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Letter to the Editor
This article originally appeared in the January 2005 Issue of INSIGHT
©2005 Collision Repair Industry INSIGHT All Rights Reserved
Insurer Restrictions on Lighting Replacements Escalate after CAPA Report
MQVP Questions CAPA Lighting Study
CAPA Lighting Test Data Available to Public at Website
U.S. Rep. Towns Will Reintroduce Right to Repair Act in 109th Congress
SCRS Circulates Petition in Support of Two-Way Information Exchange
Valspar Q4 Earnings Up 65 Percent
Allstate Asks DRP Shops to Complete CCAR Training
Summit Software Offers Interface with Reynolds ERA Dealer Management System
ADP Corrects Reduced Refinish Times October Error
A-coat Select National Benevolence Program Participants Donate Vehicles
Ford Now Has 100 Shops in CCRN
INDUSTRY UPDATE
The Automotive Service Association (ASA) has praised the Certified Automotive Parts Association's (CAPA) release of two studies on automotive replacement headlamps and their compliance with the Federal Motor Vehicle Safety Standard (FMVSS) 108.
FMVSS 108 provides standards for the performance of automotive exterior lamps and reflective devices and is required for both original equipment manufacturers (OEMs) and the aftermarket replacement companies.
According to CAPA's study, 87 percent of the independently manufactured replacement headlamps tested in two studies failed to conform to FMVSS 108 photometric requirements and ten percent of the OEM replacement headlamps failed.
At least five major insurance companies have issued notices to their direct repair program participants restricting estimates as far as the use of aftermarket headlamps and reflective devices.
"The Automotive Service Association appreciates CAPA's efforts in their formal review of specific crash parts. It's unfortunate that the National Highway Traffic Safety Administration has not taken the initiative reviewing replacement crash parts being required in the repair of American automobiles. CAPA is to be commended for taking the initiative with these reports," said Bob Redding, ASA Washington, D.C., representative.
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The following is from a press release that was sent to INSIGHT from theManufacturers' Qualification and Validation Program (MQVP):
CAPA earlier released a document that reported findings from two compliance tests conducted on four part numbers of OEM and Independently Manufactured Automotive replacement headlamps. Due to the negative nature of this report, and conflicting recent testing results from competing independent labs, CAPA should withdraw its report or defend it by open and full disclosure.
“MQVP was mentioned in the second study dated May 13, 2004, so we felt compelled to review the findings,” said William Hindelang, President of MQVP Inc.
“MQVP Inc. requested from CAPA a full and open disclosure of all information surrounding these studies,” said Neil Stolman, Director of Operations. “We have sent 13 certified letters over a period of six weeks to Jack Gillis, Executive Director and members of the CAPA board. To date we have received no substantive, accountable response. All certified letters were signed for and confirmed receipt by the postal service tracking system.”
According to the MQVP press release:
CAPA’s interest and motivation behind this study may not be unbiased. Independently produced automotive replacement lamp manufacturers are not in the CAPA program and the two manufacturers in the MQVP program have resisted endorsing the CAPA 301 requirement as unnecessary. One has to wonder why CAPA would perform such a test on parts not in their program knowing that this issue would cause a negative reaction within the industry. Information provided in their report raises more questions about their own tests than they answer.
“Why would CAPA hide? What would CAPA hide?” asked Hindelang. “Their web site says they are a Not for Profit organization with a mission to be a consumer advocate and ‘promote price and quality competition in the collision parts industry, thereby reducing the cost of crash repairs to consumers without sacrificing quality.’ Unless this study’s results can be accurately and completely replicated, this is possibly just fear mongering. These and other independently produced parts previously passed DOT, FMVSS 108 requirements, and the manufacturers have some recent confirming 'pass results' from independent labs.”
“If lamps have a potential to be out of spec, we want to know and react accordingly, for both quality and, more importantly, safety concerns,” stated Neil Stolman.
The MQVP press release continued:
Essentially there has been no timely response of commitment from the CAPA organization to assure MQVP Inc. will receive open and full disclosure of the facts leading up to conducting and publishing the study on the internet. There are rumors of disagreement in the ranks of CAPA technical committee and their board over the results and approval of this study.
If CAPA believes firmly in both their actions, motivations, and the accuracy of results of this test project, then they should be agreeable to an open and full disclosure. MQVP suggests that CAPA should be willing to submit to a review by a panel of experts from the OEM and Aftermarket industries. A member panel should include an OEM and an Aftermarket product expert, a lab calibration and certification expert, a statistician, a FMVSS 108 and photometric expert, and a safety product engineer.
“If CAPA won’t agree to such an independent review or withdraw their study, then CAPA’s intent and motivation should be obvious and the credibility of the study findings should be discredited,” stated Hindelang.
The Certified Automotive Parts Association (CAPA) has announced that the raw test data which was compiled for both of its Lighting Studies is available by request through the CAPA website.
“This detailed backup data was requested by the lighting manufacturers and has been provided,” said Jack Gillis, Executive Director of CAPA. “As the nation’s only independent, third party, ANSI approved crash parts standard setting organization, we have always believed in full disclosure and these report results are certainly no exception.”
According to the CAPA press release, CAPA stands behind the test results and, to date, they have not been disputed. A complete overview of the test results has been available since July 23, 2004 at the website: www.CAPAcertified.org.
Interested parties may contact CAPA online, to submit an electronic request for the complete test data, which for both studies includes over 300 pages.
U.S. Rep. Edolphus Towns, D-N.Y., has announced that he definitely intends to reintroduce the Motor Vehicle Owners' Right to Repair Act in the 109th Congress.
"I look forward to reintroducing this legislation that will give motoring consumers the ability to choose where, how and by whom to have their vehicles repaired, maintained and serviced and to choose whose vehicle parts they wish to purchase. This legislation also allows motorists to work on their own vehicles," stated Towns.
Responding to an article in "CollisionWeek" that stated that he is backing off of support for the Motor Vehicle Owners' Right to Repair Act, Rep. Towns said that "the article mischaracterized his position." Rep. Towns further stated that "I strongly believe in the viability and the need for this legislation."
Vehicles that are 1994 and newer are equipped with computers that control the repair, maintenance, and parts re-placement on vital systems such as: brakes, oil changes, tire pressure, steering mechanisms, transmissions, fuel injections, and more. Often, the only way for motorists to have these systems and their "entire" vehicle repaired and parts replaced is to return to the car dealerships.
The Motor Vehicle Owners' Right to Repair Act allows motorists to choose car dealerships or independent repair shops or work on their own vehicles.
"While my opening statement at the congressional hearing on this issue expressed my optimism for a negotiated deal, until a fair compromise is reached, I remain committed to this important legislation. I am in no way 'backing off' as the article indicated," said Towns. "Nearly 14,000 automotive independent repair facilities are located throughout New York, and an approximate total of 495,000 aftermarket facilities exist throughout the United States. Unless these independent repair facilities have the ability to repair the entire vehicle, they will lose business and will be forced to lay off employees. I support jobs and small business and the right of consumers to choose what is good for them and their pocketbooks," continued Towns.
A spokesman for Rep. Towns told "CollisionWeek" that no one contacted their office for clarification or tried to get a quote from him or the Congressman.
The Motor Vehicle Owners' Right to Repair Act will be reintroduced in both the U.S. House of Representatives and the U.S. Senate with new bill numbers. The 108th congressional session concluded with a total of 118 bipartisan cosponsors.
The Society of Collision Repair Specialists (SCRS) is circulating a petition in support of two-way communication between like estimating systems.
This is the ability to electronically transmit and receive the vehicle owner’s assignment information, estimate, supplement or attachment(s) between one or more service providers (repairer, insurer, appraiser, etc.) with the same collision estimating software, regardless of whether a DRP relationship exists between the companies.
“Two-way communication, as SCRS defines it, would eliminate many of the inefficiencies inherent in the current claims handling process, most specifically the re-keying of the estimate,” stated Lou DiLisio, SCRS Chairman.
The most frequent example of duplicate entry occurs when a customer walks into a repair facility with a hard copy of an insurance estimate. At that point, the collision repairer must take the time to re-enter administrative data and estimate lines and potentially reconcile any differences.
Dilisio added, “In some instances, a repairer will spend twice the amount of time matching up estimate dollar amounts as he or she will to re-key the data.”
The SCRS petition asks the information providers to engineer into their products the kind of functionality used by most home and business software.
“When two people in two different locations use the same word processing software,” explained DiLisio, “no one thinks twice about sending files back and forth via e-mail, and then opening, reading, printing and editing them. We’re asking the information providers to allow something that isn’t much different.”
Two-way file transfer is currently being utilized by one insurer, although only for participants in its DRP network. SCRS believes a more open approach could result in significant time and money savings for repairers, independent appraisers and insurers alike.
“Preliminary research by the Information Technology Com-mittee of the Collision Industry Conference (CIC) reports an average of 27 minutes to re-key an estimate,” stated SCRS Executive Director Dan Risley. “The price of the redundancies is astounding. If you assume that the average repair facility re-keys one estimate per month or twelve per year — a conservative guess — the cost to the industry is millions annually.”
The topic garnered additional attention at the August Collision Industry Conference (CIC) in Chicago, when CIC’s Information Technology Committee moderated a panel discussion which included representatives from most of the major information providers. At that time, the industry formally requested that the information providers take a serious look at the subject and come up with a solution.
When little visible progress surfaced over the next few months, the Information Technology Committee scheduled another panel discussion on the same subject for the November CIC meeting during NACE week. This time, members of the insurance community and SCRS were included to unify the industry’s support.
As a further endorsement of this issue, SCRS developed an industry petition which was available at the SCRS booth during the NACE show. By the end of the exposition, SCRS had collected over 300 signatures representing various industry segments, including insurers.
A vigorous e-mail campaign has since been initiated, resulting in an excess of 2,000 supporters, including many SCRS Affiliate Associations.
SCRS is certainly not blind to the potential security and privacy issues involved with data transfer, but it also acknowledges that technical advances have made it possible to secure sensitive information in an online environment at high volumes.
“Two-way communication benefits all involved in the claims process—there’s no downside provided security and privacy issues are addressed,” concluded DiLisio. “Uniting the various industry segments to address workflow inefficiencies through technology is a great example of our motto, ‘Working Together Is The Most Important Work We Do.’”
If you are in support of the information providers providing two-way communication, e-mail: drisley7@comcast.net to add your name to the petition. Phone Risley at (708) 598-3384 with additional comments or questions.
Coating maker Valspar Corp. has reported that fourth-quarter earnings rose 65 percent despite higher raw material costs.
Quarterly earnings rose to $40.5 million, or 77 cents per share, from $24.6 million, or 47 cents per share, last year. The year-ago earnings included a charge of 29 cents per share. Revenue for the period rose four percent to $645.1 million from $619 million.
For all of fiscal 2004, earnings rose 27 percent to $142.8 million, or $2.71 per share, from $112.5 million, or $2.17 per share, last year. Revenue for the year rose eight percent to $2.44 billion from $2.25 billion a year ago.
Commenting on fourth quarter and full year results, Richard M. Rompala, Chair-man and Chief Executive Officer, said, "While our results for 2004 were at the low end of the earnings range we expected a year ago, we believe we performed very well given the challenging environment. We achieved year-over-year comparable sales and earnings per share growth of ten percent despite unprecedented raw material cost increases and shortages.
"Nevertheless, raw material pressures, which were partially offset by manufacturing efficiencies, reduced our fourth quarter gross margin by about two percentage points. We have responded aggressively with expense controls, continued focus on productivity improvements, reallocation of raw materials where necessary and across-the-board pricing initiatives. While we believe first half earnings comparisons will be difficult, we expect to achieve another record year in 2005."
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Allstate, the nation’s second largest auto insurer, is asking the more than 3,200 auto body repair facilities across the country that participate in its direct repair program to complete an auto body specific environmental and safety-training program.
Specifically, the company is encouraging its direct repair facilities to complete the non-profit Coordinating Committee for Automotive Repair’s Safety and Pollution Prevention (S/P2) training.
S/P2 is an online training program that focuses on safety and environmental issues specific to the repair industry, including proper material handling and disposal.
“Allstate provides first class service to our customers. We work closely with repairers to help ensure the quality of repairs and customer service provided to our customers and claimants,” said Allstate assistant vice president for claims Jim Murray. “A clean, safe work environment is good for repairers, the community and creates an atmosphere that promotes quality and customer service.”
Murray said most auto body repair facilities are cautious and conscientious when it comes to protecting the environment, but he says Allstate is taking a stand on the environment.
In addition to basic environmental issues, Allstate said the new training can also help repairers by improving overall safety inside shops by preventing unnecessary employee illnesses, injuries and dangerous situations that could lead to fires or explosions in repair facilities.
Allstate’s new environmental training guidelines are part of an overall enhancement of the company’s DRP. Other components of the new, redesigned program include expanded quality inspections of completed repairs, new quality rankings for repairers, and greater emphasis on new technology training.
According to Allstate, new environmental standards strengthen the power of its referral program for those customers that request help in choosing a repair facility.
CCAR, a 501(c)(3) not-for-profit organization, focuses on environmental and safety issues in the auto repair industry. The S/P2 program is also made available free of charge to automotive career/technical schools across the U.S., and currently more than 1,400 such schools representing over 120,000 students are enrolled.
Summit Software Solutions, Inc. has completed an interface between its body shop software solutions and the Reynolds ERA(R) dealership management system utilizing DMSConnect(TM), a new dealer management system interface solution.
DMSConnect provides dealer body shops that are on a Reynolds ERA system with the ability to import estimating system data into their ERA system plus adds varying levels of body shop scheduling, dispatching, production, and management capabilities.
This announcement indicates that Summit has achieved interface certification through Reynolds Certified Interface Program. Under the program, Summit has passed Reynolds’ rigorous interface testing to meet support, security, and compliancy with the Reynolds ERA dealer management system.
The Reynolds Certified Interface program creates interface components that provide vital access to and from the ERA dealer management system. The interfaces enable the bi-directional flow of integral data. With the certification, Summit is approved to distribute and market the interface.
Frank Terlep, President of Summit stated, “DMSConnect, our bi-directional Reynolds and Reynolds interface, can help dealer body shops reduce rising administrative costs by eliminating double data entry between their existing estimating system and ERA system plus increase productivity throughout the dealership. In one of our initial installs we were able to document the reduction of over 100 keystrokes per repair order plus dramatic improvements in the daily productivity of customer service representatives, parts personnel, and estimators.”
According to Summit, DMSConnect works with its entire CollisionRepairNet(TM) suite of products which means a dealer has several investment choices when it comes to interfacing their estimating data with their dealer system. By having several interface options the dealer can pick and choose the appropriate body shop software and investment to meet their individual needs.
ADP has issued the following statement:
Over the last several weeks, ADP has conducted a comprehensive internal investigation and audit regarding the reduction in refinish times that affected approximately ten percent of the vehicle files on our October CD.
ADP concluded that changes made to refinish times on the October CD were not supported by sufficient industry data as required by our operating policies and procedures.
Our clients were immediately notified and corrections were made to the November CDs which were distributed via overnight delivery.
Detailed instructions on how to process supplements together with a complete list of vehicle files affected have been published on our website (http://www.support.adpclaims.com).
A dedicated Client Services team will assist our clients with their individual needs and concerns.
ADP is committed to providing quality client service. We have enhanced our database operations processes with additional safeguards to ensure that we deliver reliable estimating tools to our valued clients.
Mike’s Auto Body, in Concord, California, is one of more than 50 shops across the nation this December that will be presenting a “new” used vehicle to a deserving individual this holiday season as part of the A-coat Select National Benevolence Program. Mike's Auto Body will present a 1998 van to each of two hard-working, single mothers.
Last year the group targeted a single week in December for the car give-away, to gain more recognition of the program and to increase the number of participants. This year the group is giving away twice as many cars with more than double the number of participants. More than 50 cars will be given away nationwide during the week of December 13, 2004.
What is unique about this program is that it is not just a Mike’s Auto Body effort but a community one also. Everything is donated. The vans were donated by Mercury Insurance and AAA Insurance of Northern California. Parts were donated by W/C Ford and W/C Chrysler. Mechanical inspections, safety checks, and tires were donated by Big O Tires. All told, more than 15 Local East Bay companies and over 50 people worked to get the two vans back in running condition. In addition, the body and paint technicians from Mike’s Auto Body donate their time and talents.
“We are very fortunate to be involved with such a wonderful program and are very excited to be able to give back to the community that has supported us for the past 32 years. This is our fourth year participating with the program and this will be the ninth vehicle we will be able to present to an individual, family and/or organization that is truly in need of reliable transportation. Repairing the vehicles is the easy part. With so many people in need, picking the recipient is always the hardest part,” owner Mike Rose commented.
Ford Motor Company has announced that it now has 100 dealerships participating in its Certified Collision Repair Network (CCRN).
The goal of CCRN, launched in November of 2003, is to improve the quantity and quality of collision repair jobs moving through Ford dealership body shops and to improve customer satisfaction for both vehicle-owners and insurers, according to Garry Nelson, manager of the program for Ford.
"In addition to providing customers in each participating market 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," Nelson said.
He said that although about 1,500 Ford-Lincoln-Mercury dealerships have body shops and all are welcome to participate in the program, Ford expects about 250 to 300 - in an estimated 35 markets - to do so by early next year (2006).
In order to qualify for the CCRN, a dealership shop must complete a 10-week training and implementation process followed by an annual independent third-party onsite inspection of estimating procedures, repair quality, equipment availability, training levels, mandatory government licenses and customer satisfaction data. Equipment requirements include having an electronic frame measuring system. Three in-process vehicles are also reviewed during the certification process.
"The inspection involves putting the vehicle up on the hoist and getting under there with a flashlight to look for the seam sealer and check the welds, for example," Nelson said. "We scrutinize them pretty closely. We do it as if we were looking at them from an insurance company perspective."
The program also has requirements for the attractiveness of the customer waiting area, lighting levels throughout the shop, and ongoing customer satisfaction measurement.
Nelson said one key element of the CCRN program is a unique quality control program using an 8-point inspection and quality evaluation during the repair process.
Essentially, he said, the program requirements are designed to ensure that participating dealers are capable of complying with any insurer's direct repair program requirements.
Participating dealers receive a variety of performance reports, comparisons to similar sized shops, and marketing materials and support.
Enrollment in the program costs the dealer $12,000 to cover initial training and inspections, although the fee is reduced to $9,500 when four or more dealers in a market enroll. (Ford's goal is to roll the program out to multiple dealers in market by market rather than throughout the country.) The annual recertification fee is $3,000.
Nelson said the program is designed for dealership body shops with $1.5 million or more in annual sales. The current shops in the program have annual sales of as much as $11 million, he said, but average about $2.5 million.
Nelson said the program is currently open only to franchised dealers, not independent shops.
"We may find in maybe the second or even third phase of the program that there's a market area where there really aren't any good body shops at the dealerships, but the dealers want to recommend an independent shop," Nelson said. "Or in some smaller markets where a Ford dealership doesn't have a body shop, they might nominate an independent. But that's in a later phase of the program."
A list of the current Ford CCRN shops - now in Florida, Illinois, Kansas, Maryland, Michigan, Missouri, Ohio, Texas, and Virginia - as well as more information about the program, can be found at the CCRN website (www.collisioncare.com).
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