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Letter to the Editor
This article originally appeared in the July 2008 Issue of INSIGHT
©2008 Collision Repair Industry INSIGHT All Rights Reserved
I-CAR Appoints John Edelen President and CEO
Third Annual Midwest Collision Industry Forum a Success
PPG Opens New Training Center in Northern California
Rhode Island Supreme Court Overturns Landmark Verdict Against Former Lead Paint Manufacturers
Automotive Inventors Awarded at INPEX Invention Show
Progressive Launches MyRate Optional Behavior-Based Insurance Program
CarMax 1Q Net Earnings Fall 55 Percent
ASA States Position on Two Blend Deduction Issues
CIECA Launches Online CIECA University
SCRS Affiliate Leadership Conference
NABC Emergency Preparedness Brochure Offers Essential Advice
INDUSTRY UPDATE
The International Board of Directors of the Inter-Industry Conference on Auto Collision Repair (I-CAR) has appointed John W. Edelen to fill the position of President and Chief Executive Officer of the organization. Edelen has served as interim chief executive since November 2007.
Sam Pezzullo, Vice-Chairman of I-CAR’s International Board of Directors, said, “Since last November, at the request of the I-CAR Board, John Edelen has been serving as the Interim CEO of I-CAR. The Board is pleased with the progress that I-CAR is making under John’s leadership, and we want to see this progress continue. Through his appointment, we will be able to provide the organization with continuity, and build upon the early work that John has done with both the I-CAR Staff and Volunteers. John has resigned from his position as a member of the Board of Directors, and as Chairman, to assume this leadership role.”
Per the I-CAR Bylaws, Pezzullo, as Vice-Chair, will assume the responsibilities of the chairman position vacated due to Edelen’s resignation from the Board.
“The past months at I-CAR have been both challenging and rewarding,” commented Edelen. “The organization has stepped up to meet the challenges of these difficult times for the auto collision repair inter-industry, and for I-CAR. We are re-engaging with our customers, and taking their lead in finding ways to deliver increased value from the I-CAR training experience. Our Volunteers, Instructors, and Staff have the highest levels of commitment to the vision of I-CAR - that every person in the collision industry, current and future, has the necessary knowledge and skills relevant to their position to achieve a complete and safe repair,” he continued. “I am grateful for the support of I-CAR Volun-teers, Instructors, and Staff, and for the confidence that the I-CAR Board has placed in me. I commit to do all that I can to lead I-CAR in fulfilling the Mission for which it was created by the auto collision inter-industry, close to thirty years ago.”
“Extraordinary times require extraordinary measures, and in my 25-plus years involved with I-CAR, this is one of those times. As Chairman of the Search Committee, it seemed to me that the committee always ended up talking about finding someone with the talents that John had and was using in his position as Chairman of the Board and Interim CEO,” said Chuck Sulkala of ACME Body & Paint in Boston, Mass. “Several times we asked how long we could continue to have his expertise in the interim position as we searched for someone who had the mix of experience and skill sets that John was bringing to the organization. I believe this move will be the best short-term action for I-CAR, positioning us for long-term success to benefit the industry we serve.”
“I cannot think of a better person to lead I-CAR than John. John’s knowledge of I-CAR, the strong relationships he’s built within the inter-industry, and his passion for excellence to make I-CAR a stronger organization are a few of the reasons why the I-CAR International Board of Directors supported the idea of John becoming the Chief Staff Executive of I-CAR. Personally, I’ve learned a great deal from John, and am honored to work with him,” stated Mike Schoonover, President of Schoonover Body Works, who holds an Automotive Service Association (ASA) seat on the Board. “I believe he will do a great job leading the staff and volunteers of I-CAR, by empowering them to provide high quality education to the Collision Repair Industry.”
“As a member of the Board from the collision repair segment, I am extremely pleased that John Edelen has accepted the position of Chief Staff Executive of I-CAR. He has shown through his interim term that he has the experience and leadership skills to guide the very dedicated staff of I-CAR through these challenging times,” stated Bob Keith, Director of Environ-mental, Safety, and Production for CARSTAR. “The Board will work with John and the Staff to rebuild the organization by providing a high quality product with a high level of customer service which we as repairers strive to deliver every day.”
Edelen had been a member of I-CAR’s International Board of Directors for five years. He had been an officer at Allstate Insurance Company, responsible for Allstate’s auto claim handling practices. Over the past ten years, he has served on a number of for-profit and non-profit boards. In the past, Edelen has presented at inter-industry forums such as CIC, NACE, and IBIS.
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AASP of Missouri, ASA MOKAN, and SCRS MOKAN just completed their 3rd Annual Midwest Collision Industry Forum in Columbia, Missouri. Nearly 125 collision industry professionals from the Midwest and across the country participated in the one day forum that featured speakers Mike Anderson of Wagonwork Collision Centers;, Erica Eversman of Vehicle Information Services; Brett Butler, staff attorney for the Missouri Insurance Coalition; Chris Andreoli and Larry Shaw of Progressive Insurance; and George Avery and Don Porter of State Farm Insurance.
Mike Anderson conducted a rousing seminar on Positioning Yourself in the Collision Industry. Many of the attendees learned valuable ways of thinking outside of the box when it comes to marketing, production methods, and understanding the importance of being familiar with your financial information.
During the working lunch, the associations recognized the sponsors of the event: LKQ/ Keystone, a Platinum sponsor; 3M, DuPont, and Hertz Local Edition, Gold Sponsors; Ford Motor Company, Silver Sponsor; and Car Quest Auto Finishes, Insurance Auto Auctions, and JC Auto & Truck Parts, Bronze Sponsors. All sponsors received plaques of appreciation and participation.
Brett Butler, staff attorney for the Missouri Insurance Coalition (MIC), briefly outlined some of the accomplishments between the MIC and the collision repair industry.
Erica Eversman followed with an informative and thought provoking presentation on “short sheeting within the industry” and how this affects treatment of the vehicle owner and his perception of the repair process as well as his insurance company.
Chris Andreoli outlined some of the initiatives Progressive Insurance is researching and testing, and spent a generous amount time answering questions from repairers in the room.
Calamity nearly struck when George Avery and Don Porter of State Farm found their usual route to Columbia, MO blocked by flood water. With the assistance of some local Missourians and their GPS they eventually did manage to arrive and address the participants who were kind enough to extend their meeting attendance.
As one person attending put it, “It was a professionally set meeting about difficult topics, any one of which could have taken the full day. Sometimes it takes a little spirited dialogue to express the frustration that all parties are feeling within the industry. This meeting provided the opportunity for that to happen in a professional setting where all could take something constructive home with them to further whatever segment of the industry they represented.”
Ron Reiling of AASP of Missouri stated, “I feel that the dedicated professionals of the collision industry that attended the MCIF received the maximum return on their investment. A day away from their business to spend with likeminded professionals, receiving pertinent, first hand information, set in a professional environment, is a priceless opportunity.”
“Excellent content and speakers with an outstanding turnout from the repairer community, so if you missed it - you missed big time!” stated Bill Garoutte, Chairman of SCRS MOKAN.
Lastly Ben Steinman Past Chairman of ASA MOKAN noted, “It is very impressive that the three organizations worked together to host a national level forum in the Midwest with an array of speakers, all of whom excelled and exceeded any expectation. The training and networking that was available to those who attended was absolutely outstanding.”
Together these associations represent those on the cutting edge of the industry and by working together are able to represent many repairers by bringing in nationally known speakers who are current on the latest in national trends. This year’s event attracted people from as far east as Virginia and as far west as Montana.
PPG Refinish has opened a state-of-the-art business development facility in Concord, California to serve collision centers in the Northern California region. This is PPG’s second such facility in the important California market. A development center located in Rancho Cucamonga has been in operation for several years.
The center encompasses 4,680 square feet and is the only paint supplier-operated, fixed-location facility in North-ern California.
Mark Juell, PPG senior regional manager, remarked, “We wanted to deliver on a promise we made to our customers to provide the very best refinish solutions.... When we began planning for the coming waterborne change three years ago, we identified four key elements to success: our people, our products, the process we use to convert our customers, and a base from which we could train them. This is that base.”
According to Marlon Medina, senior technical instructor, this new facility will primarily focus on training and support for PPG’s Envirobase(R) High Performance and Nexa(R) Autocolor Aquabase(R) Plus waterborne basecoat systems. PPG felt waterborne training and support are key with the new VOC regulations soon taking effect for Northern California. The new center will also offer PPG’s fleet and industrial coatings training.
The center gives PPG customers the opportunity to learn about waterborne paint systems in a hands-on, “real world” environment.
Bill Troyer, PPG training manager, added, “As the market moves from traditional solvent-based coatings to waterborne basecoat it represents a new ballgame for shop owners and technicians. Waterborne requires different equipment and application techniques, so it’s important that our customers be properly prepared and trained.”
Rhode Island's Supreme Court has overturned a jury verdict that found former lead paint companies Sherwin-Williams Co., NL Industries, Inc., and Millennium Holdings LLC responsible for creating a public nuisance, rejecting a closely watched case that would have paved the way for potential suits across the country. The 4 - 0 decision ended a ten-year court battle and spared the companies from potentially billions in cleanup costs for thousands of contaminated homes.
The court ruled that the state's lawsuit should have been dismissed at the outset. It said that while lead paint may be a public health problem, it was not the companies' responsibility to clean it up because they, unlike landlords and homeowners, had no control over how the paint was used or if it was used in properties where children were poisoned.
INPEX(R), America’s largest invention trade show, announced several awards at the closing awards dinner for the 2008 trade show. Inventors Brian Seagriff, of Smithtown, NY and Terry Evans, of Charlotte, NC, exhibited their inventions June 11-14, at the David L. Lawrence Convention Center in Pittsburgh.
The inventions ran the gamut from concept to finished product, from high-tech to "why didn’t I think of that" items. Awards were presented in categories ranging from advertising to transportation as well as special awards from corporations and individuals. An international jury judged the inventions.
The following individuals won awards in the Automotive Category:
- Brian Seagriff – Silver Medal for Safety Lug Light, a hands-free light that holds the lug nuts while changing a tire or working on a vehicle.
- Terry Evans – Gold Medal for AlertUs – a warning system to alert oncoming travelers of a disabled or parked vehicle from up to 1,000 meters away.
INPEX, The Invention Show, is a unique trade show that showcases all types of new products and innovations that are available to business and industry. INPEX is sponsored by InventHelp(R), America’s leading inventor service company.
Progressive has launched an optional car insurance program that offers lower rates on vehicles that are driven in less risky ways. The behavior-based insurance program, called MyRate(SM), gives drivers a customized rate based on how, how much, and when their car is driven.
“MyRate is designed primarily for lower-risk drivers who are consistent and safe,” said Richard Hutchinson, Progressive’s MyRate general manager. “They drive at low risk times of day and they keep alert for others on the road. They don’t make fast lane changes or follow too closely behind other drivers so they don’t have to over-react or slam on the brakes.”
Drivers who choose to sign up for MyRate receive a small wireless device that plugs into a port in their car. The MyRate device allows Progressive to see how, how much, and when the car is being driven. Cars driven less often, in less risky ways, and at less risky times of day can receive a lower premium.
Drivers with more than one car can select which, if any, of their vehicles to enroll in MyRate. For example, a person with a second car that is not driven that often may enroll that car in MyRate but may decline to enroll their other vehicle if it is driven much more frequently or during higher risk times of day.
All participants can earn a first term discount of up to ten percent just for signing up. Then, depending on the program features in their particular state, their rate may go up or down at renewal depending on their driving habits. The impact on the rate could be anywhere from a 60 percent discount to a nine percent surcharge. In some states, there will also be a technology expense for the cost of the device and data transmission.
“Because MyRate could lead to a higher rate for drivers in some states, we want people to know that the program is not right for everyone,” Hutchinson said. “The good news is that customers who have signed up for MyRate can review their driving data in a secure part of progressive.com, see how their habits are affecting their rate, and, if they choose, make behavioral changes that can lead to real savings.”
Progressive will begin offering MyRate starting with Alabama in late June. A national rollout of the program will continue, pending regulatory approval, throughout 2008 and 2009. It will be available to customers who buy their policies directly or through independent insurance agents.
Progressive has been an industry pioneer in understanding that how you drive should affect what you pay. Its initial foray into usage-based insurance started in 1999 with a program in Texas called Autograph. Its next generation of usage-based insurance, TripSense(SM), became available in Minnesota, Michigan, and Oregon beginning in 2004. The states with TripSense will eventually be converted to the MyRate program.
Progressive has received patents on its method and system of implementing usage-based insurance and has licensed these methods to other companies. Progressive has service marks pending on the terms Pay As You Drive(SM) and Pay How You Drive(SM).
The Progressive Group of Insurance Companies, in business since 1937, is one of the country’s largest auto insurance groups, the largest seller of motorcycle and personal watercraft policies, and a market leader in commercial auto insurance based on premiums written.
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CarMax, Inc. reported results for the first quarter ended May 31, 2008. Total sales increased three percent to $2.21 billion from $2.15 billion in the first quarter of last year. This increase was led by a six percent increase in used vehicle revenues.
Comparable store used unit sales rose one percent for the first quarter. Total used unit sales grew ten percent for the first quarter. Net earnings decreased 55 percent to $29.6 million, compared with $65.4 million earned in the first quarter of fiscal 2008.
“The slowdown in the economy, the dramatic rise in gasoline and food costs and the related impact on consumer spending adversely affected our first quarter performance,” said Tom Folliard, president and chief executive officer. “For the first time in more than two years, we experienced a modest decline in customer traffic in our stores. Additionally, credit availability from our third-party nonprime lenders declined slightly during the quarter. However, solid execution by our store teams resulted in a small improvement in our conversion rate, and this, together with the benefit of an extra Saturday in the quarter, contributed to the one percent increase in comparable store used unit sales. Despite the slower-than-expected sales, our data indicates that we continued to gain market share in the late-model used vehicle market."
Wholesale unit sales declined two percent. During the quarter, wholesale industry prices for SUVs and trucks declined nearly 25 percent, which is approximately four times the normal depreciation expected over this period and well in excess of the depreciation expected over a full year.
“This is the most rapid depreciation of any vehicle segment that we have experienced in our 15 years,” said Folliard.
New vehicle unit sales declined 26 percent, reflecting the soft new car sales environment.
The total gross profit per unit declined by $237 to $2,564 compared with $2,801 in the first quarter of fiscal 2008. The majority of the decline resulted from the $192 per unit de-crease in gross profit per used vehicle.
First quarter net earnings declined to $29.6 million from $65.4 million in fiscal 2008.
During the first quarter, the company opened six used car superstores, and plans to open an additional eight used car superstores during the remainder of fiscal 2009.
CarMax continues to expand its car-buying center test. The company now has a total of five car-buying centers, at which CarMax conducts appraisals and purchase, but does not sell, vehicles.
The Automotive Service Association (ASA) board of directors has approved two position statements on blending issues – including the use of the term “blending” in regard to labor and material reductions; and also deductions related to a number of specific refinish procedures.
Both positions were presented to the board by the ASA Refinish Subcommittee during the association’s annual convention in Santa Clara, Calif. The subcommittee drafted the text under the direction of Dan Stander, Jerry Stander’s Collision Works in Littleton, Colorado, who is chairman of the subcommittee.
First, ASA does not support the use of the term “blending” to describe adjacent panel color matching or to represent labor and material reductions.
ASA supports the industry practice of using adjacent panels for a highly technical refinish process to facilitate color matching. ASA does not recognize the outdated term “blending” for labor and material reductions as listed in the current databases for information providers. Using current paint materials, this process – often referred to as “blending” – requires as many procedures as refinishing a new undamaged panel. ASA believes the additional labor and materials used by collision repairers to facilitate adjacent panel color matching should be acknowledged and approved of by information providers and insurers.
Second, ASA does not support deductions for repaired panel blend refinish, blend within panel, zone refinish, spot base, spot within panel, or spot paint with full clear.
ASA does not support the practice by any insurer to arbitrarily reduce refinish times for repaired panels, as published by information providers. This practice does not take into consideration the additional “not included” operations. A base coat deduction or refinish labor deduction will not account for the necessary materials or the additional skilled preparatory and spray labor required to properly restore a repair panel to pre-loss condition.
Additional labor and materials beyond those specifically published by an information provider are necessary to obtain a high-quality and proper repair. The practice of refinish-related deductions falsely assumes fewer procedures, less material, less time, and overall fewer steps to refinish a repaired panel compared to a new panel.
ASA believes the additional labor and materials used by collision repairers to refinish repaired panels should be acknowledged and approved by information providers and insurers.
“ASA’s Refinish Subcommittee believes it is important to address ongoing refinish issues in regard to blending and deductions, and encourages today’s leading information providers and insurers to recognize the additional labor and materials required for repairers to complete an accurate and high-quality repair,” said Stander. “These position statements were developed following careful examination of numerous paint manufacturer refinish statements and related industry documents.”
For 57 years, ASA’s Collision Division has sought to elevate the professionalism of the automotive repair industry by providing members and industry partners with information and services that will benefit collision repair professionals and the motoring public. In addition, the Collision Division Operations Committee actively works to address and improve a number of issues directly impacting the daily operations and profitability of independent collision repair facilities. The committee has four subcommittees in addition to the refinish subcommittee – including automobile manufacturer, crash parts, estimating and insurance subcommittees.
The Collision Industry Electronic Commerce Association (CIECA) launched its new on-line training and instructional platform. CIECA University can be accessed 24 hours a day, 7 days a week, 365 days a year by visiting www.CIECAUniversity.com.
Because the “University” is on-line, you can proceed at your own pace. Course modules vary in length, but most are only ten minutes in duration. Each module has a syllabus, or outline, to help determine your interest in the module. There is no charge to view any of the modules.
“CIECA’s leadership in developing data and communication standards for the Collision Repair Industry is transforming the way all segments of the industry communicate. CIECA University is a logical extension of CIECA’s expertise. Through a series of short, informative courses, CIECA is providing the industry, both members and non-members, with general and targeted instruction to assist in the implementation of electronic commerce,” said Fred Iantorno, CIECA’s Executive Director.
Current course offerings include:
- Why migrate from EMS to the new BMS (Business Message Specification)?
- What messages exist and who are the potential trading partners?
- Introduction to CIECA and the contents of the CIECA web site;
- How to register for the CIECA members’ only web site; and,
- Introduction to the CIECA members’ only web site.
Also planned are:
- What is the BMS?
- How do I read an XML message and can I figure out what is in there?
- Understanding data formats & technical verbiage; and,
- Planning your first implementation.
There is also a link for visitors to suggest future course topics. CIECA’s Education Committee is responsible for the development and production of all CIECA University modules.
The Society of Collision Repair Specialists (SCRS) is planning its third annual Affiliate Leadership Conference. While the agenda for the event has not been finalized, those attending can be assured that networking between affiliates will be emphasized, with representatives from each association sharing - formally and informally - the challenges they have faced and their success in dealing with them.
The SCRS Affiliate Leadership Conference is unique in that it spotlights and addresses the needs of affiliate associations and their members. In the process, it leverages the grass-roots strength of state associations utilizing a regional focus distinctive to SCRS as a national industry entity.
"A collision business can't succeed in a vacuum," noted SCRS Chairman Gary Wano. "This is truer than ever in today's 'Information Age' where industry issues arise and change in the blink of an eye. Tapping into each other's knowledge helps us remain a healthy, viable industry; it contributes to SCRS being more than the sum of its parts."
For example, one association may have experience in lobbying for collision-friendly legislation, another may possess insight on how to effectively work with their respective state insurance commissioner or attorney general, and a third may have expertise in improving an associations marketing effectiveness.
"The conference provides exposure to expertise and battle-tested strategies an attendee might not otherwise have time to seek out. In addition, the conference is a chance for the SCRS board to obtain feedback on how it is doing, and an opportunity for us to communicate our plans and intentions directly to the affiliates," added Wano.
SCRS Vice-Chairman Barry Dorn pointed out that the Affiliate Leadership Conference creates traction for pooling resources that can lead to the initiation of large projects.
"Sometimes trends, policies or legislation relate to more than one state or region," explained Dorn. "The necessary information gathering may require more effort and manpower than is normally available to a single association. But if two or three associations pool their resources together and coordinate a multi-state survey, for example, it becomes more cost effective and powerful. The SCRS Affiliate Leadership Conference is excellent at fostering and creating excitement for cooperation of this kind-the kind of collaboration that strengthens our industry and serves as the purest expression of 'Working Together is the Most Important Work We Do'."
The third annual SCRS Affiliate Leadership Conference is scheduled for Thursday, September 25th, from 8:00 a.m. to 5:00 p.m. at the I-CAR World Headquarters in Hoffman Estates, Illinois. Further information about the conference will be made available in the ensuing weeks.
Through its direct members and 35 affiliate associations, SCRS is comprised of 6,000 collision repair businesses and 58,500 specialized professionals who work with consumers and insurance companies to repair collision-damaged vehicles. Additional information about SCRS including other news releases is available at the SCRS Web site: www.scrs.com.
In the aftermath of the horrific hurricane season of 2005, the National Auto Body Council (NABC) produced, "Are You Prepared?"-an emergency preparedness brochure written specifically for collision repair facilities and their employees. The eight-page, full-color document is generously illustrated and includes such tools as an emergency preparedness insurance coverage review and supplies checklist.
Recent tragic events in America confirm that the need for this kind of information is as strong as ever. The outcomes of tornadoes in Iowa, floods in Wisconsin and fires in California remind our industry that disaster preparedness is a personal responsibility. Repairers simply cannot hope that an outside entity like an insurance company or a government agency will make a business or family whole again. Business owners need to be accountable for the safety and well-being of their businesses, their hard-earned assets, and their employees.
NABC created "Are You Prepared?" to help collision repairers in the event of such crises. It outlines the steps necessary to prepare for the worst, which could make it the most valuable document you own. The information in this brochure can make a real difference for your business, your family and our country, and thanks to NABC they are still available.
If you are interested in the NABC emergency preparedness brochure, copies can be downloaded at www.autobodycouncil.org. They are also available in bulk to be shipped, in which case all applicable shipping expenses will apply.
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