Business in Cleveland, Ohio; and
- Eileen Haberman, vice-president and co-owner of Glen's Auto Body in Waukesha, Wisc.
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©2004 Collision Repair Industry INSIGHT
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