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Letter to the Editor
This article originally appeared in the February 2009 Issue of INSIGHT
©2009 Collision Repair Industry INSIGHT All Rights Reserved
Mitchell Releases Latest Edition of Industry Trends Report
I-CAR Announces 2009 International Board of Directors
I-CAR Chairman Robbs Outlines Transition Plan for Canada at CCIF Meeting
Jack Thompson Honored with AIADA Lifetime Achievement Award
SCA Appraisal Company Appoints Warren Hart Western Regional Director
Allstate Becomes NABC Corporate Member
Federated Member S&W Supply Celebrates 75th Anniversary
NADA Chairman McEleney Says Next Two Months Are Critical to Auto Industry Future
AASP/NJ Gets Ready for NORTHEAST 2009
CIC Update: State Farm Explains Changes to Select Service Agreement
INDUSTRY UPDATE
Mitchell International, Inc. has released the first quarter 2009 edition of its Industry Trends Report (ITR), the company’s quarterly publication that highlights industry-related trends, news items, and statistics.
This edition's Quarterly Feature, "The Time Has Come for the Mitchell Information Center," by Mitchell's Vice President of Industry Rela-tions, Greg Horn, discusses the challenge faced by repairers in an environment where vehicle construction, equipment, and repairs grow more complex with each model year. In such an environment, insurance appraisers and collision repair technicians alike need to quickly and easily access the information that will give them the ability to accurately estimate and safely repair increasingly complex vehicles.
"The most accurate and up-to-date repair data is critical," said Horn. "Today, even the most basic repairs can require manufacturer specific instructions and parts. Yet obtaining detailed how-to instructions is complex, time consuming, and costly — as is ordering correct parts for the job at hand. Without an easy, effective way to address the repair information deficit there is a substantial liability risk for repairers when proper repair procedures are not followed, as well as potential loss in customer satisfaction."
Added Horn, "The growing number of hybrids on the road today is just one example of how the collision repair environment is constantly changing and at the same time creating corresponding pressure for repairers who need to keep pace with the demands of the increasing technology found on today’s vehicles. And hybrids are full of these challenges."
"Many leading hybrid automakers now use advanced safety technologies, and since this special equipment is present in more of today’s vehicles, it is increasingly appearing in collision repair shops, Horn concluded. "As part of our efforts to support the collision repair community with the latest in estimating and repair technologies, we developed Mitchell Information Center, which is the solution that helps bridge the data gap for repairers by giving them a single, easily accessed source for critical repair information."
The Mitchell Information Center can help shops and other participants in the collision repair process to reduce cycle time by avoiding the need to search multiple repair and parts sources. In addition, the Mitchell Information Center provides access to the most comprehensive and up-to-date year/make/model specific information to assist repairers in performing repairs in a safe manner and to the customer’s satisfaction.
Other topics covered in the current issue of Mitchell's ITR include:
- In Q4-2008, the average initial gross appraisal value for Comprehensive losses processed through Mitchell servers was $2,423, an increase of $56. Applying the prescribed 3% development factor yields an anticipated final comprehensive severity figure of $2,497.
- The initial average appraisal value, as calculated by combining data from all first- and third- party repairable vehicle appraisals uploaded through Mitchell systems in Q4-2008 was $2,556, $10 less than the previous year's Q4-2007 appraisal average of $2,566. Applying the prescribed development factor of 2.3 percent produces an anticipated average appraisal value of $2,615.
Complete content is available in the latest Industry Trends Report, which may be downloaded in PDF format at: www.mitchell.com.
First published in April 2001, Mitchell’s Trends Report has grown in both content and circulation, now reaching more than 23,000 collision and casualty industry professionals.
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Chemical maker DuPont Company reported a $629 million loss for the fourth quarter, due to lower sales and a large restructuring charge, and cut its earnings forecast for 2009.
Net sales in the quarter dropped 17 percent to $5.8 billion from $6.98 billion. The company reported a 20 percent decline in volume. Higher prices in all regions and across all business segments were more than offset by volume declines and negative currency effects.
The company said declines in consumer spending, construction, and motor vehicle sales led to a sharp drop in demand and a steep decline in global industrial production.
Full year 2008 earnings were $2 billion, or $2.20 per share, down from $2.9 billion, or $3.22 per share, in 2007.
I-CAR announced its 2009 International Board of Directors and Executive Committee following the I-CAR Annual Membership Meeting in Hoff-man Estates, Illinois.
The 2009 Executive Committee consists of:
- Chairman Tom Moreland, AkzoNobel
- Vice Chairman Mike Schoonover, Schoonover Bodyworks Inc. for Automotive Service Association
- Secretary Bill Stage, AkzoNobel
- Treasurer Elise Quadrozzi, Crawford & Company
- Immediate Past Chairman Robby Robbs, NuCon Services Inc.
- Member-At-Large Bruce Bares, Hi-Tech Collision & Glass Centers
- Member-At-Large Bob Keith, CARSTAR.
"I-CAR training is as crucial to the inter-industry's success today, as I-CAR celebrates thirty years of service to the industry, as it was in 1979 when I-CAR was founded," said Moreland. "Changing automobile technology and business process improvements of today will have as profound an impact on the inter-industry in 2009 as the introduction of the unibody vehicle in the late 1970s."
Moreland continued, "The I-CAR International Board of Directors appreciates the continuing inter-industry support, and the legion of I-CAR volunteers, and the work of staff to ensure that I-CAR provides relevant and timely training to the industry.”
The remaining directors include: Farzam Afshar, Verifacts Automotive; Terry W. Angell, Warren Tech; Rollie Benjamin, ABRA Auto Body & Glass; William Brower, Liberty Mutual Insurance Company; Bruce Cooley, DuPont Perfor-mance Coatings, Inc.; William DeGrocco, GEICO Insurance; James F. Doherty, General Motors Corporation; Chris Evans, State Farm Insurance - Education Foundation Representative; David Henderson, See Progress, Inc.; John Norton, Ford Motor Company; Sam Pezzullo, State Farm Insurance – Canadian Representative; Greg Potter, for Equipment & Tool Institute; Monica Rivers, BMW of North America, LLC; James Spears, USAA; Dustin Womble, Roger Beasley Collision Centers for Society of Collision Repair Specialists.
The board of directors is comprised of representatives from each of the following six industry segments: collision repair; insurance; equipment, tools, and supplies; education, training, and research; vehicle manufacturers; and related industry services.
I-CAR announced at the Canadian Collision Industry Forum (CCIF) meeting in Toronto in late January that it will be seeking a Canadian firm to which it can transition its Canadian operations for collision repair training.
Robby Robbs, Chairman of the I-CAR International Board of Directors, explained that the move is “in response to the International Board of Directors’ mandate that the Canadian market establish the manner in which I-CAR would be best structured to serve the industry.”
Robbs added, “Early indications of market interest are encouraging. However, I would strongly suggest that now is the time for industry leaders at a national, regional, and local level across all industry segments to step up.” He cautioned that without I-CAR “the industry is at risk of each repair serving as the training ground for new technology.”
Operations in Canada are continuing as usual while the training organization seeks a potential licensee. “We are continuing to do what we do - scheduling I-CAR classes, conducting I-CAR training, and working to support the training needs of the inter-industry,” said John Edelen, President and CEO. “We intend to continue to do so as we transition to a Canadian industry-supported alternative.”
I-CAR is moving aggressively through the process and expects to complete the transition by the end of 2009. Robbs explained the tight timeline and noted that interested parties will need to submit an Expression of Interest (EOI) by March 1 to be invited to move further in the process and to submit a detailed proposal outlining a business plan that will successfully incorporate the I-CAR vision in future operations in Canada. The I-CAR Canadian Task Force will evaluate proposals in mid-June and hopes to have a recommendation for a licensee in July.
Robbs said, “As a fellow Canadian, I am hoping the industry in our country recognizes the opportunity that is available to it and rises to the challenges that lie ahead.” He added, “What you have before you is a call for action and it is now up to the collision repair industry to decide what it wants and to engage.”
Canadian firms interested in participating in I-CAR’s Request for Proposal (RFP) process can access the Expression of Interest (EOI) document on the I-CAR website: www.i-car.ca.
The American International Automobile Dealers Association (AIADA) has honored longtime member and past director John H. (Jack) Thompson of Doylestown, PA with the David F. Mungenast, Sr. Lifetime Achievement Award. The award, named after the late AIADA Chairman and legendary St. Louis-area automobile dealer, was presented during AIADA's 39th Annual Meeting held in New Orleans in January.
"This year's award winner has claimed the respect of dealers and industry employees in all corners of the country," said AIADA President Cody Lusk."Jack is remarkable not just for his unwavering commitment to protecting the livelihoods of international auto dealers, but also for his strength as a leader and his reputation for generosity."
Thompson was one of the first Toyota dealers in the United States, opening for business in 1969. In 1989 he once again blazed a trail as one of the country's first Lexus dealers. He credits his success, and correspondingly high customer satisfaction and retention scores, to the philosophy that he is not in the car business, but the people business. In 1997 He won the Time Magazine Quality Dealer of the Year award and in 1998 the Sports Illustrated Dealer of Distinction.
Thompson's love of cars extends past the office. Over the years he has accumulated one of the largest vintage car collections in the country, focused primarily on vintage race cars and European models. He is a member of the Sport Car Club of America and has served as that organization's chief executive steward.
Active in his community, Thompson has also served as a board member of the land preservation group Heritage Conservancy, as the title sponsor of the Doylestown Arts Festival, and as a host of the annual Susan G. Komen Drive for the Cure.
Currently, Thompson owns and operates three dealerships in Doylestown, PA. He has been a member of AIADA since 1975.
In his acceptance speech, Thompson reminded the crowd, "We are in a downturn now, but this is when we as dealers make our best decisions for tomorrow."
SCA Appraisal Company has appointed Warren Hart as Western Regional Director of Client Services. With eighteen years of Property and Casualty industry experience, Hart has an in-depth insurance industry history.
Hart was the Founder and President of Property Salvage Recovery, Inc. (PSR), providing salvage disposal and resale services to the property claims insurance industry. In his role as President, Hart guided the strategic positioning and growth of the company while bringing awareness and focus of property salvage to the industry.
Prior to PSR, Warren spent seven years at Copart Auto Auction as Vice President of Marketing, where he led a team responsible for market penetration and business development strategy for auction services in the Western part of the United States, including Alaska and Hawaii. Hart also served as President of First Report Insurance Services, where he was responsible for the development and implementation of a 24-hour claims reporting service to small and mid-level insurance companies. His career began at Windshields America, Inc. with the development of a PC based EDI billing/invoicing system.
“We’re excited to have Warren Hart join the team here at SCA. Warren brings a proven track record of delivering innovative solutions addressing the core of the P&C claims process. Consistent through his career, Warren maintains a high level of commitment and credibility, which mirrors the fundamental values we share at SCA,” said Bill Chval, Sr. Vice President - Client Services Group.
Founded in 1979, SCA is an independent, privately owned, auto material damage appraisal firm that currently services 46 U.S. states and Puerto Rico.
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The National Auto Body Council (NABC) has announced its newest corporate member, Allstate Insurance Company, the nation’s largest publicly held personal lines insurer.
Allstate’s role in securing vehicles for last year’s Recycled Rides initiative, an NABC-sponsored community awareness project whereby members of the NABC repair and donate recycled vehicles to families in need throughout the United States, set the stage for Allstate’s latest show of support for NABC and the ideals for which it stands.
“Recycled Rides was an effort on our part to re-engage with the collision industry,” said Allstate’s Auto Director, Randy Hanson. “It soon became apparent that greater participation with NABC, in addition to contributing to the enhancement of the industry’s image, would provide Allstate a venue through which it could more effectively understand collision industry perspectives and the challenges facing body shops. We anticipate our corporate sponsorship of NABC will lead to many fruitful, solution-based conversations between the members of our two industries.”
The support of corporate members helps NABC, a not-for-profit organization, undertake such projects as a national public relations effort to educate consumers and repairers on issues such as finding a quality collision repair facility; the aforementioned Recycled Rides project; and a comprehensive effort to network with the consumer press to elevate the collision repairer’s profile in the eyes of the motoring public.
“I am pleased that Allstate has stepped forward on behalf of NABC, as the positive image of the collision industry and that of the insurance industry are inevitably linked in the perception of the public,” commented NABC Executive Director Chuck Sulkala. “The past year’s Recycled Rides program has made this point even clearer. We look forward to Allstate’s greater involvement and support of NABC projects and we believe other insurers will also see similar advantages and likewise come forward. The type of improvement we’re talking about benefits not only repairers and insurers; it is good and right and important for everyone in the greater collision industry.”
Federated member S&W Supply is commemorating its 75th anniversary in 2009. As a way to celebrate and thank its customers, the company held Customer Appreciation Days at all eight S&W Supply locations in Kansas Feb. 11-14. The company has been a Federated Auto Parts member since 1985.
“We are honored to be celebrating the 75th anniversary of S&W Supply,” said Don Bickle, chairman of the board of S&W Supply and Warehouse Inc. “For a company that started with one small auto parts store 75 years ago to have grown to where we are today is quite remarkable. Without our loyal customers and business partners, we would not have had the success we have had. I especially want to thank all of our employees, including our past employees, for helping us reach our 75th anniversary. With their help, we look forward to another 75 years.”
Established in 1934 by Claude Sutter and Don Wells, and named S&W in their honor, the company started out small, selling a limited number of automotive parts. As the business grew, Don and Lyle joined the company. As the business grew, S&W Supply moved to Hays, Kansas, where its company headquarters remains today.
Besides automotive and heavy duty, S&W also serves the industrial, agricultural, and oilfield markets. The second, third, and fourth generations of the Bickle family work in the business. Currently Don Bickle serves as chairman of the board; his sons Don Jr. and Tim manage the day-to-day operation, and grandson Ryan serves as the general sales manager.
“We want to congratulate the Bickle family on 75 years of great service and success,” said Rusty Bishop, CEO of Federated Auto Parts. “S&W Supply and Warehouse Inc. continue to grow and prosper because of the hard work and commitment of the Bickle family and their employees. Everyone at Federated congratulates them on their 75th anniversary. The Bickles have been great partners with Federated for over twenty years and we wish them many more years of success.”
Federated Auto Parts, headquartered in Staunton, Virginia, is one of the largest auto parts distribution and marketing organizations in North America.
With 2009 expected to be one of the toughest years yet for auto retailing, the incoming chairman of the National Automobile Dealers Association issued a call-to-action in late January, urging dealers to make their voices heard in the debate over how to return the industry to economic viability and how new emission standards should be implemented.
"The nation's new car dealers have already made strides in communicating the importance of the franchise network, the need for federal bridge loans and the necessity of stable credit markets, but the work must continue," said 2009 NADA Chairman and Iowa dealer John McEleney. "The next two months are critical to the future of our industry as we know it - the future of GM and Chrysler, availability of credit and the return of stability to our economy."
McEleney said some pundits characterized dealers as a drain on the books of automakers and suggested it was time to do away with the franchise system.
"We had to inform people about the model of our business, he said. "It's our money we invest in buildings and staff and training, not the manufacturers. It's our investments that are on the line to get their products distributed to buyers."
With much attention being paid to the industry, it is incumbent upon dealers to inform the public about auto retailing's impact on local, state, and national economies. Sales taxes collected at auto dealerships nationwide total in the billions of dollars each year. And auto sales make up nearly twenty percent of all retail spending in the U.S.
McEleney urged the new Obama administration to carefully study a single national fuel-economy standard, in place of a patchwork of state regulations that he predicted may only further endanger the industry.
Noting that the auto industry is cyclical, dealers can succeed if they focus on things they can control, McEleney said.
A lifelong resident of Clinton, Iowa, McEleney joined the family car business right after college. He owns two dealerships. His father, Warren McEleney, was NADA president in 1971.
The Alliance of Automotive Service Providers of New Jersey (AASP/NJ) has announced the Schedule of Events for its NORTHEAST(TM) 2009 trade show at the Meadowlands Exposition Center (MEC), taking place this March 20-22.
The agenda, highlighted by industry veterans Mike Anderson and Erica Eversman, includes the Society of Collision Repair Specialists (SCRS)/AASP/NJ East Coast Resolution Forum, the AASP National Board of Directors Spring meeting, the ACAR Code of Ethics Meeting, and three new I-CAR classes.
"AASP/NJ is excited to announce this year's Schedule of Events," Tom Elder, the association's president, said. "With all of the concern about what's going on in today's economy, we are proud to be able to give our industry something to look forward to, learn from, and depend on. "
Over 150 exhibitors and 350 booths are expected at NORTHEAST 2009. Information is available at: www.aaspnjnortheast.com.
In the same week in January the Collision Industry Conference (CIC) was held in Scottsdale, Arizona, State Farm distributed a new Select Service agreement to participating shops nationwide, and the company’s George Avery used several minutes at CIC to discuss the new agreement.
He described the changes as primarily “minor” or “editorial,” and that unlike the transition from State Farm’s “Service First” to “Select Service” program, the change in the agreement was not coinciding with a reduction in the number of shops participating in the program.
“Local management may have some market areas that they want to adjust, but that’s not associated with this update,” Avery said.
Wording in the agreement has been changed, he said, to give shops the option of conducting a more thorough tear-down of a vehicle before uploading an initial estimate, provided adequate photos are taken in advance. Shops doing this also may be asked to reattach some parts if the vehicle is a total loss, Avery said, getting prior approval for any charges related to this.
The revised agreement also requires participating shops to meet any local, state or federal licensing or certification requirements, and to maintain business practices that "are environmentally responsible based on federal, state and local regulatory requirements."
The indemnification section of the agreement had been "too one-sided," Avery said, and it has been changed to say that both the shop and State Farm will each "hold the other party fully harmless against any loss, damages, claims, or expenses" sustained as a result of negligent or intentional acts or omissions of the other. This “hold harmless” section of the agreement had previously been changed in California to the version now being rolled out nationwide, Avery said.
Several changes that Avery did not discuss at CIC revolve around parts and pricing. The term “prevailing competitive price” no longer appears in the document, a change Avery later said the insurer made because it felt that was term that might not be clear to some repairers. Instead, the agreement only references “pricing identified through State Farm’s survey process.”
As in the previous agreement, State Farm says it may enter into agreements with manufacturers, distributors and suppliers of automotive parts. The new agreement states that “any part pricing agreements negotiated by State Farm are in addition to the price offered” by the shop and that “State Farm shall receive the benefit of both” the shop’s offered pricing and “the price or discount negotiated through any part pricing agreements” with manufacturers or suppliers.
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