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Letter to the Editor
This article originally appeared in the December 2008 Issue of INSIGHT
©2008 Collision Repair Industry INSIGHT All Rights Reserved
FTC Issues Complaint Against CCC, Mitchell Merger
Travelers Named One of GI Jobs Top Military-Friendly Employers
Solera Holdings Acquires Inpart Servicos in Brazil
Assured Performance Network Marketing Book to Aid Consumer Awareness Program
I-CAR Education Foundation Names Scott Kruger Executive Director
CIECA Announces 10th Release of XML Standards
CIC Fair Trade Practices Committee Works on Direct Repair Criteria
CARS and NACE Draw Economy-wary Crowd to Las Vegas
INDUSTRY UPDATE
The Federal Trade Commission (FTC) has issued a complaint against the merger of CCC Information Services Inc. and Mitchell International Inc., claiming that the merger would obstruct competition in the market for electronic systems used in estimating damages done in the collision industry. These include estimates for the cost of collision repairs, also known as “estimatics,” and software systems used to value totaled vehicles, or total loss valuation (TLV) systems.
The FTC claims that the merger of CCC Information Services and Mitchell International would harm insurers, repair shops and car owners in the United States because of the reduction of competition in this already highly concentrated market, from three to two competing corporations. Auda-tex is the only other competitor. According to the FTC, prices would increase and innovation would decrease for consumers as a result.
The FTC voted 3-0 in favor of issuing a complaint. The Commission has also authorized its staff to file a complaint in federal district court.
According to the FTC, “Issuing a complaint is the first step in the administrative trial process. CCC and Mitchell will be offered FTC’s ‘Fast Track’ administrative trial procedure. The Commissioners are committed, subject to the bounds of reasonableness and fairness, to a just and expeditious resolution of any potential appeal that may be taken to the full Commission. Should there be an appeal, the Commissioners commit to make every effort to issue an appellate decision no later than 90 days after receiving a notice of appeal if there is no cross-appeal, or 120 days if there is a cross-appeal.”
CCC and Mitchell plan to challenge the FTC ruling.
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I-CAR International Board Chairman Robby Robbs has provided updated comments on the future of I-CAR in Canada.
“Following the Canadian Collision Repair Industry Survey and ensuing Town Hall meeting in Montreal, it is sufficiently clear that the market is seeking changes to the current I-CAR structure in Canada,” noted Robbs. “This recognition that the industry in Canada is seeking a different direction has prompted the I-CAR International Board to take measures designed to support the Canadian auto collision inter-industry in furthering options for the future.”
The I-CAR International Board of Directors has established a Canadian Transition Task Force (CTTF) to receive and evaluate potential options offered by the industry to address its future training needs.
“The Board established a Canadian Task Force roughly a year ago, to engage with the marketplace on business-model options that might better serve the needs of the marketplace and incorporate I-CAR products and services,” said Robbs. “At the request of that group, under the chairmanship of Roland Taube, work was undertaken and has led us to conclude that the market is indeed ready to support a different model for I-CAR in Canada in the near future.”
Robbs continued, “The role of Mr. Taube and his task force of inter-industry leaders has changed and is to now engage with the market on the development of proposals for a new business structure in Canada, and to evaluate these options.”
Over the course of the next sixty days, the newly formed CTTF will support Taube and his team by providing a Position Paper on I-CAR, and by supporting the development of a structured Request for Proposal to be used by the team in soliciting and providing a consistent structure for the potential options offered by the industry. This should facilitate, ultimately, a fair and consistent comparative analysis of proposals submitted, and the development of recommendations based on a consistent set of scoring criteria.
Robbs noted, “We would hope that proposals will be forthcoming in early 2009, for Mr. Taube’s team to consider and score. Once they are comfortable that they have solid proposals from which to review and recommend for Board consideration, they will turn them over to the CTTF. The CTTF will review the proposals and the recommendations of Mr. Taube’s Task Force, and take a ‘short list’ to the Board to decide with whom I-CAR will consider a licensing agreement.”
When asked further about the timeline, Robbs stated, “The Board has indicated that this must be resolved by the end of 2009. Beyond that point, we will no longer operate in Canada as a region of I-CAR International. This is why we have moved to establish this Canadian Transition Task Force. We want to make sure that any transition to a different model for the Canadian market takes place in an orderly, constructive, and positive way. The market continues to invest in I-CAR training and in the I-CAR Gold Class Profes-sionals(R) and Platinum Indi-vidual(R) programs, and we must ensure that the value of these is sustained and continues through this transition, and beyond.”
John Edelen, I-CAR’s President and CEO commented, “I want to assure the Canadian market that it is still ‘Business as Usual’ in Canada, for our current operation. We will continue to support the training needs of the Canadian market while the Task Forces and Board sort through the new look of I-CAR in Canada. We will ensure on-going communications with the industry to keep you abreast of developments and more importantly want to reinforce to stakeholders that we will honor our commitments. I-CAR will not turn its back on the Canadian collision inter-industry while this process is under way. We are looking to structure our activities in Canada in ways which will be more responsive to, and sustained by, the industry. The role of the Transition Team will be to guide us through this period, so that we don’t lose the momentum and the good will of the industry, and so we come out of this stronger and better positioned to continue I-CAR training, programs and services in Canada, albeit under a different organizational model.”
“This isn’t about a loss of a commitment to the Canadian market,” said Edelen. “This work has been about identifying and recognizing the need for change, so that I-CAR’s commitment can be sustained by the Canadian market. We believe that the steps the Board is taking will lead us to the right and sustainable solutions for the Canadian inter-industry. In the meantime, our commitment remains high and we are doing everything under our current structure to continue to address the training needs of the industry.”
The Alliance of Automotive Service Providers (AASP) has elected its Executive Committee for 2009-2010. AASP will be led by Massachusetts shop owner and educator Rick Starbard. The election was held at AASP’s board of directors meeting on November 7, 2008, in Las Vegas, Nevada.
The following AASP board members will join Starbard on the Executive Committee:
- Jeff Walter, Zimmerman’s Auto Service in Mechanicsburg, Pennsylvania
- Steve White, White Auto Body in Florissant and O’Fallon, Missouri
- Nick Kostakis, Angelo’s Auto Body in Irvington, New Jersey
- Jerry Schantz, AASP-Pennsylvania in Harrisburg, Pennsylvania.
Starbard does double duty as president of Rick’s Auto Collision in Revere, Massachussetts, and as collision repair instructor at Lynn Technical High School in Lynn, Massachussetts. He currently serves as president of AASP-MA/RI and is a member of both the Collision Industry Conference (CIC) Database Task Force, and of the Joint Operating Committee of the Database Enhancement Gateway (DEG). Starbard holds I-CAR and ASE certifications.
Starbard stated, “I look forward to working with such a diverse group. One of my primary goals is to see AASP National grow further by seeking out more states to become AASP affiliates. By harnessing the numbers that state affiliates bring to the table, we should be able to seek out more national benefits that can be passed on to all of our members. States also need to know how sensitive AASP is to each affiliate’s need to operate as an independent organization. The makeup and needs of each state are so different that no national entity can dictate their operation and mission.”
The Alliance of Automotive Service Providers is a coalition of associations which serves over 7,800 members of the automotive service industry. In a spirit of mutual cooperation and support, Alliance participants are committed to sharing information, knowledge, and other resources for the benefit of the members they serve.
Mitchell International, Inc., a provider of information, workflow, and performance management solutions to the collision claims and repair industries, had record sales of its ABS(TM) and ABS(TM) Enterprise shop management solutions at this year's National Autobody Congress Exposition (NACE), despite the difficult economic climate.
Sales of Mitchell's business management solutions were up by nearly 20 percent over the previous year. A company press release attributed increased sales to the ability of Mitchell's business management solutions to increase operational efficiency and supply superior decision-support information, as well as to Mitchell's superior customer support and its 60 years of collision industry expertise.
"We realize that this is a challenging time for the Collision Repair Industry. Our goal at Mitchell, as it has been for the past 60 years, is to continue to support collision repairers by providing them with powerful solutions like ABS and ABS Enterprise. Mitchell helps collision repair facilities get better control over their business operations, which can be even more important in a difficult or down economy," said Marc Brungger, Executive Vice President of Auto Physical Damage Solutions at Mitchell. "We're proud that record numbers of repairers continue to choose Mitchell products to out-perform the competition no matter what the economic environment, and we remain committed to continuing to invest in these solutions to make them even more powerful. The key for any successful collision repair facility is to focus its energy on what it can control — its customers, its business operations, and its trading partner relationships."
ABS Enterprise and ABS streamline shop operations and provide repair facilities with a comprehensive solution for optimizing their business performance by automating business functions and providing insight into key performance metrics. The products automate many everyday tasks, such as parts-pricing, job costing, scheduling of repairs, and integrated e-mail and event messaging capabilities.
Mitchell International facilitates millions of electronic transactions between more than 25,000 business partners each month.
With the demand for talent on the rise, Travelers has recognized the value of the skills, technical knowledge, and motivation military veterans bring to the workplace and is actively recruiting this group of individuals. As such, the company has been named to the highly competitive 2008 G.I. Jobs Top Military Friendly Employers List.
“We find that military veterans bring qualities of dedication and discipline to their roles, and that they seek and accept responsibility readily,” said Jim McMahon, director of Talent Acquisition, Travelers. “At the same time, these people have done so much for our country. It’s the right thing to do.”
For the past several years, Travelers has focused efforts on hiring transitional military and junior military officers for positions as project and product managers within Personal Insurance and as nurse case managers and property and auto adjusters within the Claim organization. As many hiring managers throughout the company have found, the advantages of hiring military personnel include:
- They often have existing, transferable skills, along with a willingness to learn new skills.
- They’re trained to lead by example.
- Veterans understand the true nature and necessity of teamwork.
- They perform well under pressure.
- Because of their service, they usually are aware of global and technological trends.
- Veterans frequently have triumphed over great adversity.
In addition to military-friendly hiring practices, Travelers is also known for excellent benefits for military personnel, including benefits continuation and leave of absence policies. In 2008 the company was also a national finalist for the 2008 Secretary of Defense Employer Support Freedom Award, the highest recognition given by the U.S. Government to employers for their outstanding support of their employees who serve in the National Guard and Reserve.
“Travelers provided extraordinary support to me and my family throughout both my deployments,” noted Mark Lear, regional vice president, Bond & Financial Products, who was deployed with the Missouri Army National Guard in 2001 and 2006. “I have been able to serve my country and further my career. Both times I’ve returned to Travelers and been awarded greater responsibility.”
Travelers was selected for the list out of a pool of 2,500 eligible companies (minimum of $1 billion annual revenues). Criteria for the rankings included assets dedicated to military hiring, Reserve/Guard policies, percentage of veteran new hires, veteran training programs, and the company’s previous three years’ rankings. This was Travelers’ second year being named to the list.
The Travelers Companies, Inc. is a leading property casualty insurer selling primarily through independent agents and brokers.
Solera Holdings, Inc., a global provider of software and services to the automobile insurance claims processing industry, has completed the acquisition of Inpart Servicos Ltda. (Inpart). Inpart is a leading electronic exchange for the purchase and sale of vehicle replacement parts in Brazil. Inpart has developed an extensive network of parts suppliers as well as an impressive customer list that includes some of Brazil's leading insurance companies and collision repair facilities.
"This acquisition further demonstrates our commitment to expanding our product and service offerings. We are very excited about the accomplishments already achieved by the Inpart team in the Brazilian market. In addition, we will be exploring the opportunity to expand the Inpart offering to other Latin American markets that we already service," said Tony Aquila, Solera's chairman and chief executive officer.
"This acquisition is a key milestone for Inpart and will help extend our success in helping insurance companies and collision repair shops work better together by bringing purchasing efficiency to parts procurement in the collision repair process. With the scale, domain expertise and relationships Solera brings to the table, we believe we can take Inpart to the next level," said Edgard Lobo Baptista Pereira, one of the co-founders of Inpart.
Solera is active in over 50 countries across six continents. The Solera companies include Audatex in the United States, Canada, and in more than 45 additional countries, Informex in Belgium, Sidexa in France, ABZ in The Netherlands, Hollander serving the North American recycling market, and IMS providing medical review services.
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Assured Performance Network, a non-profit consumer advocacy organization and legal cooperative, has announced that all proceeds from ongoing sales of its popular marketing book, Reinventing Collision Repair, will be donated to help fund a national consumer awareness program.
The book, in its third printing, exposes cutting-edge concepts, strategies, and tactics for body shop marketing, sales, and customer retention. Authored by Scott Biggs, the book gives a fresh perspective to the reader on how to compete and win in the modern Collision Repair Industry. The first chapter, “Stealing the Insurer’s Playbook,” gives a hint at the unique perspective Biggs offers in this book.
The core of the book illustrates to the reader how to conduct a marketing campaign that reaches consumers, wholesale accounts, and much more. There are numerous examples and samples of actual marketing programs shops have used successfully. The book begins with a twist by examining the strategies that insurers are using effectively and how body shops can use similar or even better techniques to regain ownership of the consumer. The book also details strategies and opportunities for the shops to diversify and expand their profit centers. It also provides specific details on selling techniques for the estimators on the line as well as customer retention and customer satisfaction techniques.
Biggs commented, “More than any time, shops must regain ownership of the consumer and their future. The key is effective marketing, sales, and customer retention. Shops are not at the mercy of DRPs for their volume if they look around at what other industries have done successfully, and at the enormous opportunities hidden by legacy thinking.”
The consumer awareness program will be launched across the U.S. in select markets early in 2009 and will run throughout the year. The awareness campaign will feature key information consumer should know about how to select a qualified collision repair business and what their rights are throughout the claims and repair process.
Assured Performance Net-work is the world's largest collision repair business network, with over 4,000 qualified, independently owned collision repair businesses located throughout the U.S.
Scott Kruger has joined the staff of the I-CAR Education Foundation as Executive Director as of September 29, 2008. In this role, Kruger will be responsible for implementing the new mission of the Education Foundation which focuses on fundraising, grant research, and the distribution of scholarship funds to schools and students involved in collision repair.
“I am very pleased to be joining the I-CAR Education Foundation,” said Kruger. “It is exciting to be working with the dedicated group of professionals from the collision industry that both serve and support the Education Foundation. There are many programs and priorities that we will focus on in the coming months, but my primary goal is to make sure that the Education Foundation supports the collision industry by enriching opportunities for students in collision education. These students are working toward a lasting and rewarding career in collision repair and our goal will be to help them get there.”
Kruger is a lawyer and has more than ten years of fundraising experience. He has joined the I-CAR Education Foundation after serving as the first Executive Director of the John Marshall Law School Foundation. Previously he served six years as the Director of Development for the Southern Illinois University School of Law and Associate Director of Development for the SIU Foundation.
CIECA has completed and published its tenth XML Standards Release, 2008R2. The new BMS Release includes 94 messages/transactions for Vehicle Damage, Glass, Rental, Salvage, and Subrogation assignments, Estimates, Dispositions, Attachments (images), Parts and Materials, Repair Status, Authorizations, Locations, Invoices, Statements, and Remittances.
“Manually entered data means extra cost to everyone. Implementing these XML standards within the repair shop will make everyone more efficient and will save the industry money,” said Fred Iantorno, CIECA’s Execu-tive Director.
CIECA publishes two XML releases annually. CIECA has also published a Road Map of its XML messages, which is available at: www.cieca.com
Chaired by Jeanne Silver, the committee suggests the following list:
- All direct repair programs should be based on transparent standards and criteria that are objective, and these requirements should pass public scrutiny wherein they could be published in a newspaper to provide a positive marketing benefit to all concerned and not an embarrassment.
- Shop Selection--- Insurers should remove shop selection and decision-making power from single individuals, and place those decisions with a board of independent individuals that cannot have a close enough relationship with a shop to gain any inurnment or gratuity. Insurers could also rotate area staff so that no single person has long-term authority over any one shop.
- Publish Agreement Items--- Program guidelines or agreement items should be published and audited so that field staff cannot arbitrarily modify them nor create areas for misuse and/or regional policy interpretation.
- Performance Based Referrals--- If there are ongoing referrals from an insurer to a repairer and/or an increase in volume of referrals, it should be strictly based on performance. The shops that best serve consumers earn the most business.
- Comments About Shops--- While insurance companies may recommend any shop that meets their published criteria and standards as outlined, they may not make comment about any other business that is not on their list as a means to encourage a consumer to select their referral choice, or to dissuade them from using a repairer of their own choice.
- Exchange of Information--- Insurers should rightfully acknowledge that all shop-produced data is the property of the shop and that no data can be gathered without the specific authorization of the shop. Insurers should disclose every data item to be collected along with the intended use of that data. Further, sharing this data should be strictly voluntary and not a requirement or criterion of participation in a referral program.
- Repair Standards--- Insurers and repairers should cooperate in the independent creation and universal acceptance of repair standards, and mutually agreeable repair practices that will serve as the foundation of all estimating and repairs.
- Non-compliant Repair Practices--- At no time will an insurance company recommend, encourage or pressure any repair business into following repair practices or using parts, paint or material that are not in compliance with repair standards in accordance with OEM specifications and or that may in any way lessen the value of the repaired vehicle. All requested repairs will be in accordance to the repair standards as established in paragraph #7.
- Required Vendors--- Insurers should be limited from requiring that a shop buy any product or service from a particular vendor as an agreement item or criterion to participate in their DRP, or receive a referral of any sort.
- Reform of State Laws--- Insurers and shop associates should work together to reform ALL state laws to ensure they prohibit payoffs and other "pay to play" programs, with enforcement and criminal penalties clearly defined. There should be immunity and protection from reprisal for whistle blowers.
- Transfer of Ownership--- The transfer of ownership of a body shop should not automatically disqualify that shop from continued DRP participation. Continued participation when a shop is sold should be contingent upon a review and approval of the new ownership transfer and based on an objective application process commensurate with the criteria used for any and all shop participation as outlined in item #1.
- Toll Free Number--- Every insurance company should have a published, easy to find phone number so that shops and/or other individuals can call to report abuses, anonymously if necessary.
- Agreement Items--- If there is any discounting between insurers and repairers, it should always be based upon fair trade practice and legal parameters such as volume. If a discount is given, it should be based upon an objective measurable and auditable business agreement.
- Independent Review Board--- All insurers should have an independent review board made up of consumer and industry professionals that can openly provide feedback. A majority of this board of advisers should be neutral, with nothing to gain or lose from the answers and feedback they give.
About three hours after the trade show floor opened at the 2008 International Autobody Congress & Exposition (NACE) in Las Vegas in early November, one vendor perhaps best summed up a common feeling at the event.
“There’s a tenseness out there unlike at past shows,” the vendor said.
It was a comment echoed by others at the event – exhibitors, attendees, and event organizers – who, while clearly enjoying the parties, entertainment, camaraderie, and classes that the annual trade show and Vegas offer, were still somewhat on edge. Changes made to this year’s event, the effects of the national economy, and the likely impact of continued efforts by insurers to control costs and the flow of work seemed to dominate much of the discussion.
The Automotive Service Association (ASA), which sponsors NACE, this year also merged in its Congress of Automotive Repair (CARS) mechanical event, which previously has been held the same week but at a different Vegas hotel. Bringing the two together into one facility and trade show was a success, according to event organizers. Attendance figures (and the overall size of the trade show itself) dropped ten to fifteen percent from last year’s NACE, organizers say (attributing much of the decline to shop owners bringing fewer employees to the event than in past years), but many at the event said they had expected ever bigger declines.
“Given the economy, I was worried things would be worse,” one vendor said, when told attendance was being pegged at about 23,000.
The event’s opening general session offered a good introduction to some of the thinking behind – and the possibilities created by – merging the two ASA events. And thanks to the morning’s scheduled speaker, former NFL quarterback Archie Manning (father of current NFL stats Peyton and Eli Manning), the session attracted more than 1,000 attendees, the largest NACE opening crowd in several years.
Prior to Manning’s speech, the shop owners serving as chairmen of NACE and CARS sat on stage and discussed what they see as some of the biggest issues facing the two industries.
Minnesota shop owner and NACE chairman Darrell Amberson said that the slump in auto sales may benefit the mechanical side of the industry as motorists hang on to cars longer, but unless it also drives up used cars values substantially, it will likely mean more total losses for body shops.
He said the federal bail-out of financial firms has spiked interest in more federal (rather than state) regulatory control of insurers, something ASA supports.
He said the collision industry should also be paying close attention to increased efforts by automakers to gain design patents on crash parts, which could limit competition from non-OEM parts manufacturers. He said that while design protection is a “fundamental right” for any industry, it could also drive up parts costs, also leading to more total loss vehicles.
CARS chairman Aaron Clements, a mechanical shop owner from Georgia, said the labor time guides in that industry are just that: guides from which shops deviate as needed. But Amberson said collision shops generally do not have that luxury. He called on the estimating system providers to bring more automation, sophistication, and automaker information to the systems to help them evolve from being “just a guide to a tool that could be used to blueprint jobs.” The systems, he said, currently are too incomplete and subject to interpretation.
“Can you imagine a world where we didn’t have to spend so much effort negotiating, debating and looking for non-included operations? I think whether an insurer or repairer, we could probably increase our life expectancy if we didn’t have to deal with this,” Amberson said, drawing laughter and applause from the crowd.
Overall, Amberson, despite the struggling economy and the specific challenges the collision repair industry faces, was optimistic about the opportunities for those shop owners who embrace new technology and processes, diversify their business, and think of themselves as business people, not repairers.
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©2008 Collision Repair Industry INSIGHT
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