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Letter to the Editor
This article originally appeared in the October 2010 Issue of INSIGHT
©2010 Collision Repair Industry INSIGHT All Rights Reserved
Mitchell International and I-CAR Education Foundation Partner in Software Distribution to Schools
Snap-on Wins Three Innovation Awards
AutoNation October Sales Rise 15 Percent from 2009
Travelers Buys $370 Million Stake in Brazilian Insurer
Solera Holdings Q1 Net Earnings Up 46 Percent
Progressive Launches Snapshot Program to Offer Discounts on Auto Insurance
DuPont Performance Coatings Launches Lean Learning Academy
PPG MVP Business Solutions Group Introduces Problem Solving Workshop
Mitchell Releases Latest Edition of Industry Trends Report
NACE 2010 Organizers Pleased with This Year’s Event, Hint at Changes to Come
Sterling Autobody Centers Donates $200,000 Worth of Paint and Materials to Schools
INDUSTRY UPDATE
Mitchell International and the I-CAR Education Founda-tion have formed a new partnership aimed at helping the next generation of collision repair professionals. Mitchell is making an unlimited donation of its RepairCenter(TM) Estimating and TechAdvisor OEM repair procedure software in support of the Education Foundation's new Collision Repair School Solutions survey program. All secondary and post-secondary technical schools and colleges that offer a collision repair program are invited to complete the survey, and in return they will receive Mitchell RepairCenter software for use in their classrooms.
Mitchell is donating its RepairCenter(TM) Workspace solution with integrated Estimating and TechAdvisor software as an incentive for schools to complete the Collision Repair School Solutions survey. These products will serve as an excellent teaching tool for instructors and give students hands-on experience with the same industry-leading systems that collision repair businesses use today. There is no limit to the donation, but the Collision Repair Education Foundation and Mitchell International estimate the average annual value to be over $25,000 per school. With hundreds of schools expected to participate in the Education Foundation's survey program, Mitchell's overall annual donation promises to be very significant.
The Education Foundation will use the survey results to track key academic performance indicators such as enrollment, placement, personnel, facilities, and equipment. The survey will also be used to identify program needs for new training tools and equipment and to create metrics to measure the success of the collision education system going forward. Schools will be required to retake the survey on an annual basis in order to renew their subscription to the Mitchell software and any other software licenses.
"Mitchell's gift is both extremely generous and the catalyst to creating real change for the better within our collision repair schools," said Scott Kruger, Executive Director of the Education Foundation. "Both of our organizations are very excited to see how students will benefit from having this information in hand and the creative ways educators will use the systems in the classroom and on the shop floor."
Marc Brungger, Mitchell's Executive Vice President for Auto Physical Damage, said, "Mitchell's fundamental goal is to support the collision repair industry, and this partnership with the Education Foundation is a perfect fit. We are delighted and proud to support the Education Foundation by providing software and materials to enhance the education of the next generation of collision repair professionals."
In addition to the pledge of its software products for the survey program, Mitchell International has also contributed $10,000 to the Collision Repair Education Fund and pledged an ongoing donation of reconditioned laptop computers to be distributed to collision repair schools and students. The Education Foundation will distribute the computers to grant recipient schools and will include them as part of their Ultimate Collision Education Makeover program.
Several of the donated computers were included in the 2010 Makeover program and are already in use at the winning school, Steel Center Area Vocational Technical School in Jefferson Hills, Pennsylvania.
Jim Fichera, a collision repair instructor at the school, said, "The donation of Panasonic Toughbook computers with Mitchell RepairCenter Estimating installed will make it much easier for our collision repair students to look up parts and times. We would like to thank Mitchell International and everyone involved with the donation of the computers provided through the I-CAR Collision Repair Education Foundation."
The I-CAR Education Foundation, founded in 1991, is a not-for-profit organization dedicated to securing donations that support philanthropic and collision repair education activities that promote and enhance career opportunities in the industry.
Mitchell International provides information and workflow solutions to the Property & Casualty claims and Automotive Collision Repair industries.
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Snap-on Incorporated has won three Professional Tool & Equipment News (PTEN) Innovation Awards. Snap-on was voted “best” in the equipment category for the Quadriga automatic tire changer, the hand tools category for its 10-piece, 1/4-inch drive metric low profile ratchet/socket set, and the tool storage category for its KEW-Series LED light assembly system for tool storage units.
PTEN’s panel of active and independent technicians, shop owners, mechanics, and tool distributors scrutinized all of the nominees and voted Snap-on the best in the following categories:
Equipment: Quadriga automatic tire changer
The Quadriga ATC 1000 is the industry’s first truly automatic tire changer. No other tire changer automatically measures tire diameter, uses imaging technology to precisely profile the wheel, automatically positions the tire for hydraulically-driven dual bead-breaking, and uses precise motor controls to remove the tire from the wheel. Standard features include an integrated wheel lift to handle heavy lifting and a hydraulically-activated center clamp that safely clamps the wheel without the risk of damage associated with table-top machines. Smart Vision™ laser-guided bead-breaking and demounting tools completely eliminate tool-to-wheel contact for damage-free and worry-free tire and wheel handling. The Quadriga can accommodate rims up to 30” in diameter and 17” wide, with a maximum wheel diameter of more than 47”.
Hand Tools: 10-piece, 1/4-inch drive metric low profile ratchet/socket set (110RTSM)
Snap-on’s new low profile ratchet/socket set (110RTSM) is perfect for under-dash cramped quarters, under cowls on late model pickup trucks, transmission bolts on traverse mounted engines and torque converter belts. The ratchet and socket system is up to 43 percent shorter than a standard 1/4-inch ratchet with a 1/4-inch shallow socket. The low profile sockets, combined with the zero degree mini ratcheting wrench, work well in the tightest of areas. Its 72 gear teeth require minimal movement to engage the next tooth in those hard to reach places. The easy-action reverse lever will not get in the way, while the thin handle cross section allows for great accessibility. Sockets are 6 point and range in size from 5mm to 13mm.
Tool storage: KEW-Series LED light assembly system
Snap-on’s new KEW-Series super bright LED light bar is a high-end lighting system for Snap-on tool storage units. It is the brightest system available, throwing 2080 lumens of useful light output and doubling the DOE rating for under-cabinet lighting. Top quality 60mil by 60mil LED chips (2.25 times larger than commonly used commercial LED chips) are directly mounted in the aluminum housing using patented technology and are individually housed to optimize heat dissipation so these LEDs stay cool. Most commercial LEDs dim over time, but the Snap-on system uses much larger, longer lasting LEDs. Technicians appreciated the automatic on/off, and the magnetic installation.
“We are truly honored to have received three Innovation Awards this year and we’d like to thank all of the PTEN readers who chose Snap-on products,” said Tom Ward, President, Snap-on Repair Systems and Information Group. “These awards are especially meaningful for us because they are voted on by shop owners and technicians – the people who use our tools and equipment in their repair bays every day and rely on their ability to safely increase productivity and simplify tasks.”
Snap-on Incorporated is a global innovator, manufacturer, and marketer of tools, equipment, diagnostics, repair information, and systems solutions for professional users. Founded in 1920, Snap-on is a $2.4 billion, S&P 500 company headquartered in Kenosha, Wisconsin.
National vehicle dealer AutoNation Inc. has reported that its new vehicle sales increased 15 percent in October compared with the previous year, a bigger jump than the industry overall.
The Fort Lauderdale, Florida company said it sold 17,530 vehicles in October.
Overall industry sales rose 13.4 percent compared with last October, according to AutoData Corp.
U.S. auto sales put in their strongest performance of the year in October as buyers grew more confident in the economy and new models attracted them into dealerships.
Industry sales overall fell less than one percent from September to October.
AutoNation's new retail vehicle sales were down less than three percent in October versus September.
The company's domestic sales increased 20 percent in October from last year, import sales rose 16 percent and premium luxury sales were up five percent.
AutoNation, the largest U.S. dealership chain, operates more than 250 dealerships in 15 states.
The Travelers Companies Inc. will pay $370 million for a 43 percent stake in Brazilian insurer J. Malucelli Participacoes em Seguros e Resseguros S.A. The deal includes an option to increase Travelers' share of the company to 49.9 percent within 18 months.
Malucelli currently provides surety insurance, which provides bonding for contracts to ensure they are completed under set terms. But Alan Schnitzer, head of Travelers' financial, professional & international insurance business segment, said the deal "provides us with an exceptional platform for expanding the joint venture beyond the surety business into the growing property and casualty market."
Brazil, South America's largest economy, is an increasing target for U.S. companies to invest. The huge consumer market has led companies such as Coca-Cola, Procter & Gamble, Anheuser-Busch, and Pfizer to focus more closely on the nation in recent years.
The Travelers transaction is subject to regulatory approvals in Brazil, and is expected to close in the first half of 2011.
Solera Holdings Inc.'s fiscal first-quarter net income surged 46 percent, encouraging the maker of auto insurance software to raise its full-year outlook.
The Dallas-based company reported that it earned $29.1 million, or 41 cents per share, in the three months ending in September. That was up from income of $20 million, or 29 cents per share, at the same time last year.
If not for several items unrelated to its ongoing business, Solera said it would have earned 58 cents per share. On that basis, the results exceeded the average estimate of 53 cents per share among analysts polled by Thomson Reuters.
Revenue edged up five percent from last year to $159 million, nearly $3.5 million above analyst forecasts. If the stronger dollar had not lowered the amount of money flowing from its overseas operations, Solera said its first-quarter revenue would have increased by about ten percent.
Management has predicted that Solera’s adjusted earnings per share for the year ending in June 2011 will range from $2.27 to $2.33 on revenue of $666 million to $672 million. The company's previous guidance called for earnings of $2.15 to $2.22 on revenue of $640 million to $648 million.
Progressive Insurance has a new program to offer auto owners such as business travelers who park their cars at the airport several days a week, families with an extra car they only drive occasionally, and even drivers who avoid slamming on the brakes discounts on their automobile insurance. The insurer noted that such drivers are all less likely to be in accidents and therefore can now save money on their car insurance.
With Progressive’s SnapshotSM, customers can save up to 30 percent on their car insurance based on how, how much, and when they drive.
After drivers sign up for Snapshot, they are given a device the size of a garage door opener that plugs into the on-board diagnostic (OBD) port of their car. The device records and sends the driving data to Progressive.
After 30 days, customers will find out if they are eligible for a discount of up to 30 percent on their policies, based on their driving habits. People who drive less, in safer ways, and during safer times of day are more likely to get a discount.
At the end of the six-month policy term the insurer determines the renewal discount and the customer returns the device to Progressive.
Periodically, Progressive may check in with customers to get an updated picture of their driving by asking them to plug in the device again.
Snapshot is currently available to Arizona drivers who buy policies directly from Progressive.
Customers can log in to their policy on progressive.com during the six-month period the device is plugged in to see how their driving habits affect their rate, and, if they choose, make changes that could lead to greater savings. Customers will also see whether they are on track for a discount after 30 days.
Snapshot is voluntary and customers can opt out at any time. It will not make customers’ rates go up.
Richard Hutchinson, Progressive’s General Manager of usage-based insurance noted, “More than 100,000 customers countrywide get personalized car insurance rates by sharing a picture of how, how much, and when they drive. Now, Arizona customers are just 30 days away from saving up to 30 percent with Snapshot. The Snapshot Discount is transforming auto insurance because, for the first time, drivers can pay for car insurance based on how they drive.”
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DuPont Performance Coatings (DPC) has expanded the DuPont Performance Services (DPS) program, now offering the DPS Learning Academy – Lean Series. The DPS Learning Academy – Lean Series is designed for repair centers interested in implementing a lean process.
The DPS Learning Academy is a series of three, 3-day events, which are conducted on-site at a collision repair center that is actively using a pull production model. Currently, these events are being conducted at The Body Shop in Pittsburgh, Pennsylvania and at Marshall Auto Body in Milwaukee, Wisconsin. DPC has partnered with these organizations to develop a lean implementation strategy.
The Academy currently includes the following courses:
- 101 Administrative Process Flow
- 201 Production Process Flow
- Pull Production and Continuous Improvement.
“When designing the DPS Learning Academy – Lean Series, we were cognizant of the 97 percent lean implementation failure rate in the industry. Therefore we built our curriculum around the lean transformation (Kaikaku) model,” said Steve Trapp, Collision Services Development Manager. “Using the model, the DPC executive facilitator uses hands-on exercises in a workshop setting to have the lean champion apply the 12 lean principles to their repair center.”
Other exercises include study missions at repair centers currently applying kaizen thinking, lean tools and a pull production approach where participants can ask questions and take pictures. Back in the workshop, the participants can work together to refine their own tools and processes based on their customer’s needs, facilities and staff.
“A key to our approach is the weekly consulting sessions between the academy workshops to help keep the repair center on track with their unique implementation plan,” said Trapp.
The end goal of the DPS Learning Academy – Lean Series is to transform participating repair centers that complete the entire process to a pull-based kaizen thinking organization that can solve problems based on the scientific problem solving model.
PPG has launched a new workshop entitled Introduction to Problem Solving. The workshop was piloted at the MVP Business Solutions Conference in September and focuses on problem solving methods and strategic planning routines for collision repair shops.
The workshop introduces strategies for uniting the collision center team in a common direction to improve the business. Once a direction is identified, process improvement can begin from the current state of the business through a problem solving routine.
During the workshop, participants learn how to effectively frame a problem and understand the implications of unresolved problems. Lean Six Sigma tools are introduced and demonstrated using relevant collision repair examples, drilling down to the root cause of a problem and generating team driven solutions.
“Problem solving is the foundation of a continuous improvement culture. It is important that managers recognize problem solving as an integral part of their job function. They must learn to lead their team through a process of creating solutions that solve the business’s unique problems,” explained David Knapp, Senior Manager, Business Solutions at PPG. “The team needs a shared vision of the future to work together effectively.”
The new Introduction to Problem Solving workshop will be a two-day course offered beginning in 2011, as part of the MVP Business Develop-ment Series of training courses.
Mitchell International, Inc., a provider of information, workflow and performance management solutions to the Property & Casualty Claims and Collision Repair Industries, has released the fourth quarter 2010 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 Trend in Estimate Severity is Part Inflation and Part Parts," by Mitchell's Vice President of Industry Relations, Greg Horn, examined Mitchell's latest collision repair claims data. Horn analyzed the Mitchell Collision Parts Price Index (MCPPI), a metric similar to the Consumer Price Index (CPI) but created specifically for the collision repair industry, based on the industry's most comprehensive data for the top 20 most-replaced collision parts. Parts represent approximately 42 percent of the average repairable estimate dollars, and therefore have a significant influence on the overall cost of a collision repair estimate.
"Our MCPII data for the first half of 2010 indicates that OEM parts prices have risen while estimate totals have stayed flat, with overall parts spending decreasing as more alternative parts are used due to the substitution effect-an alternative where insurers and shops choose to repair a part rather than replace it," said Horn. "This year's data reconfirmed 2009's year-end surprise finding that when OEM part prices increase, estimate severity decreases. However, there was a significant difference that impacted all parts prices in 2010: inflation for the first half of the year was modest compared to the steady increase from 2005-2009. As well, in the 2010 timeframe, salvage parts have neither become less available nor more expensive. In fact, Mitchell data shows that the LKQ/used parts price index has actually decreased in the 2009-2010 time span."
Other points of interest in the current issue include:
- Q3-2010 data reflects an average gross initial collision appraisal value of $2,748-$69 less than this same period last year. Applying the indicated development factor 2.4% suggests a final Q3-2010 average gross Collision appraisal value of $2,814.
- In Q3-2010, the average initial appraisal value for Comprehensive coverage estimates processed through Mitchell servers was $2,505-compared to $2,521 in Q3-2009.
Ron Pyle, president of the Automotive Service Association (ASA), which sponsors the annual International Autobody Congress and Exposition (NACE), kicked off this year’s event in October by reminding about 1,000 attendees at the opening session that the event’s success enables ASA to provide key funding for a long list of industry organizations. Just since 2004, Pyle said, NACE has provided 83,534 hours of training to 47,764 students. And NACE also has donated $2.5 million in booth and meeting space at the event to industry non-profits.
ASA sponsors NACE and its “CARS” mechanical industry event all under the “Automotive Service and Repair Week” (ASRW) label. For the first time in six years, NACE was held separately from “Automotive Aftermarket Industry Week,” during which SEMA and other automotive aftermarket shows are held. The return of NACE as a stand-alone event was triggered by efforts to lure collision repairers and exhibitors to SEMA.
One session at NACE focused on the value of certification or standards within the industry. Among those on the panel was Leslie Upham of Thatcham, who discussed that organization’s role in the implementation of shop and repair standards in the United Kingdom. Upham said creating such standards should include input from all segments of the industry, but also should be done on a prescribed timeline.
“Take time to get consensus, but don’t take too long,” said Upham, adding that the process in the U.K. took about a year.
She said the standards set guidelines for “man, machine, methods and materials,” and three levels of certification are available to allow for different types of shops (those doing only cosmetic repair, for example). Certified shops are allowed to use the “Kitemark” logo, which is a independent quality mark recognized by 80 percent of U.K. consumers.
She said there are about 1,700 collision repair shops in the U.K. involved in insurer programs, and Thatcham’s initial goal is to get about 1,400 shops certified. It is about half-way to that goal, with about 700 certified shops, two-and-a-half years into the program.
The number of shops in the U.K. has fallen from about 18,000 20 years ago to about 4,500 today. The panel was asked if certification programs lead to shop closures. Jeff Patti, an insurance company executive who is leading one of the efforts to create standards in the United States, said he sees such standards more as a differentiator, to help consumers locate a shop with the appropriate equipment and training.
“It’s kind of a crap shoot right now for a consumer. When they take their car to a shop they have no idea of the qualifications of that repair facility,” Patti said. “And yes, unfortunately, some smaller shops may go out of business, but it is what it is. We have to be mindful of that, but we as an industry have to provide the consumer with a proper repair.”
As ASRW ended last month, ASA’s Pyle said he felt “like a rescued Chilean miner,” given what he saw as the success of the event. He acknowledged the show was smaller but said it was “appropriately” sized given the economy. The trade show included 270 companies (down from about 400 in 2008) in 75,000 square feet of exhibit space (down from about 90,000 square feet last year). Show organizers said they would announce final attendance figures in the coming weeks, but estimated it at 14,000 to 16,000 (down from 21,000 last year).
Pyle noted that all trade shows have seen declines, and that this year’s results show that ASRW “has legs” as a stand-alone event, meeting the needs of “a very distinct and separate part of the overall industry” that “deserves its own events.”
Although NACE organizers earlier this fall had announced October 2011 dates for next year’s event in Las Vegas, Pyle hinted strongly at the conclusion of this year’s show that the event may return to some sort of rotation among several U.S. cities, perhaps starting even this coming year.
“We’re going to take a real hard look at the show the next few weeks and make some decisions,” Pyle said. “We’re seriously considering all the options, and they’re all open to us. I want to be very clear: If it’s here next year, it will be successful. And I will guarantee you this: There will be a show.”
Sterling Autobody Centers has donated auto body paint and materials valued at over $200,000 to 36 high schools, colleges and vocational programs. Sterling recently completed its network-wide conversion to AkzoNobel waterborne paint, resulting in a surplus of solventborne material such as toners, clears, hardeners, and primers. The donation also included adhesives, abrasives, and other body materials. Trade and technical programs in 13 states benefitted from the donations, which were facilitated by the Collision Repair Education Foundation
Bob Benjamin, Sterling Vice President of Operations said, “Technicians are the lifeblood of our industry and we are proud to support the many programs around the country responsible for their training and development. Donating our surplus paint and materials is the right thing to do for the environment, but more importantly, it’s an investment in our future and the future of the collision repair industry.”
Scott Kruger, Executive Director of the Collision Repair Education Foundation added, “We have all witnessed the recent industry trends toward “green technology,” and Sterling’s donation is in keeping with these “green” efforts by recycling unused paint supplies. Rather than let this material go to waste, these supplies will be put to good use in teaching young men and women the skills needed to find a great career in the collision industry.”
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