By John Yoswick
So much happens in the collision-repair industry that it can be hard to keep up on everything. A few big stories get plenty of attention in the trade press and at association and industry gatherings. But sometimes it’s the lesser-known stories that can have as big an impact on your business.
Here are 10 of these stories from recent months that might have flown under your radar amid the day-to-day challenges of running your shop, but that could prove helpful for you to know about.
1. The Federal Trade Commission early this year issued a consumer bulletin related to the Magnuson-Moss Warranty Act. It states that use of non-OEM parts in itself cannot void a vehicle warranty.
“Still, if it turns out that the aftermarket part was itself defective or wasn’t installed correctly, and it causes damage to another part that is covered under the warranty, the manufacturer or dealer has the right to deny coverage for that part and charge you for any repairs,” the bulletin states.
For a copy of the bulletin, visit: http://tinyurl.com/3zvas3w
2. The Society of Collision Repair Specialists (SCRS) last spring released its findings into whether the paint manufacturers consider tinting and blending as necessary procedures that are commonly performed in conjunction with each other.
“Research of the color code and existing variations provided by the refinish manufacturer, and blending of the color coat are both recommended operations to perform an acceptable match,” SCRS said in a summary of its findings. “If the refinish technician determines that the color variance requires adjustment, it is a consistent recommendation to tint to a blendable match. When tinting is necessary for color adjustment, it is always done in conjunction with blending.”
SCRS has posted individual responses from each of the five major paint companies in the “Technical Info” section of its Web site (www.scrs.com).
3. A new Web site (http://reviews.onlineautoinsurance.com) allows motorists to compare the consumer reviews of auto insurance companies, as well as rate their own experience with their insurer. The site includes reviews of 14 of the largest insurers, and offers a 5-star rating system on factors likes rates, service and claims.
“We are pleased to be able to provide consumers with insights from one of the most important sources in the insurance marketplace: their fellow consumers,” said Cesar Diaz, founder of the site and a veteran insurance agent.
4. J.D. Power and Associates data released this year — based on surveys of more than 11,500 insured drivers who had a claim within the previous 12 months — shows how important to customer satisfaction it is to get repairs done quickly and on time.
Satisfaction levels for the 75 percent of customers who felt their vehicle was done on time were nearly 200 points higher (883 vs. 709, on a 1,000-point scale) than those who felt their vehicle wasn’t done on time.
It doesn’t appear to matter what causes the delay: parts, unexpected additional damage, insurer delays or just plain too much work in the shop. In all these cases, customer satisfaction still never exceeded 728 points.
Setting expectations is particularly important on larger, non-drivable jobs, Jeremy Bowler of J.D. Power and Associates said. Fair or not, customers expect a drivable vehicle to be repaired within a week, and non-drivable vehicles — even the worst “train wrecks” — within two weeks. An extra effort needs to be made to adjust these expectations if they can’t be met, Bowler suggests.
Speed still offers a shop a chance to set itself apart, according to the data. One-in-four customers with drivable vehicles say they didn’t get them back within a week, and one-third of those with non-drivable vehicles didn’t get them back within two weeks.
5. Industry trainer Toby Chess this year has been alerting shops to the need to recalibrate the steering angle sensor that is part of the electronic stability control system on an increasing number of new vehicles. Such systems are standard equipment on 85 percent of 2010 new vehicles, and will be required on all new vehicles as of model year 2012.
The recalibration is an additional procedure that must be done after the vehicle alignment.
“It’s an added step, and there’s also no more 2-wheel alignments with these systems. That won’t work,” Chess said.
He said he is concerned because even though no “trouble light” will be lit on the dash and the vehicle may handle properly under normal driving conditions even if the system is not calibrated, the electronic stability control function may not work properly in a subsequent “emergency maneuver.”
6. Doug Craig, collision-repair manager for Chrysler, said last summer at the Collision Industry Conference (CIC) that Chrysler, Ford and some other automakers are working to “commonize where we can” some of their “approaches to different repairs.”
He said Chrysler also will be moving away from “recommendations” to instead offer much more specific “requirements on what process, procedure and/or components … should be used in a repair.” For example, Craig said Chrysler will often say a certain Mopar part number for an adhesive — “or equivalent” — should be used.
“What is equivalent? That could take a chemical engineer to tell you,” Craig said. “I’m sometimes amazed when I take things to our materials engineering folks and ask, ‘Is this the same thing?’ It turns out some of the snake oil isn’t even close to being the same, even if the label or the product rep says it is. We’re not trying to drive any costs in the repair. We’re not trying to over-simplify repairs. We just want to take some of the judgment calls out of it, so the customer ends up getting an equivalent vehicle back.”
7. The Automotive Education & Policy Institute, which has received a grant from the Alliance of Automotive Service Providers to build a web-based repository of legal decisions finding in favor of collision repairers, has been posting court documents to the “legal cases” section of its Web site (www.autoepi.org).
The Institute was founded by Ohio attorney Erica Eversman, who said that the Web site will give shops and their attorneys easy “access to court precedent and the facts and admissions leading to … decisions that can be used to persuade other courts, customers and insurers that the repairers’ charges are reasonable and necessary for a safe and proper repair.”
8. Both Audatex and CCC Information Services this year began offering an automated labor time system for the additional labor needed when replacement bumpers arrive “raw” or unprimed from the factory.
In the Audatex system, the “prep raw, unprimed bumper cover” labor operation is not automatically added to an estimate but must be selected by the user. A line for the operation will show in the “part edit box” when a bumper Audatex knows to be supplied raw from the manufacturer is selected.
Although the labor time is pre-populated at 20 percent of the base refinish time for the part (or .3 minimum), the user can override this value.
Jack Rozint of CCC said that based on labor studies completed by Motor Information Systems, the pre-populated labor time for the operation in his company’s estimating system is 25 percent of the full refinish time for the part (with a minimum of .1 and a maximum of 1.0).
The feature is available through the “additional operations” menu both when the bumper is known to arrive unprimed and when the condition of the new bumper is uncertain (when it may arrive unprimed); it will not be seen only when the bumper is known by Motor to always arrive primed.
If the automaker has informed Motor the bumper may or will arrive unprimed, footnotes in the CCC system will alert the estimator to this, and a headnote (”Add if Required”) will appear to allow the user to add the “prep unprimed bumper” operation if indeed the part is unprimed.
Both Audatex and CCC said the stumbling block in extending the labor operation option to other types of parts that also may arrive unprimed is that information about the parts isn’t provided to them from the automakers.
9. The Avery vs. State Farm lawsuit was back in the news this fall, six years after the Illinois Supreme Court overturned a lower court’s $1 billion judgment against the insurer related to its use of non-OEM parts. Though State Farm won the case, many consider it to be the reason the insurer has stayed away from requiring use of non-OEM parts.
Prior to the 2005 decision, lawyers for the plaintiffs in the class action lawsuit asked that one of the seven justices on the court, Judge Lloyd Karmeier, recuse himself from participating in the decision because of significant campaign contributions he received from State Farm while seeking election to Illinois’ highest court in 2004 (at which time the Avery case was already pending before the court).
State Farm argued the campaign contributions from its employees and others connected with the insurer were “quite modest.” Karmeier did not recuse himself, and he sided with the insurer on the court rulings in the case.
But this fall, Avery’s lawyers petitioned the court to reconsider its rulings in the case given what they say is new evidence (including an investigation by a former FBI agent) of the degree to which State Farm “was involved in the recruitment of Justice Karmeier as a candidate (and) in the management of his campaign, and that they delivered ‘tremendous’ financial support (at least $2.5 million and as much as $4 million) to Justice Karmeier.”
They argue, for example, that State Farm attorney and lobbyist William Shepherd was on the executive committee of the Illinois Civil Justice League (ICJL), which recruited and endorsed Karmeier as a candidate for the seat on the court, and was involved with weekly conference calls with Karmeier’s campaign manager (the head of the ICJL). Others on the ICJL executive committee referred to State Farm’s level of support of Karmeier as “tremendous” and to the insurer’s financial support of the campaign as “significant.”
Attorneys say the new evidence should lead the court to reinstate the judgment against State Farm, or alternatively redecide the case without Karmeier’s involvement.
Ironically, the plaintiff’s attorneys have also had to file a petition asking that Karmeier not participate in the court’s decision about his previous involvement in the case.
State Farm argues that overturning the Avery ruling would be “disruptive in the extreme” to the Illinois legal system because the ruling has been cited in more than 200 subsequent court opinions.
State Farm says it gave no money to Karmeier’s campaign, and says the notion of “State Farm-influenced contributions” cited in the petition relies on an unsubstantiated argument that the insurer controls such organizations as the U.S. Chamber and the ICJL.
The 2-year period for reopening a judgment has long past, State Farm argues, and “the few new allegations (presented) do not materially alter the allegations plaintiffs have relied upon all along in their efforts to secure Justice Karmeier’s non-participation.”
State Farm also argues that some of the Court’s rulings in the Avery case were 6-0 decisions, making Karmeier’s participation unnecessary to overturn the lower court’s decisions.
10. With all the apparent bad news about the nation’s economy, one story many have missed is the relatively good news coming out of the automotive industry. Some economists this fall, for example, were saying it may be the auto industry that “bails out” the nation from slipping back into a recession.
Ford, GM and Chrysler have added 90,000 manufacturing jobs, a 14 percent increase, from the low two years ago. Nissan, Volkswagen and other foreign-based automakers are expanding in the U.S., and dealers are making more per-sale than they have in years. The Commerce Department reported that orders for autos and auto parts jumped 11.5 percent in July, the most in eight years. That followed an earlier government report on industrial production that showed the auto industry was the strongest segment of the manufacturing economy in July. •
John Yoswick, a freelance writer based in Portland, Ore., who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by e-mail at jyoswick@SpiritOne.com.
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