Your Source for Up-To-Date News and Research on the Collision Repair Industry
click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email
SUBSCRIBERS-ONLY
Today's News
Industry Stocks
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor
Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide
Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...
Feedback
Letter to the Editor
This article originally appeared in the February 2008 Issue of INSIGHT
©2008 Collision Repair Industry INSIGHT All Rights Reserved
EPA Auto Refinishing Regulation Includes Crucial Equipment and Training Requirements
Fox Body Shop Chain Files for Bankruptcy
Fred Haas Toyota World Named Certified Collision Center of Year
Copart Obtains Patent for VB2 Online Auction Platform
ASE Announces Officers for 2008
AchieveYourCareer and North American International Auto Show Launch Automotive Online Degree Section
CIECA Elects 2008 Board of Trustee Officers
Sherwin-Williams Named to FORTUNE’s 2008 List of 100 Best Companies to Work For
smart USA Announces U.S. Dealer Network
AAAS Endorses Quality Parts Coalition
CIC Update: Palm Springs CIC Panel Debates Repair Standards
INDUSTRY UPDATE
The Automotive Service Association has reported that the U.S. Environmental Protection Agency (EPA) has released the final rule for paint stripping and miscellaneous surface coating. This regulation enacts national emission standards for area sources engaged in paint stripping and various surface coating operations. Specifically included in the regulation are stricter requirements regarding toxic standards for smaller emitting sources in three industry sectors: paint stripping operations, surface coating that involves paints containing metal hazardous air pollutant (HAP) compounds, and auto body refinishing.
Specifically, the new rule requires existing area sources affected by the rule to implement these standards no later than three years from its publication in the Federal Register in January 2008.
Area sources are defined as those that have the potential to emit less than ten tons per year of a single toxic air pollutant or less than 25 tons per year of any combination of toxic air pollutants. Through compliance, these practices are designed to reduce overall toxic material consumption, which generally result in savings for the facility.
The proposed rule was published Sept. 17, 2007. The ASA submitted comments, generally supporting the automotive refinishing regulation.
Specific changes evident in the final rule include clarification on the sources subject to the rule and distinguishing between motor vehicles and mobile equipment surface coating. The final rule also clarifies that these standards do not apply to paint stripping and surface coating performed by individuals as part of a hobby, or for maintenance of their personal vehicles, possessions and property, or when these activities are performed for others without compensation. For motor vehicle and mobile equipment surface coating, all sources and individuals that spray more than two motor vehicles or pieces of mobile equipment per year are subject to the requirements in the final rule.
In the data-gathering stage, ASA urged the EPA to consider training qualifications, equipment requirements, and en-forcement as three critical components of the regulation. ASA believes this final rule adequately addresses these elements.
The regulation is a result of the Clean Air Act of 1990, which requires the U.S. EPA to identify sources that emit any of the 188 listed toxic air pollutants. The air toxics involved in these source categories include MeCl, and metal compounds containing cadmium, chromium, lead, manganese and nickel.
o
Reprinted with Permission of Reporter Bill Wilson and the Wichita Eagle
Fox Collision Center and Fox Real Estate, the two entities that operated a four-state chain of auto body shops, filed for Chapter 11 bankruptcy protection on January 23 in U.S. Bankruptcy Court in Wichita, Kansas.
Company president Todd Fox announced the filing in a statement issued through Wichita bankruptcy lawyer Ed Nazar.
In the statement, Fox blamed significant operating losses and the failure of a downsized company for the bankruptcy. Nazar said later that day that he would have no further comment.
Fox, who started the business in 1989, closed 18 collision repair shops in Kansas, Oklahoma, Missouri, and Arkansas on October 27, including four in Wichita. At that time, he claimed insurance company direct repair programs forced the company out of business.
Wichita locations, along with two Tulsa locations, immediately re-opened as Fox Body Shops but closed four days later.
The filing claims assets and liabilities between $1 million and $10 million, with the company bank, Marshall and Ilsley Bank of Milwaukee, the largest secured creditor at nearly $2 million.
Fox, who now lives in Aurora, Colorado, said in the statement that the bankruptcy filing is for liquidation. No reorganization is planned. He blamed M&I Bank for what employees say is at least two weeks of unpaid wages, saying the bank froze his payroll accounts when the companies ceased operations in October.
"At the time of suspending the day-to-day business, Fox Collision Center Inc. was current in its monthly loan payments to M&I Bank," Fox said in the statement. "Fox Collision Center Inc. did not anticipate the actions of M&I Bank in returning the payroll checks."
Fox said negotiations to release the money so he could meet his final payroll were unsuccessful, as were attempts to sell the company's real estate, equipment and location leases as a whole.
He urged former employees to file claims with the bankruptcy court for unpaid wages, despite the fact that such claims would be unsecured and thus unlikely to be covered by funds recovered by the bankruptcy estate.
Fox said former employees will receive W-2 statements from the company this month. The employee portions of the company's 401(k) plan are available for transfer.
Fox called plans to operate the four-location downsized company "ill-fated" and said the new company didn't carry on any business.
Fox has no current involvement in the auto repair business and is "looking for new business opportunities," he said in the statement.
Fox Collision Center - the operating company owning mostly vehicles, furniture, fixtures, and equipment - is the subject of most of the creditors and litigation. The company also faces wage claims with the U.S. and Oklahoma labor departments from former employees in Oklahoma.
Fred Haas Toyota World in Spring, Texas has won the Toyota Collision Center Shop of the Year Award for a record third straight year and fourth time overall.
“What separates the good from the great is the ability to win, over and over and over,” said Larry Mooney, Sherwin-Williams Automotive Finishes Corporation (SWAFC) Area Sales Manager about his successful customer. “Fred Haas Toyota World Collision Center has done just that. Winning the Toyota Certified Collision Center Shop of the Year Award for three straight years proves this shop is truly great. We are extremely proud to be associated with this fine organization, including its leadership team of Fred Haas, Mark Haas, Ronnie Bernal, GM, and Jeff Debner, Collision Center Director.”
The Fred Haas Toyota On-time Collision Repair Line completes approximately 70 vehicles a week or nearly 280 each month and each repair is guaranteed.
“We have the best people in the business, work on the best product in the business, and we use the best paint in the business,” said Jeff Debner, Hass Toyota World Collision Center Manager. “It sure makes my job easier. Plus, we are fortunate to have great ownership and executive management who are committed to the ongoing success of the collision center.”
Fred Haas Toyota World received its first award in 2002 and was recognized again in 2005, 2006, and now 2007.
Sherwin-Williams also congratulated Toyota of Irving, Texas, runner up in the annual contest.
“This is a tremendous year for our Toyota customers,” said Baron Hodo, SWAFC Area Sales Manager. “We’re thrilled to have two customers recognized for their positive efforts.”
David Shirley, Collision Center Manager at Toyota of Irving, stated, “It is always an honor to be nationally recognized in such a huge arena of the best. It takes great business partners, like Sherwin-Williams, the TMCC division, and the staff of Toyota of Irving, to accomplish such an award.”
Copart, Inc. has been issued Patent No. 7,315,832 by the United States Patent Office. This patent covers and protects certain unique processes employed by its online auction platform, VB2. The patent was issued on January 1, 2008.
The VB2 online auction platform is comprised of a preliminary bidding session that allows bidders to access auction items and submit bids during a pre-established extended period of time followed by a real-time virtual auction session, which begins at the conclusion of the preliminary bidding session. During the virtual auction session each item is offered at the high preliminary bid amount with the opportunity for continued bidding in a manner similar to a conventional live auction.
The VB2 platform provides buyers of used and salvaged automobiles a method to gauge the interest and price range of an item for auction before the virtual auction is actually conducted. Buyers can selectively monitor and participate in dozens of sales and place bids on the thousands of vehicles auctioned by Copart each business day. This allows buyers to allocate their resources to the vehicles they are most likely to buy. Also, the virtual auction component creates the excitement associated with a live auction while at the same time providing for easy Internet access to the sale without actually having to physically attend the auction.
Copart replaced the live auction process with the VB2 online auction platform during its fiscal year 2004. Currently all of Copart’s 126 North American locations and seven of its ten locations in the United Kingdom sell completely online utilizing VB2. In fiscal 2007 Copart sold over one million cars and vehicles over the Internet using VB2.
“We believe VB2 has had a tremendous impact on the success of Copart,” stated Willis J. Johnson, Chairman and CEO of Copart. “Since the introduction of VB2 the returns to our sellers have increased over 50 percent as vehicles which were previously purchased primarily by local buyers are now bid on and sold to buyers throughout the world. In fact, in our last fiscal year we sold to buyers from 94 different countries and in our last quarter more than one in every four cars we sold went to an international buyer. We are committed to being the technological leader in the online auction industry and the global leader in our marketplace.”
Copart, founded in 1982, operates 136 facilities in the United States, Canada, and the United Kingdom. It also provides services in other locations through a network of independent salvage vehicle remarketers.
The National Institute for Automotive Service Excellence (ASE) has announced the officers for the Board of Directors for 2008. Joe Torchiana, a Pennsylvania shop owner assumes the Chairman position, with Rick Ciesla of Chrysler as Vice-Chair, John Pfennig of Navistar as Treasurer, and Barry Bronson of Valvoline as Secretary. The 2007 Chairman, Colorado shop owner Stan Elmore, will be Past Chair.
“One of the key strengths of ASE has always been its volunteer board. The diversity of representation of the various business segments within the automotive industry is well reflected in our slate of officers for 2008,” said Ron Weiner, ASE President. As with most organizations, each ASE officer serves a one-year term in that position.
“This past year has been significant due to the transition in leadership at ASE,” said Torchiana. “Ron Weiner has served ASE well during his tenure and both the Board of Directors and Board of Governors wish him all the best in retirement. We also look forward to working with ASE’s incoming CEO Tim Zilke and his staff in 2008 and beyond.”
Incorporated on June 12, 1972, the National Institute for Automotive Service Excellence was established as a non-profit organization to help improve the quality of automotive service and repair through the voluntary testing and certification of automotive technicians and parts specialists. Today, there are approximately 400,000 ASE- certified professionals at work in dealerships, independent shops, service stations, collision repair shops, auto parts stores, fleets, machine shops, schools and colleges throughout the country.
AchieveYourCareer and North American International Auto Show Launch Automotive Online Degree Section
AchieveYourCareer.com, an online education directory, has launched a new web resource in conjunction with the North American International Auto Show, dedicated to assisting prospective automotive students earn an online degree.
"Due to the continuing rise in the number of vehicles on the road, demand for skilled automotive technicians is greater than ever before. The driving age population is growing and most families own multiple cars," said Michael Speicher, CEO of AchieveYour-Career.com. "That demand translates to jobs. We seek to provide prospective students with access to the country's highest quality automotive college degree online."
Employers are looking for technicians with training. The government estimates over 150,000 new auto and marine technician jobs in the coming decade. The following training programs prepare students to secure a job in the field.
UTI Automotive Training - UTI offers comprehensive online degree programs in auto repair, diesel mechanics and collision repair. From basic engine theory to automotive repair, from collision to customizing, UTI teaches the skills that are in demand.
NASCAR Technical Institute - UTI offers the only automotive training program in the world that is officially endorsed by NASCAR.
Motorcycle Mechanics Institute - The institute offers a customized online degree combining core motorcycle training with specialized manufacturer training.
Held annually in Detroit, the North American International Auto Show is one of the largest media events in North Amer-ica.
AchieveYourCareer.com, headquartered in Boston, provides access to the country's top online schools and learning centers, and allows users to browse, research, and receive information from the top online schools.
o
The Collision Industry Electronic Commerce Association (CIECA) Board of Trustees has elected the following officers for the year 2008:
- Chairman – Ed Weidmann, State Farm Insurance
- Vice Chair – Michael Lloyd, California Casualty Manage-ment Company
- Treasurer – Michael Marlowe, Keystone Automotive
- Secretary – David McClune, California Autobody Association.
Each of these officers will serve on the Executive Committee, which oversees CIECA business matters between board meetings and maintains the Board’s agenda. Robert Turchan, Pride Auto Body, representing Everest Partners, will assume the title of Past Chairman on the CIECA Executive Committee.
CIECA develops Collision Industry Information Technology standards and provides implementation guides for electronic commerce. Composed of people from all segments of the Collision Repair Industry, CIECA's goals are to deliver benefits to all participants through reduced development and support costs, lower cost of implementation, reduced barrier to entry, and faster development times.
The Sherwin-Williams Company has been named to the 11th annual FORTUNE “100 Best Companies to Work For” list. This marks the third time in the last four years that FORTUNE has named Sherwin-Williams to the list. The company ranked 98th on the 2008 list.
Christopher M. Connor, Chairman and CEO of Sher-win-Williams said, "On behalf of our 33,000 engaged, empowered, and appreciated employees around the globe, we thank FORTUNE for this recognition. We have great respect for the vetting process used to compile this list, and we're particularly gratified by the fact that two-thirds of our total score comes directly from surveys of more than 400 Sherwin-Williams employees selected at random. Our employees are the most important judges of the quality of our work environment. They make Sherwin-Williams a great company to work for and a great company to do business with.”
The full list and related stories appear in the February 4 issue of FORTUNE, available on newsstands January 28..
A driving factor for the list this year is that these companies excel in creating jobs. The 100 companies on the 2008 list added 67,000 employees to their payrolls in the past year and employ a total of nearly 1.6 million employees; up 16 percent from the number employed by companies comprising last year’s list.
To pick the “100 Best Companies to Work for”, FORTUNE works with Robert Levering and Milton Mosko-witz of the Great Place to Work Institute to conduct the most extensive employee survey in corporate America.
Of some 1,500 firms that were contacted, 406 companies participated in this year’s survey. Nearly 100,000 employees at those companies responded to a 57-question survey created by the Great Place to Work Institute, a global research and consulting firm with offices in 30 countries.
Two-thirds of the company’s score is based on the results of the survey, which is sent to a minimum of 400 randomly selected employees from each company. The survey asks questions related to their attitudes about the management’s credibility, job satisfaction and camaraderie.
The other third of the scoring is based on the company’s responses to the Institute’s Culture Audit, which includes detailed questions about pay and benefit programs and a series of open-ended questions about hiring practices, methods of internal communications, training, recognition programs and diversity efforts, etc.
smart USA Distributor LLC, a subsidiary of Penske Auto-motive Group, Inc., has announced its dealership network of 74 smart dealerships across the United States. In the U.S., 68 dealers located in 31 states have been certified by smart USA as ready for business and are expected to begin retailing vehicles immediately, subject to licensing and other required approvals. The remaining six dealerships are expected to commence retailing vehicles throughout 2008 upon completion of their facilities.
“We carefully selected dealers across the country who can best represent the smart brand,” said Dave Schembri, president of smart USA. “Each dealer participated in our detailed qualification process, including an assessment of reputation for exceptional customer care. We are very pleased with our dealership network and we welcome our dealers to the smart family.”
smart USA dealerships will be branded as “smart center” with the city name (for example – the dealership in Beverly Hills, California will be called - smart center Beverly Hills). The sites will feature a distinctive black façade with the smart logo overhead and a smart boutique where customers may purchase the latest in smart merchandise.
The Automotive Aftermarket Association Southeast, Inc. (AAAS) has joined the Quality Parts Coalition (QPC) as a partner in the ongoing effort to preserve competition in the automotive collision replacement parts industry.
During the past five years, the number of design patents awarded to the major automobile manufacturers has dramatically increased, growing to about 20 to 25 percent of the total U.S. patents awarded to those manufacturers. Collision parts account for 50 to 93 percent of the U.S. design patents awarded to the car companies. According to a QPC press release, automaker design patent cases could eliminate the entire alternative replacement parts industry, thus coalition participants believe, removing competition in the marketplace, without a permanent solution.
“The Automotive Aftermarket Association Southeast has long provided its diverse membership with strong leadership and commitment to quality in the parts industry,” said Eileen Sottile, executive director of the QPC. “The AAAS’s large membership and esteemed reputation will strengthen the Coalition’s reach and influence. We are pleased that the AAAS has joined us as we work to incorporate the ‘repair clause’ in the U.S. design patent law.”
Established in 1938, the AAAS represents the automotive parts manufacture, distribution, service and repair industry in Alabama, Georgia, and Mississippi. It works alongside the Alliance of State Automotive Aftermarket Associations, also a member of the QPC, to address issues facing the industry.
“The Automotive Aftermarket Association Southeast recognizes the significance of this struggle as vital to the future of our industry in and beyond the Southeast,” stated Randal Ward, president of AAAS. “Joining forces with the Quality Parts Coalition allows us to bring this to the forefront of consumer issues in the United States and move toward a permanent resolution.”
The Collision Industry Conference (CIC) Repair Standards Committee continued its work by convening a panel at CIC in Palm Springs, California, in mid-January to discuss the pros, cons, and potential initial steps of developing industry standards for collision repair work.
Although no over-arching decisions or action plans came out of the discussion, a number of interesting points were raised by participants.
Mike Quinn, co-owner of the multi-location 911 Collision Centers in Las Vegas, Nevada and Tucson, Arizona, was among those who said repair standards could help level the playing field in the industry.
“I believe we would benefit,” he said. “I think it would be helpful in training our technicians. We have to become more efficient. And the key to efficiency is standards. We’ve got a lot of standards in place in the industry. We just don’t have any standards for repairs. I think there’s a lot of fear associated with standards among repairers.”
Some of that fear could be justified, some panelists said. Industry consultant Rod Enlow said standards – that are quantifiable by an independent third-party – are needed in the industry to ensure repairers are returning vehicles to the road in a safe condition. But, he said, standards also can give rise to increased litigation if attorneys can point to a measurable way to gauge performance.
California attorney Cory King agreed. “You would be creating a cottage industry with the standards for many people in this room to become experts on either side of that litigation,” he said.
During this and several presentations on the topic of standards over the last year, I-CAR’s “Uniform Procedures for Collision Repair” (UPCR) have been discussed as a possible basis for repair standards. But in Palm Springs, Jeff Peevy, I-CAR’s director of field operations, said I-CAR lost significant money developing the UPCR a decade ago – and the procedures are still available at I-CAR’s website – but has found no widespread support or interest in the adoption and use of UPCR.
Several panelists discussed the need in any standards development to ensure there are incentives for those who meet such standards – or disincentives for those who do not. That does not exist in today’s market, panel moderator Scott Biggs of the Assured Performance Network said.
“I still haven’t figured out how an insurer justifies paying the same exact door rate (to different shops) and never getting the same exact product,” Biggs said.
Steve Nantau, collision repair engineering supervisor for Ford Motor Company, agreed with the need for an incentive system with any standards. He said some automakers, for example, will not sell certain parts to a shop unless it has met certain standards showing it is equipped and qualified to repair that particular vehicle. Every manufacturer, he said, has paint standards that its dealers have to meet.
“We publish those, and the dealers have to follow those or we won’t pay them,” he said. “And they may have to have technicians trained how to do diesel engine repair, for example, or we won’t pay them. The problem we have in this industry, I think, is there is no penalty or anything that would give anyone a real incentive to do anything that’s out there in the way of a standard. That’s the thing that’s missing.”
Tony Molla, who chairs the CIC Repair Standards Committee, said he thinks the industry cannot wait to develop standards until “an improper repaired vehicle causes a huge issue.”
“It is incumbent upon us as an industry to take charge of our own destiny,” said Molla, the vice president of communications for ASE.
As he has at previous presentations by the committee, Molla said any move toward development of standards should start with the elements of standards already in place.
“I’d like to tell you 100 percent of the collision repair industry is ASE certified,” he cited as an example. “Twenty-five percent is. That’s disgusting. That’s a shame. Sixty-five percent of the mechanic side of the business is ASE certified.”
But he also cautioned that no one should look at development and adoption of repair standards in this industry as a quick or easy project.
“You’re talking about probably at least a one-generation problem here, maybe two,” he said. “It’s not going to happen overnight. But let’s begin by taking advantage of what we do have.”
Feedback
Have a comment about this article? Send Email to Editor, INSIGHT's Editor
©2008 Collision Repair Industry INSIGHT
All Rights Reserved
FEATURED
LINKS:
INSIGHT Supports the NABC!
Do You?