Autobody News August 2011 Southeast Edition

The Georgia Collision Industry Asso-ciation (GCIA) July meeting was heldon July 14th at the Crowne PlazaPerimeter Atlanta NW.

Patrick Delaney from SummitConsulting International was thenight's guest presenter. The presenta-tion centered on how to improve per-formance in your collision shop.

Delaney’s presentation coveredhow to measurably improve theprocesses that impact the most vitalareas of your business—profitabilityand customer loyalty.

Delaney spoke about ProductionManagement Foundations, Measur-ing in Order to Manage and Makingan Impact. He also discussed how toset up production controls to addressthe following four areas; customerinteraction, managing repairs, pro-

duction processes, and administrativeprocesses.

He explained the impact eacharea has on the production processand how these area can affect the re-pair planning process. Summit Con-sulting has a computer program tohelp shops with their production man-agement.

Refreshments and food began at6:30 pm.

The group also discussed the up-coming 15th Annual GCIA Golf tour-nament and the Property and CasualtyInsurance Stakeholder Advisory com-mittee meeting scheduled for Wednes-day, August 10th at 1:30PM in Atlanta(Location yet to be determined).

Please visit www.summitci.comfor more information about Summit

COLUMNS in this issue...Attanasio — Prestige Imports, a BASF Waterborne Advocate . .p. 12Williams — What Makes A Dealership Distinctive? . . . . . . . . . . .p. 16Schroeder — Carl Owen’s Paint and Body in Tyler, TX . . . . . . . .p. 17Chess — Are Your Repair Methods Ten Years Out of Date? . . . .p. 18Gonzo — How to Keep Your Cool With HVAC Diagnostics . . . . .p. 21Yoswick — State and Federal Governments Consider NewInsurance Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .p. 22

Horn — Devil in the Details: Measuring Metrics Properly . . . . . .p. 29

REGIONAL ARTICLES in this issue...Former San Diego Car Dealer Found Dead In FL Home . . . . . . . .p. 4Kia Hires 1,000 New Employees for Georgia Plant . . . . . . . . . . . .p. 4Sikes & Stowe Downtown Collision Celebrates 85th Anniversary .p. 6Hyundai-Kia Supplier Bringing Jobs to Alexander City, AL . . . . .p. 8Gunder’s Files Appeal With the United States Supreme Court . .p. 8Auto Angels Up to Speed for 2011 Car Giveaway . . . . . . . . . . . . .p. 10FL Gov Signs Deregulation Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . .p. 11Gunder’s Auto Center Alleges State Farm Altered PrevailingRate Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .p. 15

Shop Owners Share Frustrations RenegotiatingContracts with Information Providersby John Yoswick

The experiences of a number of shopowners around the country serve as areminder to make sure you always un-derstand the terms of any contract youare signing. Failure to read the fineprint—or negotiate clauses for addi-tional rights to end even something asseemingly innocuous as a softwarecontract—have cost some shops tensof thousands of dollars.

A shop owner in California, forexample, has been disappointed in theresponse he has received from one ofthe Big Three information providersto his requests over the past 18months to renegotiate his software

contract. The shop owner, who askedthat his name and the provider’s notbe used, said he purchased a completepackage—hardware and soft-ware—from the provider, but realizedshortly after he did so that he did notintend to the use the shop manage-ment module of the package.

“We’re not a large enough shopto benefit from the time I’d have intousing it,” the shop owner said.

While he wants to continue usingthe company’s estimating system, ashis shop has for more than 15 years,the information provider has refusedto accept any changes to the 40-plusmonths that remain on the shop man-

See GCIA, 1

Georgia Collision Industry AssociationHosts Consultant at Monthly Meeting

Allstate Announces ‘Process Changes’Designed to Improve Network Cycle TimeBack on July 11, Allstate InsuranceCompany announced to its DRP par-ticipants that shops will be required tohonor completion dates or assume allrelated costs, expedite estimate andupload completion times, and extendtheir hours of operation, when neces-sary, for the convenience of Allstatecustomers.

Now Allstate’s customer serviceinitiative for 2011 has been expanded.The new program requirements wereintroduced to shops in a series ofcycle time web conferences held re-cently. Those unable to view the webconferences are encouraged by the

company to contact their local per-formance managers.

Allstate is making “several keyprocess changes” within its Good

See Contract Frustration, Page 14

See Allstate Process, Page 30

NATIONAL ARTICLES in this issue...Chevy Cars Get Highest Brand Share in 20 Years, GM Says . . . .p. 13Companies Working to Expand Natural Gas Vehicle Options . . .p. 20Groupon Offers First New Car Deal With Detroit Auto Dealership .p. 31Hyundai and Kia Both Raise 2011 Sales Forecasts . . . . . . . . . . . . .p. 31

Tracy Tramm, Allstate Claim Service Manager,announcing process changes via video

SoutheastEdition

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REGIONAL

AL Governor Names Insurance Market

Study Commission . . . . . . . . . . . . . . . . 9

Alabama-Built Car Sales Up 20% From 2010. 4

Auto Angels Up to Speed for 2011 Car

Giveaway. . . . . . . . . . . . . . . . . . . . . . . 10

Collision Industry Legal Fund Reports

Repeat Large Contribution . . . . . . . . . . 10

FL Gov Signs Deregulation Bill . . . . . . . . . 11

FL Reinstates Online Driver Permit Tests

for Teens After Ban . . . . . . . . . . . . . . . . 8

Florida’s Insurance Market Earns “F” From

Research Group. . . . . . . . . . . . . . . . . . . 6

Former San Diego Car Dealer Found

Dead In FL Home, Police Arrest

Live-In Girlfriend . . . . . . . . . . . . . . . . . . 4

GA Cyclists Praise New Law Requiring

Drivers Yield Space . . . . . . . . . . . . . . . . 9

Georgia Collision Industry Association

Hosts Consultant at Monthly Meeting . . . 1

Gunder’s Auto Center Alleges State Farm

Altered Prevailing Rate Surveys . . . . . . 15

Gunder’s Files Appeal With the United

States Supreme Court . . . . . . . . . . . . . . 8

Hyundai-Kia Supplier Bringing Jobs to

Alexander City, AL . . . . . . . . . . . . . . . . . 8

Kia Hires 1,000 New Employees for GA Plant . 4

LKQ & Arbor Day Foundation Help Florida

Get Green . . . . . . . . . . . . . . . . . . . . . . . 8

New KIA Dealership Moves Into Old KIA

Property in FL . . . . . . . . . . . . . . . . . . . . 9

Nissan: Despite Japanese Disasters, US

Leaf Full Launch Will Be On Time . . . . . 13

Only 144 Texting While Driving Citations

Issued in Kentucky. . . . . . . . . . . . . . . . 10

OSHA Cites Cooper Tire in Mississippi . . . . 4

Sikes & Stowe Downtown Collision

Celebrates 85th Anniversary . . . . . . . . . 6

Three Arrested for Auto Insurance Fraud in

Tampa, FL . . . . . . . . . . . . . . . . . . . . . . 11

Walker Automotive Among Largest US

Dealerships . . . . . . . . . . . . . . . . . . . . . 11

COLUMNISTS

Attanasio, BASF - Prestige Imports is a BASF

Waterborne Advocate in Colorado . . . . 12

Chess - Are Your Repair Methods Ten

Years Out of Date? . . . . . . . . . . . . . . . . 18

Horn - Devil in the Details: Measuring

Metrics Properly . . . . . . . . . . . . . . . . . 29

I-CAR - Thin-Film Technology Comes to

Collision Repair . . . . . . . . . . . . . . . . . . 28

Schroeder - Carl Owen’s Paint and Body in

Tyler, TX, Offers Top Rated Auto, RV and

Truck Repair . . . . . . . . . . . . . . . . . . . . 17

Weaver - How to Keep Your Cool When

Working With HVAC Diagnostics . . . . . 21

Williams - What Makes A Dealership

Distinctive? . . . . . . . . . . . . . . . . . . . . . 16

Yoswick - State and Federal Governments

Consider New Insurance Regulations . . 22

NATIONAL

Allstate Announces ‘Process Changes’

Designed to Improve Network Cycle Time. 1

Allstate Shakes Up President’s Position,

Shares Drop on the News . . . . . . . . . . 30

And You Thought You Knew Ugly Dogs. . . 25

Automatic Braking, as Implemented by

Volvo, Does Prevent Crashes . . . . . . . . 24

Chevy Cars Get Highest Brand Share in

20 Years, GM Says . . . . . . . . . . . . . . . 13

Companies Working to Expand Natural

Gas Vehicle Options. . . . . . . . . . . . . . . 20

Comprehensive Review of Distracted

Driving Research Released. . . . . . . . . . 25

Fiat, Chrysler to Unite Management . . . . . 30

Groupon Offers First New Car Deal With

Detroit Auto Dealership . . . . . . . . . . . . 31

Hyundai and Kia Both Raise 2011 Sales

Forecasts. . . . . . . . . . . . . . . . . . . . . . . 31

J.D. Power Survey Ranks Ford 23rd out of

32 Auto Brands, of US Manufacturers

Only Cadillac Makes the Top Ten . . . . . 27

Nissan Researching Solar Charging for

Batteries in its All-Electric Leaf . . . . . . . 20

Shop Owners Share Frustrations

Renegotiating Contracts with

Information Providers. . . . . . . . . . . . . . . 1

Contents

Southeast

Publisher & Editor: Jeremy HayhurstGeneral Manager: Barbara DaviesAssistant Editor: Erica SchroederContributing Writers: Tom Franklin, Stefan Gesterkamp, John Yoswick, Lee Amaradio,Toby Chess, Mike Causey, Dan Espersen, Tom McGee, Jeff Webster, Rich Evans,Ed Attanasio, Chasidy SiskAdvertising Sales: Joe Momber, Sean Hartman (800) 699-8251Sales Assistant: Kristy MangumArt Director: Rodolfo Garcia

Serving Florida, Georgia, Alabama, Mississippi and adjacent metro areas, Autobody Newsis a monthly publication for the auto body industry. Permission to reproduce in any form thematerial published in Autobody News must be obtained in writing from the publisher.©2011 Adamantine Media LLC.

Autobody NewsBox 1516, Carlsbad, CA 92018; (800) 699-8251 (760) 721-0253 Faxwww.autobodynews.com Email: [email protected]

AkzoNobel. . . . . . . . . . . . . . . . . . . . . 5Arrigo Dodge-Jeep-Chrysler. . . . . . 10Autoland Scientech. . . . . . . . . . . . . 21Bill Penney Toyota. . . . . . . . . . . . . . 14BK Listings . . . . . . . . . . . . . . . . . . . . 9BMW Wholesale Parts Dealers . . . . 24Chief Automotive. . . . . . . . . . . . . . . 15Classifieds. . . . . . . . . . . . . . . . . . . . 31Delray Honda . . . . . . . . . . . . . . . . . 25Don Mealey Chevrolet . . . . . . . . . . 23Don Reid Ford. . . . . . . . . . . . . . . . . 19Equalizer Industries . . . . . . . . . . . . . 6Ford Wholesale Parts DealersFL, GA, AL, MS . . . . . . . . . . . . . . 32

Galloway Mazda . . . . . . . . . . . . . . . 14Garmat USA . . . . . . . . . . . . . . . . . . 11Global PDR Solutions . . . . . . . . . . . 13GM Wholesale Parts Dealers . . . . . 30Gus Machado Ford. . . . . . . . . . . . . 16Honda Wholesale Parts Dealers. . . 31Hyundai Wholesale Parts Dealers . 27Kia Motors Wholesale PartsDealers . . . . . . . . . . . . . . . . . . . . . 2

Mazda Wholesale Parts . . . . . . . . . 30Mercedes-Benz Wholesale PartsDealers . . . . . . . . . . . . . . . . . . . . 24

MOPAR Wholesale PartsDealers . . . . . . . . . . . . . . . . . . . . . 4

NACE / CARS Registration . . . . . . . . 7Nalley BMW. . . . . . . . . . . . . . . . . . . 19Nissan Wholesale Parts Dealers. . . 29Palmers Toyota . . . . . . . . . . . . . . . . 18Porsche Wholesale PartsDealers . . . . . . . . . . . . . . . . . . . . 16

Safety Regulation Strategies . . . . . 10SATA Spray Equipment . . . . . . . . . . 8Scorpion . . . . . . . . . . . . . . . . . . . . . 17Serra Mazda . . . . . . . . . . . . . . . . . . 22Southtowne Hyundai . . . . . . . . . . . 11Subaru of Gwinnett . . . . . . . . . . . . . 22Subaru Wholesale Parts Dealers . . 26Tameron Hyundai . . . . . . . . . . . . . . 23Toyota Wholesale Parts Dealers . . . 26Volkswagen Wholesale PartsDealers . . . . . . . . . . . . . . . . . . . . 18

Inde

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Through May, combined U.S. sales ofthe eight models produced in the stateof Alabama totaled 230,603, a 20 per-cent rise from the same period in2010, according to reports made bythe Birmingham News.

Only one vehicle, the HondaRidgeline, registered a decline. Thepickup’s year-to-date sales totaled4,598, down 31.6 percent.

Meanwhile, the two models builtby Hyundai in Montgomery lead thegrowth.

The Sonata sedan is the volumeleader, with year-to-date sales of96,370, up 35 percent.

The Elantra compact, redesignedlate last year, has shown the greatestgrowth, with year-to-date sales of20,006, a 104.5 percent improvementover 2010.

In brighter news for the Ridge-line, which is built at Honda’s Lincolnfactory, it topped the midsize pickupcategory in the J.D. Power and Asso-ciates U.S. Initial Quality Study re-leased last week.

The annual survey measuresnew-vehicle quality at 90 days ofownership.

The Honda brand finishedwith its best-ever overall ranking.The Japanese automaker placedNo. 2, behind Lexus and ahead ofAcura.

Mercedes, which has a plant inVance, finished fourth in the overallranking, while Hyundai placed No. 11.

As for other major brands, Toy-ota was No. 7, Chevrolet was No. 14,Chrysler was No. 16 and Ford wasNo. 23.

Three Alabama-built vehiclesfinished in the top three models persegment. Along with the Ridgeline,the Honda Odyssey placed second inthe minivan category, and the Mer-cedes-Benz GL-Class place second inthe large premium crossover/SUVcategory.

And in auto supplier news,Birmingham’s Mobile Fluid Recov-ery Inc., an absorbent materials recy-cler, received the General MotorsEnvironmental Excellence Award.

The GM supplier was recog-nized for providing unique recyclingideas and collaborating on projectssuch as turning oil-soaked boomsfrom the Gulf of Mexico into compo-nents for the Chevrolet Volt.

Fifteen years ago, Mobile FluidRecovery and GM collaborated on aneco-friendly method to process sol-vents from rags that were used to pre-pare the surface of vehicles foradhering emblems.

That work led to a recyclingprocess where the used rags wereturned into car parts.

Alabama-Built Car Sales Up 20% From 2010

Former San Diego Car Dealer Found Dead In FLHome, Police Arrest Live-In GirlfriendPolice in Fort Lauderdale, FL, are in-vestigating how a former San DiegoCounty car dealer died in his million-dollar mansion on June 30.

70-year old Ronald Vinci, the for-mer owner of Pacific Honda in KearnyMesa, has owned several dealerships inthe San Diego area since the 1960s.

He also owned several Hondadealerships in the 1960s, rose to mil-lionaire status and then later sold hisfranchises.

Fort Lauderdale police now be-lieve they found out who killed theformer San Diegan.

Police arrested Vinci’s live-ingirlfriend, Catherine Pileggi on July5, according to NBC San Diego.

Detectives said Vinci was tryingto break off his relationship with Pi-leggi at the time of his death. They be-lieve an argument between Pileggiand Vinci turned fatal.

Homicide detectives arrested Pi-leggi on July 5 after finding severalitems linking Pileggi to the scene. Pi-leggi is charged with first degree mur-der.

10News San Diego also reportedthat Vinci’s body was wrapped in ducttape when it was found discovered in-

side the home, which is in an upscaleneighborhood along Fort Lauderdale’sNew River.

Neighbors were stunned by thesudden, reportedly suspicious death.

“We moved here because it isreal quiet and slow paced and every-body walks their dogs and says hi toeach other. It is a real shock to hearsomething like this has happened,”said neighbor, John Anderson to10News.

Vinci formerly lived in RanchoSanta Fe, CA; reports showed he movedfrom San Diego to Florida in 2005.

Vinci leaves behind his son andgrandson.

Kia Hires 1,000 New Employees for Georgia PlantKia Motors America is ramping up itsU.S. production at the manufacturer’sWest Point, Georgia plant. The plantwill increase output from the current300,000 vehicles per year to 360,000beginning this September.

In a public statement made June2 President and CEO of Kia MotorsAmerica, Ahn Byung-mo, said, “Kiais experiencing unprecedented growthin the U.S., led by the best-sellingSorento. And with demand for thecritically acclaimed Optima currentlyoutpacing supply we are proud to addthe popular sedan as the second Kiavehicle on the production line.”

In anticipation of the increase,Kia has just hired 1,000 new U.S.worker. Byung-mo hopes this expan-sion will keep up with the high de-mand for Kia’s Optima sedan andSorento SUV, best-sellers for thebrand. Kia’s Georgia plant will beginproducing both models exclusively.

Excellent safety ratings and ravereviews from the auto press for sev-eral popular Kia models have shot KiaMotors’ U.S. sales through the rooffor a third straight month. Kia’s U.S.sales numbers were up a stunning53.4 percent in May.

Dealers are welcoming the newsof increased domestic production

since Kia’s popularity is on the rise.“While other car manufacturers

are still struggling with production is-sues in the wake of Japan’s cripplingnatural disasters, Kia will not only re-main unaffected, but will be able toget its most popular models out to thepublic even faster,” says local dealerJosh Aaronson of Yonkers Kia.

Keeping up with demand for theOptima and Sorento have been a chal-lenge for Aaronson. While he saysYonkers Kia’s inventory has been ableto keep up so far, the production in-crease will be a welcome relief.

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Cooper Tire & Rubber Co. will chal-lenge charges by the OccupationalSafety and Health Administration thatthe company committed safety viola-tions at its plant in Tupelo, MS. OSHArecommended the tire maker, alongwith two of its maintenance contractors,pay a $254,900 fine for 25 violations.The Tupelo plant was cited following aninspection at Cooper Tire’s Findlayplant, which was fined for violations.OSHA said the allegations are associ-ated with combustible dust.

OSHA Cites Cooper Tirein Mississippi

The Heartland Institute, a nationalnonprofit research and education or-ganization issued its annual “2011Property and Casualty Insurance Re-port Card” of all 50 states and PuertoRico, according to PropertyCasu-alty360.

The report garnered Florida withan “F”.

The report, which provides astate-by-state analysis of regulatoryburden, gives Florida a letter grade of“F” and a numerical score of -35.Heartland has long been critical ofFlorida’s insurance environment. Thisis the fourth year in a row that theSunshine State has been placed in thelowest-ranking position.

In its 2009 report, Heartlandnoted, “Consumers in Florida are pay-ing higher premiums for homeowners’insurance than necessary thanks to ill-advised regulation. ... Florida’s insur-ance environment, no holds barred, isthe worst in the country.” In thatyear’s p&c report card, Florida scoreda -36. It also scored a -36 and an “F”in 2010.

Along with Florida, other low-ranking states in the 2011 report in-clude Hawaii (-22), Texas (-25), andCalifornia (-28). Florida lost points forevery variable considered except mar-ket concentration for the homeowners’market and credit scoring.

Author Eli Lehrer says the orga-nization’s annual report seeks answersto two “fundamental questions” aboutthe nation’s p&c insurance regulatoryenvironment:1. How free are consumers to choosethe p&c insurance products theywant?2. How free are insurers to provide thep&c insurance products consumerssay they want?

Florida also scored the lowestpossible grade (-6) in the politicizationcategory. The report says that althoughboth states have appointed rather thanelected insurance commissioners, theinsurance industry became “a majorcampaign issue” in elections.

Curiously, the author also makesspecial note that Florida “saw insur-ance involved in its race for chief fi-nancial officer.”

It would be difficult for that notto occur. Florida’s CFO serves on thestate’s Financial Service Commission,which handles the regulation of bank-ing, securities and insurance. Addi-tionally, the office regulates insurance

agents, is court appointed as the re-ceiver or rehabilitator of insolvent in-surers, administers the workers'compensation insurance act, appointsthe Insurance Consumer Advocate,and is the administrator of the divisionof insurance fraud.

Florida’s Office of InsuranceRegulation comes under harsh criti-cism as well, with the report’s authoralleging, “Florida experienced a waveof insurer insolvencies resultingmostly from over-regulation of themarket. Many insolvencies that theFlorida Office of Insurance Regula-tion kept secret from consumers in theearly months of the year ended upsending consumers and regulatorsscampering to other companies andthe state’s residual market, the FloridaCitizens Property Insurance Corp.”

According to PropertyCasu-alty360, Insurance CommissionerKevin McCarty says his office “doesnot agree with the findings [of the re-port]. The claim is that Florida ‘expe-rienced a wave of insurer insolvenciesin 2010, resulting mostly from over-regulation of the market.’”

“In any marketplace, some busi-nesses fail,” McCarty says. “The in-surance marketplace is no different.Regulators do not run insurance com-panies. In an effort to keep a companysolvent while a potential buyer islooking at a troubled company andprevent the proverbial ‘run on thebank,’ the law provides that the OIRkeep the names of troubled companiesconfidential until such time that all op-tions have been exhausted to save acompany,” he explains. “Prematurelyalerting the public of every single con-cern with each company’s book ofbusiness would certainly cause evenmore strain and instability in the mar-ket.

“To accuse regulators of causinginsolvencies in the marketplace iswrong,” McCarty states. “In fact, theOIR proactively identified and ad-dressed issues affecting Florida’sproperty insurance market. These costdrivers include an explosion of sink-hole claims, reopened claims from the2005-2005 hurricane season, risingreinsurance costs and other factors. Asa result, regulators worked closelywith state lawmakers to craft mean-ingful reforms with the passage of SB408 during the 2011 legislative ses-sion, which the governor recentlysigned into law. The benefits of these

reforms will be seen over time,” Mc-Carty predicts.

Florida Insurance Council Ex-ecutive Vice President Sam Milleralso points to Florida’s progress to-ward reforms made during the 2011session.

“Florida took important steps thisspring to improve its troubled regula-tory climate,” Miller says. “Thesewere expanded rate deregulation forcommercial insurance and expandedhomeowners insurance recoupmentfor catastrophe reinsurance costs.

“In addition, the insurance com-munity worked with the Office of In-surance Regulation to pass SB 408attacking sinkholes and other propertyinsurance cost drivers,” Miller contin-ues. “This initial signal to private cap-ital that Florida wants it to play in ourmarket was good. We still have manyregulatory hurdles to overcome, in-cluding competition with the privateproperty market by Citizens PropertyInsurance Corp. and redefining therole of the Florida Hurricane Catas-trophe Fund. We still have much todo.”


Sikes & Stowe Downtown Collision,the oldest independent, family-owned body shop in downtown Jack-sonville, is currently celebrating its85th anniversary.

Founder John E. Sikes Sr.started the business in 1926, his sonJohn E. Sikes Jr. took over in the1960s until his death in 1999 andgrandson, John E. “Bud” Sikes IIIis the current owner.

The Owners have always cred-ited their loyal customer basethroughout the years for theirlongevity of success, and are, as al-ways, committed to the growth anddevelopment of downtown Jack-sonville.

For more information pleasevisit www.sikesandstowejax.com.

Sikes & Stowe DowntownCollision Celebrates 85thAnniversary

Florida’s Insurance Market Earns “F” From Research Group


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Florida teenagers once again will be al-lowed to take their learner’s permit testsonline, according to Insurance Journal.

The Department of HighwaySafety and Motor Vehicles pulled theonline testing option back in Januarywhen they determined that about 40percent of the test-takers who passedthe exam online failed in person.

A law signed by Gov. RickScott brought back the online testingoption, taking effect July 1.

The agency’s legislative affairsadministrator, Steven Fiedler, saidthe new testing system is improvedand holds parents more accountable.

If a teenager is found to havecheated, the parent’s driver’s licensecould be suspended.

Fiedler said the online testing isdriven mostly by customer conven-ience. About 70,000 teenagers applyfor the learner’s permit each year.

FL Reinstates Online DriverPermit Tests for Teens After Ban

In April of this year Gunder’s AutoCenter received notice whereas theUnited States Court of Appeals forthe Eleventh Circuit upheld a lowercourt’s order granting summary judg-ment in favor of State Farm Insurancein Gunder’s claim of slander and tor-tious interference with a business re-lationship against the nation’s largestpersonal auto insurer.

Ray Gunder stated; “after con-siderable thought, counsel and discus-sion with family and close friends, andas a result of recent activities on otherpending cases against State Farm I de-cided to proceed with submitting whatis referred to as a Petition for Writ ofCertiorari to the United StatesSupreme Court requesting their re-view and opinion of the lower court’sruling. As we continue to ‘pound thatrock’ I see we are standing on a sub-stantial amount of gravel, and as I’vesaid before, we’re all-in and we’re tooclose to quit now and will continueuntil we either prevail or exhaust allopportunities to do so!”

A copy of the court’s prior rulingmay be found at: http://www.courtlis-tener.com/ca11/26Fy/gunders-auto-center-v-state-farm/

Gunder’s Files Appeal With theUnited States Supreme Court

More than 150 jobs are coming toAlexander City, AL, thanks to a newmanufacturing facility that will sup-ply the Hyundai and Kia automotiveplants, according to CBS 8 NewsMontgomery.

The Lake Martin Area Eco-nomic Development Alliance alongwith Gov. Robert Bentley have an-nounced that C and J Tech Alabamawill be moving into a former RussellCorporation plant on the Russellcampus.

The plastic injection moldingcompany will hopefully create thejobs by 2013.

Materials produced at the plantwill be used at the Hyundai plant inMontgomery, which builds theSonata and Elantra car models and atthe Kia plant in West Point, Georgia,which manufactures the Kia Sorentoand Hyundai Santa Fe SUVs.

Hyundai-Kia Supplier BringingJobs to Alexander City, AL

LKQ Corp. announced the successfulcompletion of its recent partnershipwith the Arbor Day Foundation forthe 2011 Get Green promotion, ac-cording to aftermarketNews.

Every visitor who supplied avalid email address at the Get Greenwebsite during the month of May re-ceived a tree donated in his or herhonor. As part of the program, LKQdonated more than 10,000 trees,which will be planted in Florida’sBelmore State Forest.

“As one of North America’sleading automotive recyclers, beinggreen is important to us, and we standby our commitment to the environ-ment. The Get Green promotion is away for us to support our local com-munities and raise awareness of envi-ronmental concerns,” said LaurieGarcia, LKQ’s VP of growth initia-tives and marketing.

Trees donated during the 2010promotion were planted in north-ern Michigan’s Pere MarquetteForest as part of the Michigan De-partment of Natural Resource’s re-forestation project to support thefederally endangered KirtlandWarbler.

LKQ & Arbor Day FoundationHelp Florida Get Green

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Southside Kia opened two weeksago in the same spot on AtlanticBoulevard in Jacksonville where aprevious Kia dealership was shutdown under court orders, accordingto The Florida Times-Union.

The new dealership has no con-nection to Premier Kia, whichclosed in October 2009, said Joe Es-posito, general manager of South-side Kia.

“We just thought the locationwas strategic,” Esposito said. “Itwould make sense to be wherepeople identify it as a Kia dealer-ship.”

Esposito was also general man-ager of Kia of Orange Park and saidhe is still involved with that dealer-ship but that the two are owned bydifferent groups.

Esposito said he’s still addingemployees and expects to get toabout 70.

In the meantime, the dealer-ship is fully operational with salesand service. It has more than 300new cars, Esposito said, which isabout a 60-day supply. And saleshave been above the projections, hesaid.

New KIA Dealership MovesInto Old KIA Property in FL

Georgia cyclists are celebratingwhat they are calling the biggestimprovement to the state’s bikesafety laws in decades, accordingto reports made by Insurance Jour-nal.

A new traffic law requires carsand trucks to keep at least 3 feet ofdistance from bicycles when passingthem on the road.

The measure took effect July 1,and biking clubs across the stateplanned group rides over the Fourthof July weekend to raise awarenessof the new law among local mo-torists.

Frank McIntosh of the Savan-nah Bicycle Campaign said thechange was needed because Georgialaw previously only required passingdrivers to keep a “safe distance”from cyclists. He said that was toovague and some motorists would getdangerously close to cyclists on theroads.

Georgia Bikes, a nonprofitgroup, lobbied for the new rule.Its director, Brent Buice, said it’sthe most important change toGeorgia biking laws since the1970s.

GA Cyclists Praise New LawRequiring Drivers Yield Space

AL Governor Names Insurance Market Study CommissionAlabama Gov. Robert Bentley hasappointed 24 people to a panel thatwill examine the state’s insurancemarket and suggest improvements,according to Insurance Journal.

The commission will be led byBaldwin County Probate Judge TimRussell. Bentley has said he’ll hold aspecial session of the Legislature onthe issue of insurance.

The panel also includes state In-surance Commissioner Jim Ridling,state Revenue Commissioner JulieMagee, lawmakers, insurance agents,policyholders and representatives ofthree insurers.

The commission originally wasmeant to address the coastal Alabamainsurance market, but the governorexpanded its scope following the dev-astating April tornadoes.

Rising insurance rates and fewerchoices have been problems along thecoast since Hurricane Ivan in 2004, sothe commission hopes to meet aboutwhat to do in this situation.

“The lack of affordable insur-ance is an important issue that manyin Alabama face. After the devastatingtornadoes in April, insurance reformneeds to be examined now more thanever,” Bentley said in a statement. “Iwant this new commission to work to-

gether to stop the rising cost of insur-ance for the benefit of all Alabami-ans.”

Russell said the first step wouldbe to meet with Bentley and his staffto hear the governor’s plan for thecommission. He said he envisions aseries of meetings on insurance is-sues, ranging from education and lis-tening to consumers to findingsolutions.

“We’re not going to have a short-age of solutions,” Russell said.

He hopes to again propose theidea of a captive insurance companyto accumulate reserves tax-free andprovide less expensive reinsurance tocompanies covering Alabama cus-tomers.

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Collision Industry Legal Fund Reports Repeat Large ContributionIn June, a prior Collision IndustryLegal Fund contributor sent yet an-other check for another $2,500 aimedat assisting body shop owner RayGunder in his ongoing battle withState Farm Insurance Company.

The donation came with a simplenote:“Ray, Thank you for everything youdo! You’re the BEST!”

The Collision Industry Fund wasestablished last year to provide finan-cial assistance to Gunder’s Auto Cen-ter in Lakeland, Fla., which has beeninvolved in a lawsuit against StateFarm for slander and tortious interfer-ence, as well as the failure to pay forcertain repair procedures.

“This mirrors this same contrib-utor’s record donation they providedlast year! We remain extremely grate-ful and thankful for the donation andsupport” stated Ray Gunder. “I’mthankful for all the financial supportwe’ve received from people we don’teven know from across the country.I’m humbled at the support we’ve re-ceived and encouraged to continue onwith our efforts to level the playingfield.

“As I have said many times be-fore; This fight isn’t just about Gun-der’s and our customers, or just about

State Farm; it’s about repairers andtheir customers across the country thatface the same issues of abuse dailyfrom many insurers. State Farm hasand continues to stall and delay andoutspend us but so far, and by thegrace of God, we have reached a pointI believe will come to a positive out-come sooner than later.”

To mail a donation to the fund,make the check out to “The CollisionIndustry Legal Fund” and send to:Brent Geohagan, Attorney at Law,3001 Bartow Rd., Lakeland, FL 33803.

Auto Angels Up to Speed for 2011 Car GiveawayA mid-year update reveals the ‘AutoAngels’ of Central Florida are on tar-get for this year’s Christmas Give-away of reconditioned vehicles toneedy recipients.

David Stewart of Stewart’s AutoRepair in Winter Haven, FL, stated;“Thanks to the support of many spon-sors and the collision repairers in-volved in this program, thus far wehave 5 vehicles which will be ready atthe end of July.”

These include: 2001 Ford Escort4dr.,1999 Neon 4dr.,2002 ChryslerVoyager van, 2001 Grand Marquis,and a 1991 Nissan Pathfinder SUV.

The group’s goal, while lofty, isto have 14 to 15 vehicles ready forthis year’s Christmas give-away.

Currently the group is seekingdonor vehicles and is in discussionwith several insurers and others inhopes of getting suitable vehicles aswell as sponsors for cash and/or ma-terial donations.

The group would like to givecredit to those who have stepped for-ward thus far in making this programa resounding success:Bernie’s Body Shop (Lakeland)Ben’s Paint Supply (Lakeland)Winter Haven HondaDouglass Collision (Lakeland)

Gunder’s Auto Center (Lakeland)LKQ-Auto Parts (Brandon)All-Pro Used Auto Parts (Auburndale)Jenkins Lincoln Mercury (Lakeland)Meisner ‘s Paint & Body (Lakeland)NAPA- Auto Parts (Lakeland)1-800 Radiator (Central Florida)Stewart Auto Repair (Winterhaven)Maurice’s Auto Body (Lakeland)Watkins Motor Lines (Lakeland)

The group welcomes contactfrom those in and around Polk Countywho would like to offer their time, re-sources and/or donate their serv-ices/products to this very worthwhileprogram.

Please contact: David Stewart ofStewart’s Auto Repair in WinterHaven, Fl at [email protected] or call (863) 965-2030 formore information.

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Kentucky police agencies say thestate’s texting-while-driving statute iswell intended, but difficult to enforce.The law took effect a year ago, butofficers issued only verbal warningsfor the first six months. Citations andfines have been handed out since Jan.1, but there were only 144 of themstatewide in the first half of this year,according to The Kentucky Enquirer.The areas where the most citationshave been written are: JeffersonCounty leads with 23; Fayette fol-lows with 12.

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Three Arrested for Auto Insurance Fraud in Tampa, FLThree people have been arrested in aninsurance fraud case involving thetheft of thousands of dollars in autoinsurance premiums. Suspects BellaJenkins, Torrance Blake and DavidBall of Insurance Plus in Temple Ter-race, FL, surrendered to authoritiesand were charged with insurancefraud and selling insurance without alicense.

In August 2010, the Florida De-partment of Financial Services, Divi-sion of Insurance Fraud, began aninvestigation into the agency. The di-vision acted after receiving com-plaints that customers were givenautomobile insurance coverage quotesby phone only to have the price for thecoverage increase greatly at the timeof purchase.

Many customers paid the addi-tional money and left the agency be-lieving that they had insurancecoverage with either KingswayAmigo Insurance Co. in Miami or Se-curity National Insurance Co.

Customers later learned that theyhad no coverage, either by gettingpulled over for a traffic violation andbeing told that their license was sus-pended for not having insurance, orby getting notices from the FloridaDepartment of Highway Safety and

Motor Vehicles advising of the lack ofcoverage.

Further investigation determinedthat payments customers made werenever sent to Kingsway Amigo or Se-curity National.

The victims stated that Jenkins,the owner of the business and a li-censed insurance agent, was not pres-ent when they went to the agency, andthat Ball and Blake conducted insur-ance business with consumers withoutthe required licenses.

All suspects were booked intoHillsborough County jail and releasedon bond. If convicted, they each faceup to five years in prison per charge.

Florida Gov. Rick Scott signed intolaw a commercial rate deregulationbill this month that expands the typesof commercial insurance exempt fromthe rate filing and approval process,according to PropertyCasualty360.

The National Association of Mu-tual Insurance Companies (NAMIC)in a statement says the governor’ssigning of the “rate modernization”bill, HB 99, is an “important compo-nent of a healthy insurance market.”NAMIC adds Scott’s “support of free-market principles is evidenced” by thesigning of the legislation.

HB 99 expands on legislationsigned into law last year by then-Gov. Charlie Crist that exemptedcertain excess and specialty com-mercial lines from rate regulation.This year’s bill includes commercialproperty, excess property and generalliability. It also includes commercialauto lines for fleets under 20 vehi-cles. Larger fleets were included inthe bill last year. Rates still cannot beexcessive, inadequate or unfairly dis-criminatory.

Should the industry successfullydemonstrate that commercial deregu-lation works, it hopes the same canbe extended to personal lines, indus-try members have said.

FL Gov Signs Deregulation Bill

For the fifth straight year, Alexandria-based Walker Automotive has madeWard’s Dealer Business magazine’slist of the 500 largest automobiledealerships in the country.

WalkerwasNo.52on the list,whichranks dealerships based on total revenue.

Billy Navarre Chevrolet andHonda in Lake Charles also made thelist, at No. 235, the only other Louisianadealership on the list.

Walker Automotive AmongLargest US Dealerships

Consulting International. Visitwww.gacollisionindustry.word-press.com for updates on the GCIA.

Continued from Front Page

GCIA

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Patrick Delaney makes his presentation toGCIA members at their July meeting


SHOP & PRODUCTSHOP & PRODUCTSHOWCASESHOWCASE

When his customers are spendingbig money on vehicles costingmore than $50,000 and sometimeswell into six figures, Jim Frost, themanager at Prestige Imports Colli-sion Center in Lakewood, Col-orado, knows his paint jobs have tobe top-tier every single time. That’swhy he’s enthused on several lev-els about his conversion to water-borne paint. Frost is pleased aboutthe performance and the finishedproduct he’s getting with Glasurit90-Line, BASF’s waterborne prod-uct, and Prestige is proud to be aColorado waterborne pioneer—thevery first body shop in the Centen-nial State to adopt the green ap-proach nearly three years ago.

Frost, 41, started working forhis father’s shop at age 15. Nowhis collision center serves threeColorado dealerships: Prestige Im-ports Porsche Audi, Mercedes-Benz of Littleton and Mile HighHonda Acura Mitsubishi. PrestigeImports Collision Center will repairany type of vehicle, but primarily fo-cuses on the European brands itsdealership sells, as well as Fer-raris, Bentleys, Maseratis and Lo-tuses, among others. With 19employees, this 19,000 square-ft.facility has an average repair ticketof approximately $3,300 and at anygiven point it’s likely that the shopwill have more than a dozen repairorders in-house averaging morethan $20,000 each.

Frost conducted an in-depthstudy before he chose BASF as hispaint vendor, he told AutobodyNews. “We decided to change to wa-terborne and adopt all of the Califor-nia laws even before they went intoeffect there. We analyzed all of thewaterborne paint lines that were outthere starting a little more than threeyears ago. We discovered that BASFoffered an ideal solution for us in ourenvironment. Many of the cars we re-pair were originally painted withBASF waterborne from the factory.We liked the product and appreciatetheir support, so that was a big partof the decision.”

Becoming familiar with BASFGlasurit 90-Line involved watchingother shops using it, Frost explained.“I went out to Southern Californiawith my painting team to their train-ing facility there and BASF took usaround to local body shops that wereusing the BASF waterborne product.At that point, we went through sometraining and when we came backhere, we felt as though we were

ready to roll. FinishMaster, our localjobber, assembled all of the neces-sary materials and we came in oneSaturday and switched over towater.”

It was a challenge for his paintcrew during the first month or so, butPrestige didn’t have a single come-back and the learning curve flattenedout quickly. “Change is never easy,but we’re always looking to makeourselves better,” Frost said. “We de-cided to push the envelope andmake a definitive move. After 30days of saying this is the way we’repainting cars and we’re not lookingback, the painting staff accepted it.And now I can guarantee that theywould never go back.”

What was the biggest issue toconverting to BASF Glasurit 90-Line? “The main challenge for us isour climate here in Colorado,” Frostsaid. “The humidity swings and thetemperature changes here all thetime, so we had to start what I call“cocktailing our mixes” to make themcorrect. Once we were able to solvethat, it was seamless. We retrofittedthe booths and we installed morefans and that was essentially it. A lotof people were telling us that we hadto buy a lot of other equipment, butwe determined it wasn’t actually nec-essary.”

Frost also uses BASF’s paint in-ventory system and values it for itsease-of-use. “We have incorporatedtheir SmarTools inventory controland management system, and welike it. Every week, I get an accuratereport, so I know what to order andexactly what I have at any giventime. I also credit that to an increasein profitability, because we don’t run

out or ever buy too much of the prod-uct.”

Even without any pending legis-lation on the horizon in Colorado,body shops are flocking toward thewaterborne solution statewide, Frostsaid. “Since we switched over in2008, roughly 35 shops have con-verted and we always invite othershops here so they can see howwe’re doing it. We’ve even had othershops sending their painters here,pulling the triggers alongside ourcrew to learn the product and tellthem “hey, it’s not so hard. You don’tneed to be afraid of it.” We tell othershops to try the BASF Glasurit 90-Line and make your own call. Thereis no substitute for doing it yourself.Some of these shops are competingwith us, but we have no problem withsharing information this important. Inthe end, we should all be stewards ofthe land, and if I can help to get oneguy over his apprehension using thisproduct, then so this is definitely awin for everyone.”

Business life is a series of trade-offs, but switching to waterborne wasa win-win for Prestige, Frost says.“The product costs slightly more, butthe coverage is superior. The colormatches are more accurate and wehave experienced an increase in ouroverall material gross profits sincewe made the change. We’re very en-vironmentally-minded here in Col-orado and we participate in theEnvironmental Leadership Programsponsored by the state. They’ve rec-ognized us for our green practicesfrom a recycling perspective andthey awarded us with their silver cer-tificate for the changes that we’vemade here.”

Prestige is pleased to report that their colormatches are dead-on with BASF Glasurit 90-Line

Prestige Imports CollisionCenterLocation: Lakewood, CO

Telephone: 303-238-7391www.prestigeimports.comwww.????.com

Company At A Glance...

Type: Collision Repair

Facility Employees: 19

In Business Since: 1974

DRP Programs: Zero

Number of Locations: One

Combined Production Space:19,000 square feet

BASFCompany Contact: David BrezStrategic Initiatives ManagerPhone: 951-315-1395 (Mobile)email: [email protected]: www.basfrefinish.com

All of the equipment and systems at Prestige have to be top-notch, because they work on theworld’s most expensive cars

Prestige Imports is a BASF WaterborneAdvocate in Colorado

Prestige was the very first collision facility inColorado to make the green move to waterbornepaint, when they embraced BASF Glasurit 90-Line in 2008

by Ed Attanasio

Although Nissan North America Inc.’stimetable for preparing the Smyrna,Tenn., complex to build the NissanLeaf and its batteries was set back bymore than a month by the March 11earthquake and tsunami in Japan, theautomaker still hopes to start produc-tion of the Leaf on time, according toAutomotive News.

Nissan’s head of North Americanmanufacturing isn’t worried—he isconfident his teams will make up forthe delays to the $1.6 billion electric-vehicle project at the automaker’sSmyrna, Tennessee plant.

“We’re still targeting to launchon time,” Bill Krueger, head of thecompany’s manufacturing and sup-

ply chain management, said in aninterview with Automotive News.“It’s too early to give up on meet-ing our original timing. We havejust shy of a year and a half to makeit up.”

Two plants in Japan are currentlybuilding the electric Nissan Leafsedan and its battery modules in lim-ited numbers for world markets. Nis-san North America Inc. plans to beginmass producing them in Smyrna, TN,for the Americas in late 2012.

“We had people over there train-ing when the lights went out,”Krueger said. “Production didn’t hap-pen for a month. That drove the train-ing curve back.”

Krueger had two dozen peoplefrom Smyrna at the Leaf’s Japaneseproduction sites when the disasterbrought large parts of Japan to a stand-still. Also, utility problems continue tocomplicate business operations insome areas.

Nissan is spending $1.6 billion tobuild a plant that will yield as many as200,000 battery modules a year and anassembly operation inside Smyrna to

produce as many as 150,000 Leafs an-nually.

Most of the U.S. staff in Japan istraining to handle production. In addi-tion, Japanese tooling companies aremaking equipment for the 2012launch, and parts suppliers and tech-nical staffs from Japan are followingtheir own schedules to meet theSmyrna launch.

“We’re looking at work-aroundsto try to accelerate the schedule now,”Krueger said, referring to changes inthe order of project tasks.

“The tsunami and the destructioncertainly didn’t help. But we’re goingto try to make up those losses.”

Nissan: Despite Japanese Disasters, US Leaf Full Launch Will Be On Time


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Nissan’s all-electric Leaf

Chevy Cars Get Highest BrandShare in 20 Years, GM SaysU.S. Chevrolet car sales in the firsthalf of the year are set to reach theirhighest share for the brand in 20years, outselling trucks in June for thethird straight month. Chevy cars ac-counted for just above 50 percent ofthe brand's total U.S. sales forJune—the third consecutive month inthe majority—and 47 percent for thefirst six months of 2011, said AlanBatey, vice president of sales andservice for Chevrolet. He declined todisclose GM's expected total resultsfor June, which the company reportedon July 1.

Through May, Chevy sold385,257 cars and 362,443 trucks—with total brand U.S. sales rising 17percent in an overall market that im-proved 14 percent.

"You'll see continued strength inpassenger cars, particularly in thecompact and mid-car segments,"Batey said.

Citing gas prices that are stillabout $1 a gallon higher than a yearago, GM pointed out that 46 percentof Chevy's retail buyers in the first sixmonths chose a more fuel-efficientfour-cylinder engine in their vehicles,double the rate of five years ago.

agement module contract.“I’ve never have even had the

program turned on,” the shop ownersaid. “They already have a year-and-a-half of my money. I said they cankeep the amount I’ve paid but justcancel it from there on. But they wantit all. I know if I ran my business likethat I would be out of business.”

Stuck in contract after DRP changesSteve Schaefer is only too familiarwith being locked into a contract withan information provider. Schaefer isthe president of Schaefer AutobodyCenters, which operates six shops inthe St. Louis, Missouri, area. Fouryears ago, he said, the company joinedan insurer’s direct repair program thatnecessitated that he add a particularestimating system, signing a 4-yearcontract with that system provider forthree of his shop locations.

“Having been burned before, aclause was added to the agreementsuch that if I ever ceased to participatein that specific insurer’s DRP pro-

gram, the contract could be termi-nated,” Schaefer said.

However, a few months later, theinsurer switched to a new informationprovider, requiring its DRP shops touse a different system than the one theinsurer had previously required.

Schaefer said he was among thesimilarly-situated shops that asked thefirst information provider for somesort of release or relief from the con-tract for the system they no longerneeded or wanted.

“I was told I was bound to the fullterm of the contract since I was stillparticipating in the insurer’s DRP pro-

gram, despite thefact that the in-surer was nolonger using (thatsystem),” Schae-fer said. “I under-stood that they hadsome up-front im-plementation costs

that had to be covered, but a 4-yearcontract for a product I wasn’t usingwas ridiculous. Their excuse was theyhad stockholders to protect. Mythought was: How about your cus-tomers and this industry?”

Today, almost $42,000 later,Schaefer said, he is almost done pay-ing off that obligation.

“It’s a shame when these compa-nies don’t respond with the same rea-sonable ethical business practices weexpect of ourselves and business part-ners in general,” Schaefer said.

Beware of automatic renewalsScott Johnson of Greensboro BodyCompany in Greensboro, NC, saidshop owners should remain keenlyaware of when any software contractsend. Such contracts, he said, often in-clude automatic renewal clauses, andif you make even one payment beyondthe term of the original contract, it au-tomatically renews for another year ormore.

John Hackleman of HacklemanAuto Collision Repair, in Danville,Ind., concurred. He switched shopmanagement systems last year, andtold the previous system provider heno longer needed the support he waspaying for every month.

“I found out that although wewere well beyond our original con-tract, it renews automatically in one-year increments,” Hackleman said. “I

discovered this at my anniversarymonth but had not given them the 30-days’ notice to stop as required in thecontract. So I was required to pay foran additional year and was not able tochange their mind.”

Another Indiana shop owner,who also asked not to be identified,said he actually had some success inrenegotiating a contract with an infor-mation provider. Like Schaefer, hehad signed the agreement for an esti-mating system—even though his shopalready had another one—in order toparticipate in a particular DRP. Whenhe decided to part ways with that DRP,he called the information provider tosay he no longer wanted that secondsystem, only —like Johnson andHackleman—to find out he was sev-eral months into an automatic renewalperiod.

“The only answer I could getwas, ‘Sorry about your luck,’ and in-formation on what page in the contractthat was so I could get my magnifyingglass out to look at the clause,” theshop owner said.

He now considers himself luckythat the information provider soonupgraded to a new system. When rep-

Continued from Front Page

Contract Frustration

Steve Schaefer


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According to the legal team for Gun-der’s Auto Center in their infamousbattle with State Farm Insurance, lim-ited documentation surrendered byState Farm in response to a court’sdiscovery order revealed the results ofthe insurer’s annual labor rate surveyshave been altered.

While the nation’s largest privateauto insurer has not provided all theinformation demanded in the court’sorder; the information they did pro-vide is seen by many as the preverbal“smoking gun” and a strong indicatorof an even more pervasive nationwidepractice.

In review of surrendered docu-ments it was found whereas responseto State Farm’s labor rate survey sub-mitted by Gunder’s Auto Center,along with other local competitors,had been altered by State Farm’s Esti-matics Team Manager, Robert “Bob”Davis in an apparent effort to skewthe results to best serve the insurer bylowering rates and allowances.

Ray Gunder states: “I am confi-dent this is not an isolated instanceand that this is the likely the reason

they have failed to supply us all thesurveys and other information as or-dered by the court. For years, acrossthe entire country, monies have beenwithheld from repairers under theguise of the so-called survey and “Pre-vailing Competitive Pricing” by StateFarm and all those insurers who fol-low their lead. Such deceit and uneth-ical business practices have earnedState Farm many billions of dollars inunjust profits. Billions that the con-sumer never received benefit ofthrough proper and thorough repairs.”

As shown in the accompanyingcopies of Gunder’s survey and StateFarm’s internal documents, Gunder’s“Repair Facility Survey” was com-pleted and submitted on 09-29-2009.This survey shows where it lists 15technicians and 34 work stalls. Fur-thermore it is asked of the repairer:“Do you use an automated paint mate-rials rate calculator?” which Gunder’smarked “YES” and left the question:“Rate charged for paint materials”blank.

As illustrated in State Farm’s in-ternal “Repair Facility Rates” page,

dated 09-30-09 (the following day), itclearly shows whereas the results of theinformation submitted by Gunder’swas changed and the survey was al-tered to reflect that the ”shop capacity”was noted as “10” and the “usepaint/mtrl rate calculator” was noted as“N” (NO). Furthermore State Farm en-tered a “rate charged for paint materi-als” of $26.00 where Gunder’s hadlisted none. This information alsoshows to have been updated by StateFarm’s Bob Davis.

The third and final document:State Farm’s “Market Area Informa-tion” reveals whereby 55 market areashops were surveyed representing atotal “capacity” of 260 and suggests a“PCP” of $26.00 per refinish hour formaterials.

This report reflects that “0”,ZERO, none; not one respondent notedthe “use of a paint/mtrl rate calculatorusage” even though Gunder’s clearlyhad. This document shows “last ap-proved by BCXO Davis, Bob”.

The full text of these docu-ments can be seen at www.autobo-dynews.com.

resentatives of the company con-tacted his shop to see why it hadn’tconverted over, the shop owner toldthem he wasn’t using it and didn’twant it.

“The next day a lady called andsaid she could not get me out of thecontract but could put me into a lessexpensive alternative,” the shopowner said. “I am now paying abouta third of what I had been paying.”

His recommendation: First thingupon signing a new contract, take thelow-tech approach to knowing whenyou are able to get out of it.

“I now have it on every calendarin the office to cancel the contract bysending them a letter 90 days, 60days and 30 days before the end ofthis contract,” he said.

John Yoswick is a freelance automo-tive writer who has a body shop in thefamily in Portland, Oregon. He hasbeen writing about the industry since1988. He is also the editor of theweekly CRASH Network (for a free4-week trial subscription, visitwww.CrashNetwork.com). ContactJohn by email at [email protected].


Gunder’s Auto Center Alleges State Farm Altered Prevailing Rate Surveys

What makes a dealership distinctive?By my definition, that dealership musthave a greater image of integrity, serv-ice, and loyalty than their competition.They have the greatest number of reg-ular customers, and the best word-of-mouth reputation. Even their smallestcustomers know that their business isappreciated.

I offer you an example, an organ-ization that has not just survived, buthas grown steadily based on their cus-tomer service. Lasher Auto Group inElk Grove, CA is an excellent exam-ple of the rewards of good service. AJKillian, the parts manager, was deter-mined to stay active even when otherswere cutting back or even closing. Henow offers eight full time delivery ve-hicles covering the greater Sacra-mento area.

This is no sudden success; it hascome slowly over the last eight years.Steady, reliable service enabled AJ

and his partner customers to groweven in the hardest times. He talked tome about his operation, and I passalong some of his ideas here.

Quicker loading of his deliverytrucks happens with a drive-throughsystem that avoids congestion.

AJ handles all the stocking or-ders, but delegates the customer or-ders for better service. VW, Honda,and Chrysler programs assist himwhen Insurance Company demandscreate excessive use of non-OEMparts. Hopefully other manufacturerswill follow their lead, and also helptheir dealer body to compete.

Separate inventories, approach-ing 1.5 Million, but with combined fa-cilities, for more efficiency.

Expanding when necessary,watching driver over-time for clues,and always having a spare deliveryvehicle available.

Trucks routinely deliver within

35 miles, and a scheduled deliveryeven goes 125 miles for some veryspecial customers.

AJ has two full time parts repre-sentatives, and visits his customerswhenever he can.

AJ belongs to the California Au-tobody Association, and attends theirmeetings.

All of these ideas have one thingin common, they all relate to customerservice. All the dealers who failedtheir customers, several in this area,are now closed. I believe that the con-tinuing increase in this dealers busi-ness is due to overall attitude. Positiveattitudes will create positive results.

If you are in the southern Sacra-mento area, and need parts for a VW,Audi, Subaru, Isuzu, Suzuki, Dodge,Chrysler, Acura, or Jeep, I whole-heartedly recommend Lasher AutoGroup. I have no doubt that you willbe pleased with their service.

I invite other parts managers tocontact me, and tell me their own sto-ries of success. Wholesale relation-ships, quality personnel, alwaysstriving to be better, these philoso-phies deserve rewards. I will be happyto add you to my list of distinctivedealerships.

Larry Williams is a former partsmanager and consultant with nationalawards and over 30 years of experiencein creating profitable departments. Hecan be reached at [email protected].

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Larry Williams is an innovative parts manager with national awards and over 30years of experience in creating and managing profitable departments. He canbe reached for consultation at [email protected]

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Carl Owen’s Paint and Body in Tyler,TX, is a family run business that hasgrown into a business with two areashops; one specializing in auto bodywork and one in RV and truck work.

Carl Owens Paint and Body hasbeen a family-run business for over 40years; Carl Owens Sr. opened theErwin Street shop in 1965 and had alloperations running out of one shop for decades. Carl Owens Jr. took overmanagement in 1981 and was able toopen a second location dedicated tojust auto repair about 5 years ago. Carl

Owens Jr. currently oversees all man-agement operations at both shops.

“This business was started in1965 by Carl Owens Sr. and it waspassed down to Carl Jr. in 1981 whostill runs the business today,” saidAndy Wood, Manager of Carl OwensRV and Truck Collision Center.

The truck shop is a 9 acre facilityand employs about 40 people. Theauto shop is a 2 acre facility and em-ploys about 20 people. Between bothshops the business sees around 120cars and various trucks per month andis able to pull in $600,000 gross permonth.

“We’re the biggest shop withinabout a 100 mile radius, from Dallasto Shreveport,” said Wood. Betweenboth locations Carl Owen’s is able toservice all sorts of different vehicles.

According to Wood both shopsare outfitted with the latest state of theart equipment. The truck shop hassome custom equipment pieces most

body shops would not normally seebecause Carl Owen’s deal with trucks,trailers, RVs and field equipment.

Both shops use a laser alignmentmachine and 2 downdraft spraybooths.

The truck shop is outfitted with a50 ton car grabber frame machine and

a 35 foot, 60 footand 65 foot truckbooth. The truckequipment enablestechnicians to re-pair vehicles thatmost shops wouldbe unable to workwith. This rangesfrom big rigs to

trailers to tractor equipment used byarea farmers.

Both shops are using PPG paintsfor their auto and truck painting needs.The auto shop is using PPG DeltronDBC acrylic paints and the truck shopis using PPG Dell Fleet paints.

Both Carl Owens shops also offersa lifetime warranty on any of the workdone at either shop. This warranty cov-ers anything that may happen as a re-sult of the shops work and includes anybody or mechanical repair work.

Technicians at both shops arealso I-CAR Certified. The business of-fers free estimates and rental cars inorder to better serve Carl Owens’ cus-tomers every need when having theircar repaired at either facility.

More information can be found atwww.carlowenspaint.com.

Carl Owens Auto Collision Center10145 Hwy. 64 EastTyler, Texas 75707(903)566-5300

Carl Owens RV and Truck CollisionCenter2415 E. ErwinTyler, Texas 75702(903)597-2628


Carl Owen’s Paint and Body in Tyler, TX, Offers Top Rated Auto, RV and Truck Repair

with Ed Attanasio

Shop and Product Showcase

with Ed Attanasio

Shop Showcase

with Ed Attanasio

Social Media for Shops

with Erica SchroederShop Showcase


Industry Insightwith John Yoswick

Erica Schroeder is a writer and editorial assistantfor Autobody News in Oceanside, CA. She can bereached at [email protected].

RV and Truck Collision Center Manager Andy Wood Auto CollisionCenter ManagerJohnny Nipper

The other day I received a report formAaron Schulenberg, the ExecutiveDirector of the Society of CollisionRepair Specialists, about a study donein Germany on collision repairs.Crash-test results and analysis of theimpact of a non-professional repair onthe performance of the side structureof a car (VW Passat) by KTI GmbH&Co. of Lohfelden, Germany.

The study took a late model VWPassat, with ultra high strength steel re-inforcements in the rocker and “B” pil-lar, conducted a side impact at about30mph, detailed all the damage, andrebuilt the vehicle using used parts,MIG welds, and an older SqueezeType Resistance Welder. They did notuse any OEM current replacementdata, but they utilized common ac-cepted repair methods used in the col-lision industry. They referred to thosein the article as “10-year old repairmethods.”

What was written in the introductionof the study is what I and others havebeen preaching for years.

“The new materials mean thatbody shops must continuously ensurethat they are conversant with the re-quirements for new tools, proceduresand information about the repairprocesses. New welding machinesneed to be used, training is required,and OEM information has to be ac-cessed to make sure that the correct re-pair methods will be applied. Withoutthis knowledge it is likely that an inad-equate repair will be the result, poten-tially placing the car and its occupantsat much higher risk in a later crash.”

“In parallel to the introduction ofnew materials, single component partsof earlier vehicles have been replacedby highly integrated, multi-materialcomponents on more recently designedcars. The production of a modernBody-in-White is characterized by

complex manufacturing processes andbonding techniques. Taken together,the technical progress made by theOEM’s has resulted in correspondingnew challenges for the repair shops.Repair shops must ensure they havewell trained staff and are equippedwith appropriate tools to cope with thetechniques needed for professional re-pairs on today’s cars when they aredamaged in an accident. If such tech-niques and knowledge are not avail-able, a nonprofessional repair may leadto a significant reduction in the safetyand quality of these cars.”

“Unprofessional repairs may re-sult from of all or any of the following:● Incorrect method and/or sequence ofrepair● Poor assembly of correct/incorrectspare parts, components and sub-sys-tems● Fitment of low-quality spare parts,components and sub-systems

● Incorrect assembly and connectionof electrical/electronic systems andsub-systems● Absence of correct, special or cus-tom tools● Repair of damaged parts when actualreplacement is necessary.”

Let’s take a look at the study. Igoing to give you a condensed versionfor this article, but you may read theentire study at the SCRS website(www.scrs.com) or at autobo-dynews.com (see my column section).

The following scenario, includingtwo high-speed crash tests was carriedout, and then analyzed:

1. The car was damaged by a sideimpact similar to an intrusion by thefront of another car into the passengerside of the test vehicle, according to theside-impact tests of Euro NCAP.

2. A repair was carried out as ifdone in a car body shop or garage withno information about the correct way

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Tech Notes

National News in BriefWEB WINDOW: - www.autobodynews.com

Regional News in BriefWEB WINDOW: - www.autobodynews.com

with Jeremy HayhurstPublisher’s Page

with Karyn HendricksShop Showcase

with David M. BrownShop Showcase

Shop Showcasewith Jeremy Hayhurst

Hey Toby!with Toby Chess

California Autobody Associationwith David McClune

Collision Repair Association of CA.with Richard Steffen

Insurers Excel at Steeringwith Richard Steffen

Year in Quoteswith John Yoswick

Transition Planningwith John Yoswick

Mainstream Media

My Turnwith Joe Momber

Toby Chess is an I-CAR program instructor, Welding specialist, and former salvage yardoperator. Toby is universally known in the collision industry for his charitable works,worthy causes, and magic tricks. He can be reached at [email protected]

to repair this particular car and withoutthe correct tools or welding machines.The repair conforms to a typical stan-dard carried out about 10 years (twocar generations) ago. This would beconsidered as a non-professional repairby today’s standards.

3. After the repair, this vehiclewas involved in a follow-up crash sim-ulation in the same configuration i.e.,a side impact on the repaired passen-ger side, at the same speed.

The picture below shows the setup of the side impact test.

“After the side impact the car wasseverely damaged on the passengerside, as intended. The sill and thefloor/undercarriage behind it were par-ticularly distorted. Additionally, thedoors and the B-pillar were consider-ably damaged. There was no damage

to the screen pillar or windscreen glass.The pyrotechnic protection/restraintsystems (Front and rear passenger sideairbags, front passenger belt pre-ten-sioner and passenger side curtainairbag) were correctly deployed. Over-all the car body structure deformed andbehaved as expected. As well as the vi-sual analysis, electronic measurementof the car body was carried out. Thisshowed the maximum intrusion to be161 mm.”

The vehicle was repaired after thetest and these were the procedures fol-lowed:”

NON-PROFESSIONAL REPAIRThe damaged car was repaired with anolder spot welding machine with fixedpressure and 6.4 kA maximum current.

Note: It is recommended that anInverter type welding machine is usedwith 10 kA maximum current and avariable pressure (maximum 10 bar) tojoin the high strength steel safely. Thedeformed inner sill, made from ultrahigh strength steel, was re-shaped andpartially replaced on a bench then re-fitted using a MAG welding process.

Note: The “Professional” repairwould include complete renewal of the

B-Pillar and other deformed structureswith components made from highstrength steel. A partial repair of suchsteels is not acceptable, as the structureand therefore the strength of the mate-rial will be severely degraded whilewelding and reforming.”

“After the vehicle was repaired,

the vehicle was crashed again and allthe noted areas in the first crash werecompared with the second crash.

It was immediately evident thatthere was a substantial difference, withfar more comprehensive deformationof the car body after the second impact.The B-pillar had noticeably higher in-trusion into the passenger compart-ment in comparison with the firstcrash, especially at the lower part at theconnection with the sill. Note: Latermeasurements of the car body con-firmed there was 60mm more intrusionafter the second test, compared to thefirst crash. Other differences were no-ticeable at the cant rail/roof and thetransmission tunnel which both dis-played severe deformation not seen inthe first crash. It seems that the loadpaths were quite different in the secondcrash. It was also noted that the topright corner of the windscreen wasdamaged in the second crash, furtherindication of changed load paths.These comparisons made it evidentthat a change of load paths and there-fore of the energy dissipation was dueto the unprofessional repair. The py-rotechnic protection/restraint systems


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Autobody News August 2011FLORIDA • GEORGIA • ALABAMA • MISSISSIPPI

Nissan Researching Solar Charging for Batteries in its All-Electric LeafJapanese automaker Nissan is testingan easier and greener way to rechargeits Leaf electric vehicle by using solarpower, part of a broader drive to im-prove electricity storage systems, theAssociated Press reported.

Nissan’s Leaf went on sale latelast year, but the automaker is look-ing ahead to about five years timewhen aging Leaf vehicles may offeralternative business opportunities inusing their lithium-ion batteries as astorage place for electricity.

Nissan Motor Corp. acknowl-edges that, once the Leaf catches on,a flood of used batteries could resultas the life span of a battery is longerthan an electric vehicle’s.

Electricity generation and stor-age are drawing attention in Japanafter the March 11 earthquake andtsunami caused massive blackouts in

the country’s northeast. A nuclearpower plant that went into meltdown,Fukushima Dai-ichi, after backupgenerators were destroyed by thetsunami, is also renewing fears abouta power crunch.

In the new charging system,demonstrated to reporters earlier thismonth, electricity is generatedthrough 488 solar cells installed onthe roof of the Nissan headquartersbuilding in Yokohama, southwest ofTokyo.

Four batteries from the Leaf hadbeen placed in a box in a cellar-likepart of the building, and store theelectricity generated from the solarcells, which is enough to fully charge1,800 Leaf vehicles a year, accordingto Nissan.

Although interest is growing inrenewable energy such as solar and

wind power, a major challenge is thestorage of electricity, which remainsexpensive without a breakthrough inbattery technology.

Such interest is likely to keepgrowing in Japan because of fearsabout the safety of nuclear power. TheHamaoka nuclear plant is being shutdown because of such concerns, andmore may follow.

Other Japanese automakers, suchas Toyota Motor Corp. and HondaMotor Co., are working on similarprojects, such as linking hybrids withsolar-equipped homes as part of en-ergy-efficient communities called“smart grids.”

Electric vehicles produce no pol-lution or global-warming gases butneed electricity, whose productionmostly relies on polluting oil or gas.

Even after a Leaf is ready to be

scrapped, its battery is likely to have80 percent of its capacity. On the plusside, the Leaf with its high-capacitybattery can store the equivalent of twodays of household electricity use, Nis-san said.

“What’s important for Nissan isto show solutions through EVs, stepby step,” said Corporate Vice Presi-dent Hideaki Watanabe.

A joint venture with SumitomoCorp. called 4R Energy Corp. plansto offer eletricity storage systems likethe one at Nissan headquarters forbusiness and public facilities as acommercial product by 2016.

Nissan also hopes to start sellingsuch storage systems for regularhomes by the fiscal year starting inApril 2012. It will carry out field testsstarting in December, 4R EnergyPresident Takashi Sakagami said.

Companies Working to Expand Natural Gas Vehicle OptionsVehicle owners who opt to convertvehicles to run on compressed naturalgas have a new refueling option, ac-cording to the Detroit News.

Michigan Consolidated Gas Co.on July 14 unveiled a new, four-pumpcompressed natural gas station—complete with a credit card reader forthe public. It is one of 13 such stationsin Michigan that are open to the pub-lic.

The natural gas utility is hopingthe alternative fuel’s lower emissionsand lower cost per equivalent gallonof gasoline will propel more compa-nies that use heavy vehicles such astrucks or low-gas-mileage vans toconsider making the switch to com-pressed natural gas.

“As you make it more conven-ient for people and there are more op-tions for refueling, it makes it a moreattractive alternative,” said JohnAusterberry, a spokesman for DTEEnergy, the parent company of Mich-Con.

In 2009, MichCon was awarded$5.4 million in federal money throughthe nonprofit Clean Energy Coalitionto boost the number of natural-gas fu-eling stations in Michigan and con-vert 173 new Ford Econoline vans tooperate on natural gas.

DTE Energy is investing $6.8million toward buying the new vansand refurbishing more than 10 othernatural gas stations it operates acrossMichigan.

Jerry Norcia, MichCon presi-dent and chief operating officer, saidhe personally bought a Ford F-150Harley-Davidson model this year andconverted it to run on natural gas.

“Especially at $1.94 a gallon(equivalent to gasoline), it makes mefeel good every time I jump in thattruck and drive it,” he said.

The cost to convert a regular gasvehicle to natural gas, though, is abarrier that prevents some companiesand others from making the switch.

Conversions can range from

$11,000 to $20,000, depending onfactors such as the natural gas tanksize, said Ken Baranski, director ofsales for Suburban Ford of SterlingHeight’s fleet division.

The dealership sold the vans toMichCon and contracted with Na-tional Fleet Services of Michigan forthe conversions.

“I’ve already saved about $1,000in fuel,” Norcia said, after filling 2.9gallons of compressed natural gasinto his truck for $5.67.

The U.S. Energy InformationAdministration estimated in 2009 that645 vehicles were running on com-pressed natural gas in Michigan, upfrom 518 in 2008. The 2009 numbersare the most recent available.

Nationally, more than 114,000natural-gas powered vehicles are onU.S. roadways, according to the fed-eral government.

About 1,000 natural-gas fuelingstations are available across the na-tion, about half of which are publicly

available, says National Gas Vehiclesfor America, a Washington D.C.-based trade association representingthe natural gas vehicle industry.

Refueling infrastructure and therange of a natural-gas vehicle areamong other barriers to more adop-tion, said Sean Reed, executive di-rector of the Ann Arbor-based CleanEnergy Coalition. Although these bar-riers will potentially exist for any newvehicle technology.

The coalition, through its $15million federally funded Green Fleetsinitiative, works with other Michiganentities to deploy clean-fueled vehi-cles, such as those running on naturalgas and liquefied petroleum gas, andbuild infrastructure to support them.

“If they don’t know anybodywho has a vehicle like this, it makes itseem like a challenging thing to dobecause of the unknown,” Reed said.

“When people see more of themaround, it gives people a greater com-fort level.”


with Rick WhiteShop Management

with Stefan GesterkampPaint Management

with Gonzo WeaverGonzo’s Toolbox

with Richard ArnoldJobber Journal

with Dale DelmegeAsk Dale

Mainstream Media

Automakers’ Actions and Analysisby Autobody News Staff

Shop Showcaseby Autobody News Staff

with Ed AttanasioShop and Product Showcase

with Ed AttanasioConsumer Callout

with Walter DanalevichShop Strategies for Savings

with The Insurance InsiderInside Insurance

with Ed AttanasioCustom Corner

with Chasidy Rae SiskCompany Connections

with Chasidy Rae SiskNortheast News

with Chasidy Rae SiskShop Showcase


with Erica SchroederShop Snapshot

This is a new story by Scott “Gonzo” Weaver as posted on his website, www.gonzostoolbox.com.Gonzo has been serving the Tulsa area at Superior Auto Electric for over 27 years. See his book“Hey Look! I Found The Loose Nut”, which provides a Good Laugh for Mechanics of Any Age.The book is available at amazon.com. Contact Gonzo at [email protected].

Leave it to the manufacturers to takea simple thing like heat and air condi-tioning and turn it into an electronicjungle of wiring, sensors, and com-puter components.

HVAC units have come a longway from when I started in the busi-ness. Not that I want to dwell on thepast, but it might be a good idea tomake sure we understand the basicsbefore diving into the problem oftoday’s systems. I always feel that if Iunderstand a system fully beforedoing any repair work I’m morelikely to get it right the first time.

Diagnostics procedures varyfrom car to car and from year to year.I’m finding more and more thesedays it’s a lot easier to diagnose theHVAC system with a scanner ratherthan with a print and test light. Withthe advent of the electronic door mo-tors and the crazy locations on someof these components I would defi-

nitely try to use a scanner when pos-sible.

An interesting fact: even onsome of the aftermarket scannersthere is a wealth of information onHVAC systems. Before purchasing ascanner I would ask whether or not itcovers HVAC units and which years,which models, and how thorough it is.The more information you can havebefore you have to get your handsdirty the better.

One of the more common repairsI’ve see on both domestic and importsis connections. The manufacturers (inmy opinion) have gone to the point ofmaking these connection just barelysurvivable, but, not for the length oftime that consumers are stretchingtheir vehicles useable years on theroad.

The other item of concern is thecontrol sensors, i.e. high pressure sen-sor, low pressure sensor, sun load, etc.,

for the most part I wouldn’t drag outthat test light and start stabbing thewires. They may look like a sensor,they may have wires like sensors, butthere’s a good possibility that it’s not apositive or negative signal at the sen-sor. In some cases the sensor maybereading a digital type signal (waveform voltage) that would be easierread on a scanner screen instead ofthat 12v test light. These values arethen sent to the PCM to be interpretedand used to determine the actual A/Cclutch engagement or door positions.There again, a scanner is the propertool of choice, not the test light.

Assuming we don’t have a com-ponent failure and that the entire prob-lem is a connection somewhere—let’ssay at the blower switch—which insome cases is also the “ON” switch forthe entire system. If the plastic hous-ing has been melted and the physical“metal” connector is skewed out of

place chances are that no matter howmuch manipulating you do to “re-fit”the metal tab back into place it’s stillgoing to end up back where it startedat and your customer will be back atyour door with the same problem.

I would locate a replacementconnector either from the dealer orthe local parts store. (I’ve had next tono luck getting a connector from thesalvage yards, most of the connectorsthat come from the salvage yard arejust as bad as the one I already have inthe car. But, you might get lucky.)

The advantage of using a scannerto see certain sensor values and doorpositions also has one extra quality tothe diagnostic process. Codes; codesfor the HVAC system are valuable in-formation for you as the tech. How-ever, a code is not the answer, a code isa starting point or a direction for repair.So many times I see vehicles come in

How to Keep Your Cool When Working With HVAC Diagnostics

See HVAC Diagnostics, Page 28

From California to Massachusetts, thejudicial system and lawmakers aretackling related to the auto insurancethat pays for much of the work colli-sion repairers do. The federal govern-ment is also considering the role itshould play in regulating insurers aswell.

Here’s a wrap-up of some of theinsurance-related news that will likelybe of interest to shops.

Feds eye more insurance over-sight. Federal legislation (HR 1943)that would partially repeal the Mc-Carran-Ferguson exemption from an-titrust regulations for insurers hasbeen reintroduced into Congress byReps. Peter DeFazio (D.-OR) andLouise Slaughter (D.-NY).

“No matter what political ideol-ogy, most can agree that insurancecompanies should play by the samerules as virtually every other industryin America,” DeFazio said.

A similar bill, which requiresonly that health insurers operate underantitrust laws, passed the House dur-ing the last Congress but was notacted upon in the Senate.

The Automotive Service Associ-ation (ASA) has supported such legis-lation, saying it is a step towardbroader repeal of McCarran-Fergu-son.

Meanwhile, former Illinois Insur-ance Commissioner Michael McRaithstarted work in June as the first direc-tor of the new Federal Insurance Of-fice. McRaith previously worked invarious capacities in connection withthe National Association of InsuranceCommissioners, and was an attorneyin private practice for 15 years inChicago, representing insurers andother financial institutions.

McRaith leads a new federal of-fice with little regulatory power butthat will report to Congress next year

on gaps in the existing state-basedregulation of insurers.

Court decision clears way forlawsuits. A California appeals courtruling in June appears to open theway for policyholders to sue insurersfor violations of the state’s anti-steer-ing regulation rather than leaving en-forcement of that section of theinsurance code up to the InsuranceCommissioner.

The appeals court reversed alower court’s dismissal of ChrisHughes’ potential class action suitagainst Progressive. Hughes sued Pro-gressive claming that the insurer did-n’t tell him after a 2005 accident thathe had the right to select the shop thatwould fix his vehicle (and he thustook it to a Progressive DRP shop andwas unhappy with the work).

California insurance code pro-hibits insurers from suggesting or re-quiring use of a particular shop unless

the insured asks for a referral or is no-tified in writing of the right to use anyshop. Hughes’ suit said Progressivehas a company-wide practice of using“its position of power over its insured,in the form of incentives and require-ments to carry out its program ofsteering.”

Progressive argued that priorcourt rulings held that suits brought byprivate parties to enforce the insur-ance code are not provided for underCalifornia law. But the appellate courtfound that Hughes was not suing overa violation of insurance code but forviolation of unfair competition law.

Texas again cautions insurers.Texas, too appears to be brewing as akey battleground in the fight oversteering. For the second time within ayear, the Texas Department of Insur-ance has issued a bulletin remindinginsurers that state law prohibits themfrom “directly or indirectly” limiting


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State and Federal Governments Consider New Insurance Regulations

with Ed Attanasio

Shop and Product Showcase

with Ed Attanasio

Shop Showcase

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Social Media for Shops



Industry Insightwith John Yoswick

John Yoswick is a freelance writer based in Portland, Oregon, who has a body shop in thefamily and has been writing about the automotive industry since 1988. He is the editor of theweekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com).Contact him by email at [email protected].

auto insurance coverage by limitingpolicyholders from using a shop oftheir choice.

The bulletin also states that whilean insurer is not required to pay morethan a reasonable amount for repairsor repair parts, neither that nor policylanguage suggests that the reasonableamount for repairs or parts must bebased on the amounts charged by DRPshops.

Insurance Commissioner MikeGeeslin said that despite his similarwarning last August, his departmentcontinues to receive reports of insur-ers steering and limiting reimburse-ment rates.

Others states pass or consider in-surance legislation. Alabama Gov.Robert Bentley has signed a new lawto create by 2013 an electronic data-base to match up cars in that state tovalid insurance policies; the systemwill enable law enforcement officialsand DMV officials registering vehi-cles to verify proof of insurance. Of-ficials estimate that about 22 percentof Alabama drivers lack car insur-ance.

A legislative proposal in Michi-gan would allow low-income drivers

with clean driving records in WayneCounty (which includes Detroit) topurchase reduced personal injury autoinsurance coverage for lower rates;data from the Insurance InformationInstitute indicates Detroit drivers havethe highest premiums in the country,56 percent more than second-placeNew Orleans.

A new law in Nevada raises thepenalties for drivers who let their in-surance lapse; a single lapse of 30days or less carries the same $250penalty that had been in place in thestate, but longer or multiple lapses canraise the penalty to as high as $1,250.

Rhode Island has passed a budgetbill that as of October 1 will requireconsumers whose vehicle is a totalloss to pay sales tax on the full valueof a replacement vehicle. Superinten-dent of Insurance Joseph Torti has is-sued an advisory saying insurers willhave to include sales tax in their set-tlement calculation on total losses inorder to fully compensate the policy-holder.

Under a legislative proposal inMassachusetts, insurers and lienhold-ers could not mandate that a vehicleowner release of any “black box” data

from a vehicle’s “event data recorder”as a condition of a policy or lease. Thebill requires vehicle manufacturers todisclose the presence of such recorders,and designates the vehicle owner as theowner of any such data.

Reports on insurance complaintsavailable. Missouri regulators have re-leased the latest report on consumercomplaints about auto insurers, show-ing complaints fell by 14 percent lastyear to fewer than 3,100. For a copy:http://tinyurl.com/64kp2yf

And Wisconsin regulators saidthey received about 780 complaintsagainst auto insurers last year, about10 percent of all consumer complaintsrelated to insurance. For a copy:http://tinyurl.com/65dt64a

Other insurance-related news.GM will include one year of free autoinsurance through MetLife for resi-dents of Oregon or Washington whopurchase a new GM vehicle by Sep-

tember 6. Commercial and fleet cus-tomers are not eligible. MetLife hasthe option to cancel the coverage afterone year, and GM offers no discountsfor those who choose to stick withtheir current insurer and opt out of theMetLife coverage. The automakersaid it may expand the program toother markets if successful.

Also in the Northwest, some in-surers are clearly keeping an eye onthe ranking they are given by shops inan annual surveys similar to one con-ducted by a number of state associa-tions around the country. OregonMutual Insurance, the 14th-largestauto insurer in that state, is includingwith its policy renewal mailings to itsinsureds a flier touting the “B+” gradeit received (which tied it for the high-est grade among 21 insurers) fromcollision shops in a survey conductedby the Northwest Automotive TradesAssociation.


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Collision Week has reported that a newstudy of insurance claims data by theHighway Loss Data Institute (HLDI)finds that Volvo's City Safety collisionavoidance system is working well inreal world situations, and may be pre-venting as many as one in four low-speed rear-end crashes that happen ineveryday commuter traffic.

The study found that Volvo XC60midsize SUVs outfitted with the stan-dard collision avoidance feature arefar less likely to be involved in low-speed crashes than comparable vehi-cles without the system. In fact, HLDIfound that claims under property dam-age liability coverage were filed 27percent less often for the XC60 thanother midsize luxury SUVs.

The implications for the futurecollision repair market could be enor-mous. This system is designed toavoid typical low-speed (read re-pairable) rear-end crashes. Each timethe system successfully avoids a colli-sion, it avoids a single crash, but as inmany rear-end collisions, the systemeliminates two repair jobs, and some-times more.

City Safety, an automatic brakingsystem based on forward scanninglaser, is designed to help a driveravoid rear-ending another vehicle inslow-moving, heavy traffic. In theevent of an impending collision, CitySafety automatically brakes whentraveling at speeds of about 2 to 19mph. It detects and reacts to other ve-hicles within 18 feet of the frontbumper. If the speed difference be-tween vehicles is less than 9 mph, CitySafety helps avoid some crashes alto-gether. If the difference is between 9and 19 mph, the feature may not pre-vent the crash but will reduce theseverity. It's not designed to work atspeeds faster than 19 mph.

HLDI analysts compared claimfrequency and claim severity for the2010 XC60 with 2 groups: other2009-10 midsize luxury SUVs andother 2009-10 Volvo models. Re-searchers examined claim frequencyand payouts under three types of autoinsurance coverage: property damageliability, bodily injury liability, andcollision.

Claim frequency rates for the

XC60, the only Volvo with the auto-matic braking feature in the study,were lower than all other midsize lux-ury SUVs combined, as well as otherVolvos, under all three types of insur-ance coverage.

Adrian Lund, president ofHLDI, said, "The pattern of resultsstrongly indicates that City Safety ispreventing low-speed crashes and re-ducing insurance costs.

XC60s in the study had fewerclaims, but when owners did seekpayment under property damage lia-bility, the average claim cost of $3,058was higher than for vehicles in eithercontrol group, 10 percent higher thanfor other midsize luxury SUVs and 27percent higher than for other Volvos.

"Although it may seem counter-intuitive, higher payouts for propertydamage liability are a sign that CitySafety works," says Matthew Moore,HLDI vice president and director ofthe study.

Because the feature is preventingthe kinds of fender-benders drivers getinto on busy roads, XC60 ownersaren't filing as many low-cost claims

(those less than $1,500) as people whodrive other midsize luxury SUVs. Thefrequency of high-severity claims($7,000 and higher) was about thesame for the XC60 as it was for thecontrol vehicles.

City Safety has been standard onXC60s since the 2010 model year andis standard on 2011-12 S60 sedans and2012 model S80 sedans and XC70wagons.

HLDI is working with several au-tomakers to similarly evaluate the lossexperience of other crash avoidancesystems technologies as the featuresmake their way into more vehicles.

Automatic Braking, as Implemented by Volvo, Does Prevent Crashes


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One of our reporters, Ed Attanasio,recently entered his Chihuahua mixnamed Ratdog in the 23rd annualWorld’s Ugliest Dog Contest, heldJune 24th at the Sonoma-Marin Fairin Petaluma, California.

The first prize was $1,000, whichcomes with the coveted Ugly Trophyand a year-round modeling contractfrom House of Dog (which alsocomes with another $1,000!).

Unfortunately for Ratdog, therewas one canine uglier than Ed’s pooch(isn’t that always the way it happens?)a dog from Sacramento, Californianamed Yoda. Ratdog finished 2nd inthe Mutt Division, which was a niceperformance by this 14-year-old deafand toothless rescue mutt.

Pictures of Ed and his dog ap-peared in newspapers worldwide andwere interviewed for television news or-ganizations from the U.S., Germany, Is-rael, Japan and the UK, among others.

And You Thought You Knew Ugly Dogs

Here’s the winner–a dog named Yoda fromSacramento, California.PHOTO CREDIT: Simone Alexander

ABN reporter Ed Attanasio displayed Ratdogat the 23rd annual World’s Ugliest Dog Con-test on June 24th at the Sonoma-Marin Fair inPetaluma, California.PHOTO CREDIT: Simone Alexander

The Governors Highway Safety Asso-ciation (GHSA) released the firstcomprehensive overview summariz-ing distracted driving research forstate officials. The report consideredresearch from more than 350 scientificpapers published between 2000 and2011.

GHSA produced the new re-port—Distracted Driving: What Re-search Shows and What States CanDo—with a grant from State Farm®.The report summarizes: what dis-tracted driving is, how often driversare distracted, how distraction impactsdriver performance and crash risk,what countermeasures may be mosteffective and what states can do to re-duce distracted driving.

“Despite all that has been writtenabout driver distraction, there is still alot that we do not know,” said GHSAExecutive Director Barbara Harsha,who oversaw the report’s develop-ment. “Much of the research is in-complete or contradictory. Clearly,more studies need to be done address-ing both the scope of the problem andhow to effectively address it.”

The report outlines the followingcertainties:•Distractions affect driving perform-ance.•Drivers frequently are distracted, per-haps as much as half the time.•Drivers adapt to some extent: theypay more attention to driving and re-duce their distracting activities inmore risky driving situations.•Distractions are estimated to be asso-ciated with 15 to 25 percent of crashesat all levels from minor property dam-age to fatal injury.•Texting likely increases crash riskmore than cell phone use.•Cell phone use increases crash risk.

Based on the existing research,the report urges states to implementthe following countermeasures:•Continue to leverage effective, low-cost roadway countermeasures such asedgeline and centerline rumble strips,which alert motorists when they aredrifting out of their driving lane.•Record distracted driving in crash re-ports to the extent possible, to assist inevaluating distracted driving laws andprograms.

•Monitor the impact of existing hand-held cell phone bans prior to enactingnew laws. States that have not alreadypassed handheld bans should wait untilmore definitive research and data areavailable on these laws’ effectiveness.•Evaluate other distracted drivinglaws and programs. Evaluation willprovide the information states need onwhich countermeasures are effectiveand which are not.

The report also lists countermea-sures that states should consider, such as:•Enact a texting ban for all drivers anda complete cell phone ban (both hands-free and hand-held) for novice drivers.•Enforce all existing cell phone andtexting laws.•Implement distracted driving com-munication programs.•Help employers develop and imple-ment distracted driving policies andprograms.

GHSA Executive Director Bar-bara Harsha stressed, “While dis-tracted driving is an emotional issuethat raises the ire of many on the road,states must take a research-based ap-proach to addressing the problem.

Until more research is conducted,states need to proceed thoughtfully,methodically and objectively.”

Harsha also noted that high visi-bility texting and hand-held cell phoneenforcement demonstration projects inNew York and Connecticut, funded bythe states and the U.S. Department ofTransportation and modeled after theClick It or Ticket seat belt program,are proving to be effective in helpingto change motorist behavior.

“Our report includes the prelim-inary results of these cell phonecrackdowns, which have prompteddramatic declines in hand-held cellphone use and texting behind thewheel. The final results are expectedshortly and should be considered asstates move forward with educationand enforcement initiatives.”

Visit www.ghsa.org to view thefull report.

Comprehensive Review of Distracted Driving Research Released


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(Front and rear passenger side airbagsand the front passenger belt pre-ten-sioner) were correctly deployed but thepassenger side curtain airbag failed tooperate.”

To make clear the differences be-

tween the two tests, we compared pho-tographs, sequences of high speedcrash-movies and electronic measure-ment of the car body. With the help ofthe time analysis in the high-speedcrash-movies we can for instance com-pare the time of highest intrusion. Theanalysis clearly shows higher intrusionat the same moment in time in the sec-ond crash test.

Note that the side curtain de-

ployed in the first crash test, but failedin the second one. I have video show-ing the effectiveness of side curtainson vehicle occupant safety. In the first2009 Prius, the side curtain was de-ployed and measurements of the crashdummies were taken. The result wasminor injury to the front and rear pas-

sengers. In the second scenario, theside curtains was disabled and anotherside crash test was conducted at 35mph. The result was horrific. The dri-ver’s head was struck by the crashingbarrier, which would result in a death.The rear dummy sustained major in-juries to the neck, shoulder and left

arm. This is the reason that by the year2013, all vehicles sold in the US willhave side curtain air bags.

Note the great amount of damage

to the rocker and B-pillar in the secondcrash test. This is very evident by thenext set of pictures showing the dam-age to the passenger seat in the second


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Continued from Page 19

Ten Years Old?

Crash Test 1 Crash Test 2

Crash Test 1 Crash Test 2

Crash Test 1

Crash Test 2

crash test.“After removing all the seats and

necessary trim, the deformation of thetransmission tunnel after the secondtest was clear to see. The cross-mem-ber which supported the front seat hadpushed into the transmission tunnel,distorting it severely. In comparison,there were no measurable changes atthe transmission tunnel during the firstattempt.”

As I stated in the beginning of the

article, the complete test results can befound at the web sites. I strongly urgeyou (repair owners and managers) toprint out the OEM’s recommended re-pair procedures and give them to yourtechs and estimators. The liability istoo high not to follow OEM proce-dures. Think about the safety of yourcustomers and what it may mean in asecond collision.


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Crash Test 1

Crash Test 2

J.D. Power Survey Ranks Ford 23rd out of 32 Auto Brands, of USManufacturers Only Cadillac Makes the Top Ten For the first time since Ford CEOAlan Mulally took charge of the au-tomaker, its initial quality scores havefallen below the industry average.The J.D. Power & Associates 2011Initial Quality Rankings put Ford in23rd place among 32 auto brandsranked by consumers.

Ford fell 18 spots from #5 lastyear, with the latest survey showingFord registering 116 problems per100 cars.

The industry average (107 prob-lems per 100 vehicles) improvedslightly from last year’s IQS rankingswith Lexus topping the list this yearwith 73 problems per 100.

The top 10 in the J.D. PowerIQS Rankings.

#1 Lexus, #2 Honda, #3 Acura, #4Mercedes-Benz, #5 Mazda, #6Porsche, #7 Toyota, #8 Infiniti, #9Cadillac, #10 GMC

The other American brands allcame in below the industry average.

#14 Chevrolet, #16 Chrysler,#17 Lincoln, #20 Buick, #22 Ram,#23 Ford, #32 Dodge

With Ford, car and truck buyershave been complaining of technicaland electronic features not working as

they should. In January, ConsumerReports called the new MyFord andMyLincoln Touch systems a distrac-tion, summarizing the frustrationsome new Ford buyers are feeling.There have been reports of Ford buy-ers complaining the system strugglesto respond to voice commands or thatit’s simply too confusing.

For Ford, this latest rankingshows the downside of trying to ridethe tech advantage it’s had for last cou-ple of years with the Sync system.Sync was a game changer that not onlyhelped drive sales with higher transac-tion prices, it changed the image ofFord. MyFord Touch was supposed tobe the next generation that would ex-tend Fords lead when it comes to in-car technology and communications.

Overall, Ford is still doing verywell, and the quality of its new carsand trucks are much better than a fewyears ago.


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with new parts bolted in because thelast place that had it read a code and as-sumed that meant replace the part.

A perfect example of this was a2002 VW Beetle that came in with abrand new compressor and fan con-troller on it. There was a code storedfor poor compressor performance atidle, which was exactly what it was

doing. If the car was at an idle the A/Cwas off, rev the engine just slightlyand the compressor would turn on andwork perfectly. Bring it back to an idleand the compressor would shut backoff.

Checking into it a little further, Ifound the real culprit to be the charg-ing system. At an idle the alternatorcouldn’t develop enough output tomaintain all the systems in the car. ThePCM would shut down the A/C tryingto maintain a voltage level that was ac-

ceptable but never got to the point ofcausing the charge indicator to comeon during this whole process (Cars aregetting too smart these days).

The best thing I can tell you aboutdiagnosing HVAC systems is to con-sider the year and make of the car, findout whether or not a scanner can code,read values, and or give you some in-formation on the condition of the com-ponents before you start changingthings. If there isn’t an access by wayof a scanner, then I would suggest a

wiring diagram and a description pagethat will inform you of how each com-ponent works in that given system.

If you keep your cool I’m sureyou can get it diagnosed and repairedbefore your customer gets too hot.


HVAC Diagnostics

If you were asked for a short descrip-tion for anti-corrosion compound, thematerial that is sprayed onto the back-side of panels and inside rails after re-pairs, it is likely that “thin film” and“fine mist” would not be included inthe wording. However, that is exactlythe description given to a new type ofanti-corrosion compound now avail-able that uses what is collectivelycalled thin-film technology.

Thin-film technology productsare polymer resin-based, anythingmore descriptive than that is propri-etary. They're a completely aerosolsystem being distributed by at least

two product makers, Bonding Solu-tions with their Like90 Corrosion Pro-tection System, and Sherwin Williamswith their Shield Corrosion ProtectionSystem (see Figure 1).

The two systems actually comefrom the same source that has its ori-gins in the aerospace industry. Thesame material that's being recom-mended for spraying inside rails andpanel cavities has been used for yearson aluminum welds and sealingjoints on aircraft. Besides an anti-cor-rosion compound, the line also in-cludes a weld-through primer, also

polymer resin-based, and a solvent-based cleaner.

Thin-Film Anti-Corrosion CompoundMost anti-corrosion compounds arewax-based, and even though appliedas a fog spray, can quickly build up aheavy coating with the consistency ofhoney. The thin-film technology prod-ucts start out thin, and the resultingcoating is thin. This allows the mate-rial to not only coat the interior sur-faces, but also wick out between thewelded flanges from the inside. Thereis a dedicated wand that fits onto theaerosol spray can nozzle with a 360°fan pattern tip on the other end (seeFigure 2). Like other anti-corrosioncompound systems, the wand is for in-serting into existing holes or into railsto apply the material onto areas thatcannot be easily reached.

The thin-film nature of the mate-rial, combined with its creeping capa-bility, allows applying it to joint edgesafter welding. On panel applicationswhere there are no cavities, such as awelded radiator core support, the samecavity compound can be applied to theoutside of the joints (see Figure 3).

Just like it does from the inside,

the thin film penetrates between theflanges from the outside, wickingaround the welds to replace the weld-

through primer that burned away. Ex-cess material is cleaned off with thesolvent-based remover, since it is nota good base for painting.

There are two anti-corrosion com-pounds in each system. With theShield system, there is a clear and ablack compound, both identical exceptfor the color. With the Like90 system,there's a dry film compound for seal-ing the joints after welding. The com-pound for cavity protection is a wetfilm that's self healing, similar to con-ventional anti-corrosion compounds.

Product specialists say it’s per-fectly OK to apply more coats of thecavity compound inside cavities, andeven apply another brand of conven-tional wax-based anti-corrosion com-pound over the thin-film technologyproduct, but it's not necessary.

Weldable Weld-Through PrimerThe thin-film technology weld-through primer differs from otherweld-through primers available in thatit is not zinc- or copper-based, so it’s

not conductive. This allows the thin-film technology weld-through primerto be welded through. Our experienceshowed no problems with porositywhen welding GMA (MIG) plugwelds without cleaning the material.

The instructions say to apply avery light coating on both mating sur-faces and wait ten minutes beforewelding. The primer is still tacky atthat point. Any weld-through primeron surfaces that will be refinished iscleaned off with the solvent remover.

Future Collision Repair ApplicationsThin-film technology is also beingconsidered for spraybooth maskingand liquid masking applications. Liq-uid masking was actually the first col-lision repair application for thetechnology some years ago.

The new plans are to improvethat product. The product makers arealso showcasing the benefits of thin-film technology to vehicle makers,though there are no specific recom-mendations or endorsements as of yet.

Thin-film technology productsare one of the new offerings for auto-motive corrosion protection. Thepolymer resin-based aerosols arebeing offered as a thin anti-corrosioncompound and weld-through primerwith some unique qualities.

To learn more about differenttypes of corrosion protection materi-als, repair considerations, and manu-facturer processes attend I-CAR’sinstructor-led (live) Corrosion Protec-tion (CPS01) course.

For information about the Ad-vantage Online, please contact I-CARat [email protected].

Thin-Film Technology Comes to Collision Repair

with Kathy Steck-FlynnAutobody CSI

with Dan EspersenALL OEM Information

with Tom McGeeALL OEM Information

with J.R. CarlsonConsumer Callout

Automaker Actions and Announcementswith Jeremy Hayhurst

Autobody Techwith Jeremy Hayhurst

Parts Profileswith Larry Williams

Automaker Actions and Announcementswith Janet Chaney

I-CAR Tech

Amaradio Explains CRAwith Lee Amaradio Jr.

Consumer Callout


with Ed AttanasioShop Showcase

Say What?!

This article first appeared in the I-CAR Advantage Online, which is published and distrib-uted free of charge. I-CAR, the Inter-Industry Conference on Auto Collision Repair, is anot-for-profit international training organization that researches and develops qualitytechnical education programs related to collision repair. To learn more about I-CAR, andto subscribe to the free publication, visit http://www.i-car.com.

Figure 1 - The thin-film technology corrosionprotection products are all aerosol

Figure 2 - The dedicated spray wand for theanti-corrosion compound is stiff, but flexible toallow a 360° spray pattern to reach all areasof a cavity

Figure 3 - On welded joints, the anti-corrosioncompound can be sprayed on the outside ofthe joint after welding to allow it to wick intothe joint


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by Greg Horn, VP Industry Relations,Mitchell International

The Q2 2011 Mitchell Industry TrendsReport (ITR) contained a feature Iwrote about how repairable estimatescan best be executed, “Are You Meas-uring Your Auto Insurance ClaimsMetrics Properly?” I argued (persua-sively, I hope) that defined metricsand a clear plan can help make yourbusiness great, achieving measurablybetter auto insurance claims process-ing outcomes in the process.

The key is to understand whoyour competitors are and if you canreplicate their performance. Only thencan you have an achievable perform-ance improvement goal that allowsyou to focus on the person, part andprocess that can be improved.

Determining what is great esti-mating performance, and whether thisgreat performance can be replicated,requires a large sample size to allowfor a statistically significant evalua-tion. In addition, the ability to drilldown and segregate vehicles by type,age and country of origin as well as

factoring in the geography of the re-pair estimates are all necessary inorder to truly have an accurate com-parison.

Comparing your performanceagainst the industry average by identi-fying the best performers isn’t a sim-ple, mindless process, and nor isanalyzing the data and setting per-formance benchmarks. Adding to thecomplexity is the constantly changingmix of vehicles coming through therepair process.

As an example of how specificmetrics need to be in order to bemeaningful, consider this—there canbe more than an hour difference inlabor time in Removing and Replac-ing a used bumper assembly vs. over-hauling an existing damaged bumpersystem. That hour difference can beimportant in an area with extremelyhigh labor rates.

To measure metrics properly,looking at the distribution of theclaims by inspection type (some-times called appraisal channel) canhelp you let the data help your busi-ness. It is quite revealing in terms of

distribution of claims severity. Re-moving the lower dollar estimates al-ters the overall average paid severity(not sending independent appraisersout on small hits and relying onclaimants to fax in estimates for ex-ample), reducing repair vs. replace,paint hours metrics and part usewhen comparing estimates to ap-praisal channels that routinely seethose smaller hits.

Similarly, Direct Repair averagepaid severity is actually a measure ofthe completed repair orders and notthe average of an appraisal written bya staff appraiser. Why is that? Becausesome claimants will make a claim andnot repair the vehicle, so any hiddendamage or price changes would not bereflected in these appraisal totals.

Again, no easy task to ensure thedata is as close as possible for com-parison, and next up is measurementscale: do you want to measure yourcompany performance against the av-erage or the best in class? Both are ad-visable; measuring merely against theindustry average only provides a com-parison to the middle, and not the bestthat can be achieved.

Rather, you need to find wherethe best performers are in your givendata subsets, those in the 75th per-centile and above. Establishing a best-in-class goal that is achievable be-cause it considers the types of busi-nesses (standard vs. non-standardinsurer, vehicle mix, etc.) you are in-dicating are your closest competitorsalong with other factors, such as ge-ography, is a worthy goal – one thatwill help you meet your particular per-formance goals.

All the data means something.The key is identifying what the datameans to your business performance.And this brings us to the importanceof understanding what to measure.Many industry measurements andmetrics are somewhat flawed, andneed to be revisited, or refined with asecond measurement, in the name ofproper measurement and dependablemetrics. In addition, many best-in-class metrics are a moving target.There are multiple factors in flux thatkeep the definition of best perform-ance ever-changing: Americans aremoving towards smaller and morefuel-efficient cars, so the repair vs. re-placement of panels performance met-ric will change. Smaller cars, thinnergauge metals, changing metallurgy,

and the low cost of alternate parts willreduce repair opportunities.

On the topic of changing metrics,currently we see OEMs and theirprice-matching programs having aninteresting impact on market share as-sessments. OEMs’ price-matchingprograms help them sell more parts.But lowered OEM parts prices makeit look as though OEMs are losingmarket share to aftermarket and usedparts, at a faster rate than measuringthe number of OEM parts specified onthe average repair. In fact, today thepercentage of alternate parts use on es-timates is overstated when using theindustry standard metric of ‘percent-age of parts dollars’. When measuringthe number of parts by part type, wesee that used parts have remainedfairly steady at a little under 1 part perestimate, and aftermarket parts at bitover 1 part per estimate. Looking atparts use in this way gives us anotherimportant measure of parts perform-ance and provides better visibility intothe performance metrics that matter toyour business.

The industry needs more com-plete picture of parts use. I suggestkeeping the existing metric and indus-try standard and then for true insight,add the number of parts on the esti-mate by parts type. This approachdoes go against the prevailing wis-dom, but understanding the real metrichere is important—because by sup-plying the majority of parts on a Re-pair Order, the OEMs are the pivotalparties of cycle time, and shops needto maintain good communication withall of their parts vendors and under-stand what is in stock and when thedelivery will be made.

Starting in the third quarter of2011, the next Mitchell IndustryTrends Report will include this newmetric, in a bid to help tame the devilin the details and help the industrymeasure metrics properly.

Statements and opinions ex-pressed in this article are solely thoseof the author. They are not offered asand do not constitute legal advice oropinion of Mitchell International, Inc.


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Hands Repair Network that the com-pany says are designed to positivelyimpact customer service and cycletime. The announcement comes in theform of a video released by the com-pany featuring Tracy Tramm, All-state Claim Service Manager for theGood Hands® Repair Network.

In the video directed at the DRP

shops, Tramm says “As you know, re-ducing auto cycle time is a key compo-nent in improving customer satisfactionfor Allstate and your facility... as youcontinue to deliver priority service toour mutual customers.

“It goes without saying, that thequicker you reach out to the customer,the sooner they know, they’re in ourgood hands. I also want to remind youof four key messages and processchanges to the network program inearly 2011.

“Compliance with these items re-mains a core requirement for your partic-ipation in Allstate’s direct repair program.

“First and foremost, your shopwill give priority service to Allstatecustomers having their vehicles re-paired by you. Estimates must becompleted and uploaded within 24hours of your receipt of the vehicle.Third, your facility will be required tocommit to a guaranteed completiondate for all vehicles repaired under theNetwork program. Your shop will be

responsible for any and all costscaused by a failure to meet the guar-anteed completion date.

And finally, at the customer’sreasonable request, your shop willprovide extended hours of operation.Contact your local performance man-ager to answer questions. You are whyit works. Thank you.”

The video can be viewed atwww.autobodynews.com by search-ing this story under the “Insurer Ac-tions and Announcements” section.


Allstate Process

Allstate Shakes Up President’s Position, Shares Drop on the NewsJoseph P. Lacher Jr., president of All-state Protection, is leaving effective im-mediately, Allstate Corp. announcedJuly 18. Shares dropped significantly(@5%) on the news.

Various presidents as well asclaims and product operations execu-tives of the various Allstate Protectionunits will report directly to Thomas J.Wilson, Allstate’s chief executive.Lacher, who led all of Allstate’s prop-erty and casualty offerings as presidentof Allstate Protection, no longer ap-pears on a list of executives on All-state’s website. Lacher joined Allstate

in November 2009 after having workedat Travelers for more than a decade,eventually becoming chief executiveofficer of Personal Insurance and exec-utive vice president at the competinginsurance firm. At Allstate, Lacher suc-ceeded George Ruebenson, an execu-tive who retired after almost 40 years.

Last month, at an investor confer-ence, Lacher outlined a business plan togrow Allstate’s P&C segments with anew distribution model. The NationalAssociation of Professional AllstateAgents did not look upon the plan fa-vorably.

Lacher told investors Allstate willbe increasing homeowners’ rates andtightening underwriting standards in aneffort to achieve a combine ratio in thelow 60s, excluding catastrophes, by2013. In auto, Lacher said Allstate isprimarily concentrating on New Yorkand Florida, which account for 20 per-cent of the carrier’s business.

Allstate plans to buy online autoinsurer Esurance and independent in-surance agency Answer Financial fromWhite Mountains Insurance Group Ltd.for about $1 billion. The transaction issupposed to close this fall.

Fiat, Chrysler to Unite ManagementChrysler Group will have a single man-agement structure soon, Sergio Mar-chionne, CEO of both companies, saidJuly 13, as he takes another step towardmerging the two automakers. Mar-chionne plans to announce a unifiedstructure “in terms of leadership prettyquickly,” the executive told AutomotiveNews reporters. Marchionne plans tomerge the carmakers to reduce costsand achieve a target of more than $140billion in combined revenue by 2014.

Fiat consolidated Chrysler's finan-cial results starting at the end of May, asign of the rapid integration of the twoautomakers since the U.S. manufacturerexited bankruptcy in June 2009.


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Hyundai and Kia Both Raise2011 Sales ForecastsHyundai Motor Co. raised its 2011U.S. sales forecast to 624,000 units,representing a 16 percent gain fromlast year, the Korean automaker saidJune 30. Last year, the Hyundaibrand's U.S. sales rose 24 percent to arecord 538,228. Sales through Mayare up 29 percent to 263,588 vehicles.

Reuters reported June 29 thatKia Motors Corp. also hiked its 2011U.S. sales forecast to 433,000 units.That would be a 21.5 percent increasefrom the 356,268 vehicles the brandsold in the United States last year.Through May, Kia's sales are up 45percent to 200,060 units from theyear-ago period.

Hyundai credited robust demandfor current and upcoming vehicles forthe higher sales target. Recent vehi-cle debuts include the redesignedElantra compact, the 2012 Accentsubcompact and a freshened 2012Genesis luxury sedan. The new 2012Veloster sports coupe and an updatedEquus full-sized luxury car will debutby year end.

In January, Hyundai MotorAmerica said production constraintswould limit U.S. sales to around600,000.

Groupon Offers First New Car Deal With Detroit Auto DealershipGroupon Inc offered its first carcoupon on July 12, a sign the largestonline daily deal company is expand-ing into bigger-ticket items, accord-ing to reports made by Reuters.

Groupon offered a $199 dealgood for $500 off the purchase orlease of a new or pre-owned vehicleat LaFontaine Auto dealership in De-troit.

Unfortunately for the companiesinvolved, only four consumers agreedto pay $200 for the $500 discountvoucher. Groupon and LaFontainehad set 10 as the minimum requiredfor the vouchers to be issued.

In an effort to turn things around,the dealership and Groupon extendedthe offer from the original two days tofour and considered lowering thenumber of consumers needed.

But the lukewarm responseshowed that the online coupon crazeisn’t a natural fit with auto retailing.

Groupon, the group-orientedcoupon site that specializes in dailydeals, has more than 80 million mem-bers, usually offers discounts on

smaller items—such as restaurantsand spa visits. The company typicallytakes 50 percent of revenue generatedby deals. Branching out into biggerpurchases means that 50 percent cutwill be bigger in dollar terms.

“The prospect of opening upmarkets like new cars and leases isattractive,” said Ben Edelman, an as-sociate professor at Harvard BusinessSchool who has been critical ofGroupon. “To the extent they can stilltake 50 percent revenue share that’smore money.”

Groupon has done some otherbig-ticket deals recently, such as$500 off closing costs for real estatepurchases, Edelman noted.

The car offering may be moreproblematic, he added.

“This voucher is for a very smallportion of the cost of a car or lease,so it’s basically an agreement to buyor lease a car from LaFontaine,”Edelman said. “That’s poor negotiat-ing because the dealer could take ad-vantage of that by offering the samecar for more money.”

In many Groupon offers, likerestaurants and spas, prices areposted already, so customers knowwhat they are getting, Edelmannoted. In the case of the car voucher,it may not be clear what the discountwill be applied to, he explained.

“They need to fix that before thispart of the model can take off,” Edel-man said.

Groupon filed to sell shares tothe public last month, saying it hopedto raise at least $750 million.

The company has been calledinto question by critics who say itsbusiness—essentially a coupon serv-ice—can be easily replicated both bystartups and existing Web power-houses.

Google Inc has already begunsuch a service and Amazon.com Incstarted a similar effort called Ama-zonLocal this month.

The company has also garnereda lot of criticism for the percentage ofprofits they take from a businesses’sales made through deals on theirwebsite.

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Autobody News August 2011 Southeast Edition

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