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Letter to the Editor
This article originally appeared in the May 2009 Issue of INSIGHT
©2009 Collision Repair Industry INSIGHT All Rights Reserved
I-CAR Introduces Overview of Cycle Time Improvements for the Collision Repair Process Course
Parts Certification Provision Eliminated from California Senate Parts Legislation
Right to Repair Act Back in the Spotlight
AASP-MN Names Scholarship Recipients
Insurer and Industry Professionals Elected to CAPA’s Technical Committee
True2Form Conducts Fix My Wreck Promotion
Mitchell Releases Latest Edition of Industry Trends Report
PPG Reaches Green Belt Training Milestone
INSIGHT Neighbor Mayfield Collision Centers Plans to Expand
Ohio Locks Down Three Repair Facilities
Charlie’s Paint and Body Switches to Environmentally-Friendly Waterborne Refinish System
INDUSTRY UPDATE
Repairers and insurers interested in how improving efficiency can help the bottom line now have a new training resource from I-CAR. I-CAR has launched its Overview of Cycle Time Improvements for the Collision Repair Process (CYC01) live training program.
The new course speaks to every employee who has a role in improving cycle time, from the estimator to the technician to the front desk personnel and shop manager, and allows for all to gain new knowledge geared toward resulting in improved efficiencies and better business practices.
“The industry has really responded strongly to this program and there is a great deal of excitement around it, “said Jeff Peevy, I-CAR Director of Field Operations, North Amer-ica. “In the week prior to the first classes, we’ve seen registrations double.”
Recognizing this interest, the new I-CAR Overview of Cycle Time Improvements for the Collision Repair Process course provides a thorough overview of cycle time improvements to shop and office managers, technicians and insurance company personnel.
The I-CAR Overview of Cycle Time Improvements for the Collision Repair Process course details:
- Definition of cycle time and ways to improve processes
- How improvements can impact business efficiency
- Opportunities to improve customer relations
- “Time bandits” that can affect your business
- Current processes that can create opportunities to reduce cycle time
- Standardized Operating Procedures (SOPs) for improved processes.
Registration for Overview of Cycle Time Improvements for the Collision Repair Process is currently open for classes that began on Monday, April 13. New classes are being added to I-CAR’s class schedule on a continuing basis. Information on classes scheduled in your area can be found on the I-CAR web site at www.i-car.com.
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According to a statement from ASA, California Senate Bill 350, “The Motor Vehicle Insurance: Automobile Repairs: Restraint Systems Act,” has been re-referred to the California Senate Banking, Finance and Insurance Com-mittee. State Sen. Leland Y. Yee (D), author of S.B. 350, amended and re-introduced the bill to the committee.
Eliminated from the original legislation are requirements for nonoriginal equipment manufacturer crash parts to be certified by an American National Standards Institute (ANSI)-recognized entity if the parts are presumed to be at least of like kind and quality as the part being replaced in terms of fit, function and finish.
Current law prohibits insurance companies from requiring the use of non-original equipment manufacturer aftermarket crash parts in the repair of an insured’s vehicle unless the insured is advised of this in a written estimate prior to repairs. S.B. 350 would, in addition, prohibit the use of aftermarket crash parts unless the parts were of equal quality to the parts being replaced.
Under the proposed legislation, insurers are required to warrant that nonoriginal manufacturer aftermarket crash parts are at least equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit and performance, and shall pay the cost of any modifications to those parts necessary to effect the repair.
The bill requires that the insurer advise the consumer in a written estimate of the use of nonoriginal equipment manufacturer aftermarket crash parts before repairs are made.
The ASA opposed the original language in S.B. 350. ASA’s collision leadership is reviewing the current version of the legislation and will submit comments to the committee.
The following is a statement by the Automotive Aftermarket Industry Association (AAIA) in support of the Motor Vehicle Owners’ Right to Repair Act:
The Motor Vehicle Owners’ Right to Repair Act is back in the spotlight as car companies seek to reduce overhead and car sales continue a rapid decline. With motorists keeping vehicles longer and dealership service bays closing at a swift pace, growing numbers of car owners are expected to turn to independent auto repair shops for service, according Kathleen Schmatz, president and CEO of the AAIA.
U.S. auto sales fell 41 percent to 688,000 vehicles in February, according to Auto-data Corp. and nearly 20 percent of car dealerships in America could close in 2009, according to a study by Grant Thornton LLP. In addition, the median age of passenger cars in operation increased to a record high of 9.4 years in 2008, according to R.L. Polk & Co. in its annual vehicle population report.
“The need for the Right to Repair Act has never been more critical than during these tumultuous economic times,” said Schmatz. “As car dealers close service bays and more car owners look to neighborhood repair shops to service their vehicles, it is important that these local shops have the same access to safety alerts and repair information as the new car dealer network.”
Because vehicles are becoming increasingly sophisticated with virtually every system either monitored or controlled by computers, servicing these vehicle systems to keep them in safe and efficient working condition requires ready access to complete and accurate repair information from the car companies. The Motor Vehicle Owners’ Right to Repair Act offers protections for vehicle owners by making it illegal for vehicle manufacturers to withhold information necessary to diagnose, service, or repair motor vehicles.
“Without the Right to Repair Act, millions of motorists would be forced back to fewer dealers for service, making convenient and affordable local auto repair a thing of the past. In fact, many motorists may forgo important vehicle repairs because there is no dealership in the area,” continued Schmatz. “Clearly, using advances in technology to deny motorists and their trusted repair shops the ability to service vehicles is a misuse of computers and certainly not in the best interest of consumers. Passage of the Right to Repair Act will ensure that car owners can conveniently and affordably have their vehicle serviced at the repair shop of their choice.”
The Right to Repair Act would require car companies to make the same service information and tools capabilities available to independent repair shops that they provide to their franchised dealer networks. The legislation further provides car companies with strong protections for their trade secrets unless that information is provided to the franchised new car dealers. Additionally, the bill clarifies the responsibilities of the Federal Trade Commission in enforcing the bill’s requirements.
The Alliance of Automotive Service Providers, Minnesota (AASP-MN) has selected the following students to receive a $500 scholarship award to support their continued studies in the automotive industry:
- Adam Bipes, Ridgewater College, Willmar – Automotive Service Technology program
- Wendy Cosner, Hibbing Community College, Hibbing – Automotive Service Technology program
- Cody Dehn, St. Cloud Technical College, St. Cloud – Auto Body Collision Repair program
- Corey Ferguson, Anoka Technical College, Anoka – Automotive Service Technology program
- Andrew Handevidt, Ridge-water College, Willmar – Auto Body Collision Repair program
- Joseph Hermodson-Olsen, Ridgewater College, Willmar – Automotive Service Technology program
- Joshua Hogen, South Central College, Mankato – Automotive Service Technology program
- Joshua Ihle, Century College, White Bear Lake – Automotive Service Technology program
- Pamela Kallio, Hibbing Community College, Hibbing – Automotive Service Technology program
- Korey Kirkeide, Dunwoody College of Technology, Minnea-polis – Automotive Service Technology program
- Tyler Letellier, Dunwoody College of Technology, Minnea-polis – Automotive Service Technology program
- John Mills, Century College, White Bear Lake – Automotive Service Technology program
- Darrin Reiter, St. Cloud Technical College, St. Cloud – Auto Body Collision Repair program
- Patrick Rients, Ridgewater College, Willmar – Auto Body Collision Repair program
- Kodie Roelofs, St. Cloud Technical College, St. Cloud – Auto Body Collision Repair program
- Chad Swanson, Hennepin Technical College, Eden Prairie – Auto Body Collision Repair program
- Jacob Widgren, Century College, White Bear Lake – Automotive Service Technology program.
Forty-one students from fourteen schools applied for the scholarships. Scholarships were available to students entering the second year of an NATEF-certified automotive program. Applications were reviewed by a committee of industry representatives, with consideration given to scholastic achievement, education and career goals, financial need, and written recommendations.
The scholarship awards are the centerpiece of AASP-MN’s Automotive Education Fund, which was established to provide financial resources to support automotive students, enhance automotive programs, and raise awareness of career opportunities in the independent automotive service industry.
The Certified Automotive Parts Association (CAPA) has announced that Joe Lacy of GEICO and Keith Manich of KEIMAN Business Consult-ants have been elected to CAPA’s Technical Committee. CAPA’s Technical Committee monitors and updates the standards governing CAPA’s Quality standards.
“We are thrilled to have professionals like Lacy and Manich join the amazingly talented group of industry experts that make up CAPA’s Technical Committee,” said Jack Gillis, Executive Director of CAPA.
Joe Lacy is currently the Director of Claims at GEICO’s home office in Washington, DC. He is responsible for the Auto Damage Performance Review audit staff of 20 and monitors the performance of all auto damage associates at GEICO. Lacy is also responsible for helping develop auto damage claims handling policy. He has been with GEICO for 37 years and has held positions from Auto Damage Adjustor to Director of Claims Efficiency. His affiliations include the “Write it Right Committee” and the I-CAR Education Foun-dation. He has been attending CAPA Technical Committee meetings as an industry observer for over four years.
Keith Manich has been in the Collision Repair Industry since 1978. He spent ten years as a line technician, shop manager, and director of operations before being hired by Allstate Insurance Company in 1988 to handle field claims in Virginia. He has been an I-CAR trainer, completing over 6,000 student units, and has supervised the redevelopment of the auto training group at Allstate’s Tech-Cor research facility. While at Tech-Cor, Manich represented Allstate on the Technical Committee for two years. He left Allstate in 2001 to work for Entela, (now Intertek) as a Business Development manager prior to establishing KEIMAN Business Consultants. He has been a guest speaker at NACE on several occasions.
“CAPA is fortunate to have such a broad range of industry expertise represented on our Technical Committee,” stated Gillis. “Their insight into issues facing the repair parts industry and guidance with the program are extremely important to CAPA’s continuing success.”
The CAPA Technical Com-mittee is comprised of a cross-section of industries involved in collision repair and includes manufacturers, distributors, insurers, collision repairers, and general interest groups. The group develops and maintains the CAPA Quality Standards, reviewing and refining them as necessary.
Technical Committee members include:
- Bill Brower, Liberty Mutual Insurance
- Alan Bush, USAA
- Toby Chess, Holmes Body Shop
- Mike Chiu, Pro Fortune
- Ed Eaton, Keystone-LKQ
- Rod Enlow, RENLOW Auto Technical Consulting, Inc. (Chairman)
- Scot Hansen, Collision Parts Network
- Charlie Hogarty, Superior Collision Parts
- Steve Huang, TYG Products
- Jackson Kwok, Genera/TYC Brother
- Joe Lacy, GEICO
- Keith Manich, KEIMAN Consulting
- Dave McCreight, Collision Resources Inc.
- Ron Nagy, Nagy’s Collision Center
- Edward Salamy, KSI Trading Corporation
- Nick Scheid, API/Cornerstone
- Mike Schoonover, Schoonover Bodyworks, Inc. (Vice-Chair)
- Jeanne Silver, CARSTAR
- Bob Smith, Storm Appraisal & Management Service, Inc.
True2Form, a multi-location collision repair organization, recently conducted a promotion at its Hickory, North Carolina facility, teaming up with the local Salvation Army to completely repair a badly damaged car for a local citizen in true need.
The promotion, aptly titled "Fix My Wreck Please," was the idea of True2Form Hickory Location Manager Loren Lowe, who saw a need to partner with the local charity and provide assistance to get someone back on the road who was in need of safe, reliable transportation.
"Here at True2Form we feel we are very supportive of every community in which we have a facility and this type of promotion is very consistent with the values of how we operate our business," said Lowe. "We approached the Salvation Army here to help find someone who needed assistance, and the idea caught on with several other Catawba County businesses that also helped supply parts, labor, rental vehicles, and food at our recent presentation."
A number of True2Form suppliers and partners assisted with product donations, including Sherwin-Williams Automo-tive Finishes Corporation, Advantage Glass, Carquest Auto Parts, Chick-fil-A, Dent Wizard International, Enterprise Rental Car, Hickory Wrecker Service, Jim's Detailing, Midas Auto Service, LKQ Auto Parts, and Signco. Lowe estimated more than $12,000 in products and services were donated, with True2Form providing $6,500 in labor to do the vehicle's repairs, including crews working several weekends and after hours to meet deadlines. Monies were also collected and donated to the Salvation Army at the car restoration unveiling event.
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Mitchell International, Inc., a provider of information, workflow and performance management solutions to the Property & Casualty claims and Collision Repair industries, has released the second 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, "A Deeper Dive into the Latest Crash Parts Index Analysis Yields Unexpected Results," by Mitchell's Vice President of Industry Relations Greg Horn, discusses the latest findings of Mitchell's Crash Parts Index Analysis. This in-depth, ongoing analysis conducted by Mitchell organizes crash parts data into a general "collision parts market basket" and tracks changes in the average prices over time.
The Mitchell Crash Parts Index Analysis methodology examines data from 2003-2008, creating a weighted average price for parts in the aggregate in order to compare inflationary trends by part type over time. In order to provide the industry with the most relevant and up-to-date data and analysis, Mitchell will continue to track crash parts data, releasing a final Crash Parts Index in a subsequent ITR issue.
Examining collision repair data in this way, by isolating the parts price index according to top selling vehicles by part type, is intended to help Mitchell customers understand where pricing trends are going and how part type pricing is interrelated for vehicles that are commonly insured and repaired. Mitchell's analysis reveals that decreasing new OEM prices and recycled/used prices are actually driving the overall decrease in the parts price in the case of the most popular vehicles. In contrast, the overall collision parts price index is increasing as a whole.
"The first installment of the Mitchell Crash Parts Index Analysis was enthusiastically received by the collision repair industry, and we received many requests to examine the data in more depth and detail," said Horn. "This time, we analyzed some of the most popular cars (the most often insured and repaired) and their collision parts. The data showed, surprisingly, that in contrast to earlier findings, today's composite crash parts price market basket is lower than it was in 2003."
Other valuable points of interest in the current issue of Mitchell's ITR include:
- In Q1-2009, the average initial gross appraisal value for Comprehensive coverage estimates processed through Mitchell servers was $2,302, compared to $2,242 in Q1-2008. Applying the prescribed development factor of three percent for this data set produces an adjusted value of $2,359 -- a $117 increase from this same period last year.
- On the average, Actual Cash Value (ACV) of vehicles appraised for Collision losses during Q1-2009 was $12,253 - $1,171 less than in Q1-2008, reflecting the lowered value of today's older vehicle mix.
The latest Industry Trends Report may be downloaded at www.mitchell.com. First published in April 2001, Mitchell's Trends Report now reachesmore than 23,000 collision and casualty industry professionals.
PPG has crossed the 600 mark for the number of collision center owners, managers, and technicians that have graduated from its MVP Green Belt Training program, a four-day comprehensive training program that is a blend of Lean Six Sigma fundamentals and practical application implementation.
“While it is an accomplishment to attain this number of graduates through a class as comprehensive as Green Belt,” said Jim Berkey, director, Business Solutions for PPG, “the end game is implementation and performance improvement. It is especially rewarding to see these shops make real improvements and take leadership roles within their markets.”
Berkey continued, “Today’s performance challenge in the collision industry requires that collision center operators simultaneously improve quality, cost, and speed. We have seen the interest in applying Lean Six Sigma / TOC principles and tools to collision grow exponentially over the last few years and are fortunate to have been in front of the curve in our ability to not only train our shops, but to work with them through implementation challenges.”
According to Rich Altieri, senior manager, MVP Business Solutions group, the training program, started in 2006, evolved from four years of extensive research and development led by a team of Master Black Belt Lean Six Sigma experts and MVP collision center consultants.
Key program elements include:
- The success factors that allow some organizations to thrive in rapidly changing environments
- Use of simulation games to learn Lean Six Sigma fundamentals and what cycle time reduction means to the collision repair processes
- Practical application of Lean Six Sigma principles through X-Ray Repair Planning and fundamentals such as 5S and Workplace Organization
- Leadership and implementation modules that address the need for everyone in an organization to participate in building stronger processes and a process improvement culture
- Integration of shop tours and assignments into the training to reinforce the understanding and confidence critical to successful implementation.
“Our Green Belt training and workshop programs have been very well-received,” noted David Knapp, senior manager, Business Solutions. “The program provides constant education and execution support in all the critical areas of collision center operations. Many of our graduates are well along on their Lean Sigma Six journey, solidly on the path of continuous improvement.”
“Green Belt Training changed our bottom-line,” declared program graduate Joe Little, co-owner of Body Beautiful Collision Repair in Aurora, Colorado. “We saw an eleven percent gain in our net profit in the first nine months. There's also drastic improvement in cycle times from going lean and implementing the things we've learned.”
“Green Belt Training gave me resources and tools that I could implement immediately. And it's not just tools, it's the map and the directions to get there. Without that we wouldn't be where we are today,” added Body Beautiful co-owner Janine Little.
Car West Auto Body, Danville, California CEO/president Craig Moe commented, “Our same store sales from 2007-2008 are up over twelve percent, with net profits up 25 percent. All our managers have gone through the program. Now we're bringing the second tier production managers, assistant managers, and some estimators into it. We've had huge paybacks doing so.”
In 2008, the MVP Business Solutions group delivered the Green Belt Training program ten times in locations around the U.S. The program will also be offered in Dallas, Texas; Sacramento, California; and Nashville, Tennessee in 2009.
Mayfield Collision Centers, located in South Euclid, Ohio, just down the road from INSIGHT headquarters, plans to open another location in Bedford Heights, Ohio, eventually creating more than 25 new jobs and more than $1 million in economic impact to this Cleveland-area suburb. The expansion was announced by Mayfield President Tom Griffin, who founded the company more than seventeen years ago at its current location.
“Despite these tough economic times, Mayfield Collision Centers has been successful and we are continuing to grow,” said Griffin. “As we looked for locations to expand, we saw a number of positives with the Bedford Heights area including access to transportation, particularly the great location and easy access to Interstate 271 and Rockside Road, close proximity to a number of local new and used car dealerships, and most of all, a real sense of partnership with city officials.
“From the first day of my contact with Bedford Heights leaders, they have been great advocates of our growth and couldn’t have been more accommodating,” continued Griffin. “They have been engaged, proactive and extremely helpful. Overall, they’ve been very accommodating.”
Griffin intends to continue accommodating customers and exceeding their expectations. His facility consistently has high customer approvals ratings and industry leading cycle times.
“We feel it’s imperative to take every customer through every phase of the repair process so they understand what we’re doing and what to expect during every phase of the process,” concluded Griffin, who is former president of the national Coyote Collision Repair group that advocates the pursuit of excellence, customer service, and leadership and management training.
The Ohio Board of Motor Vehicle Collision Repair Registration, in conjunction with the Ohio Attorney General Richard Cordray’s Office, the Hamilton County Common Pleas Court and the Hamilton County Sheriff’s Department, recently carried out a court to lock down three illegal auto repair facilities.
Injunctions were granted against Jesse Paige, owner of Jesse’s Auto Body; Mike Weigel, owner of Mike’s Auto Body & Repair; and Will Scruggs, owner of Will’s Auto Repair & Body Shop; all of Cincinnati, for failing to register with the Board. When the owners failed to meet the registration requirements after the injunction, the Board filed a “Contempt of Court” complaint. The Court issued a deadline for the owners to become compliant with the Board and pay back fees. When the deadline passed without compliance, the Board was granted a “Lock-down” order. The businesses will remain locked down until they are registered.
Michael Greene, Executive Director of the agency, noted, “Enforcement efforts against illegal repair facilities increased in 2007 and 2008, and the trend will continue. It is not the Board’s intention to close down repair shops, but rather bring them into compliance with state and federal regulations.... Consumers can check for registered shops at our e-licensing verification link, and learn the rights of a motorist when seeking auto repairs.”
The Ohio Board of Motor Vehicle Collision Repair Registration was created in 1999 to regulate the collision repair industry and provide consumer protection. The Board is entirely funded by registration fees from collision shops, auto glass businesses, paintless dent repair companies and airbag replacement units throughout Ohio. The Board is made up of five collision repair shop owners, one mechanical repair shop owner, and one person to represent the public, who has no financial interest in the auto repair industry.
Charlie’s Paint and Body, located in Searcy, Arkansas, has transitioned its shop to waterborne basecoat from solvent-based systems in anticipation of new air quality regulations. The body shop is now using the AWX(TM) Waterborne Basecoat System from Sherwin-Williams Automotive Finishes Corporation (SWAFC), according to Ed Covington, Charlie’s General Manager.
SWAFC recently introduced AWX, an innovative waterborne basecoat system that utilizes a proprietary resin technology. AWX was designed to be an easy-to-use, high-quality color coating that provides excellent color match and offers up to a 96 percent decrease in VOC emissions compared to other solvent borne coatings.
“We are very pleased to switch to this new coating system and will continue to give our customers superior results for their collision repairs as well as help to improve our air quality,” Covington said. “We didn’t switch because we had to, but we feel this is better for the environment, so it’s a win-win situation. By transitioning to the new AWX system we’ve made a commitment to our customers and our community. With our conversion to waterborne coatings we’ve seen a faster product and even better color matching, which means continuing to provide our customers the highest quality repairs, but now in a more environmentally-friendly setting.”
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