What the Industry was Talking About in 2018
By John Yoswick
This past year in the industry was marked by settlements of important lawsuits, significant issues found with non-OEM parts, discussion of the increasing impact of vehicle safety systems, and continued difficulties caused by the technician shortage.
Here’s our annual review of the past 12 months as reflected in some of the most important, interesting or entertaining quotes heard within the collision industry.
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“I’m seeing the typical amount of total sales a single estimator can handle decline, because the estimating process continues to become more complex, including research of OEM repair information. I’m starting to see a few shops with an employee doing nothing but scanning vehicles and researching OEM repair procedures. I think it will be interesting to watch what shops report about billing and being paid for this moving forward.”
— Mike Anderson of Collision Advice, after his 2018 “Who Pays for What?” survey that found 11 percent of shops report being paid an administrative fee for researching OEM information “always” or “most of the time” by the top eight-largest auto insurers; this was up from just 6 percent in the same survey in 2015
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“This is a really great example of the difference that CIC [the Collision Industry Conference] can make when everybody is working together for a common goal.”
— Dan Risley, co-chairman of a CIC taskforce established in 2017 to address concerns related to CCC Information Services’ “Secure Share,” after CCC announced it was dropping plans for a 50-cent per-estimate fee for third-party providers (such as rental car companies, shop management system providers, CSI services, etc.) wishing to receive estimate data from CCC ONE users
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“You can tell there was zero penetration of the welds holding that bracket onto the rest of the part. Based on the welds, there’s no question this part would have completely come apart in any future, even minor accident.”
— a West Coast shop owner notifying NSF International about an NSF-certified non-OEM bumper reinforcement bar after the welds holding one of the brackets on the bar broke apart as the shop was installing it; the part was subsequently decertified by NSF
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“If those companies are the owners of those vehicles, my business may not be as needed as it once was. Those are extremely large companies that will probably self-insure. My guess is that what we do here doesn’t make a whole lot of sense for Google, if they looked at it. They would have a different solution. They can do whatever they want with those vehicles, and I think they will.”
— Clint Marlow, auto claims director for Allstate Insurance, on autonomous vehicles being less likely owned by individuals than by vehicle manufacturers and large fleets like Uber, Lyft and even Google, and what that may mean for shops and insurance companies
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“By 2016 and 2017, that number [for 2016 and 2017 vehicles] had grown to nearly 47 percent. So, unfortunately, the area of the repair bill that potentially has smaller margins than labor … continues to grow.”
— Susanna Gotsch, director of industry analysis for CCC Information Services, noting that parts as a percentage of overall repair costs have continued to climb; in 2003, for example, parts accounted for just 42 percent of the overall repair costs for 2003 vehicles
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“If you’re so inclined to work with electronics and computers, and have some mechanical aptitude, my gosh, the demand for you is soon going to be such that you can write your own ticket. The possibilities are incredible. I often have people tell me, ‘Well, my shop is not that big; I just can’t justify a person to work on this sort of thing.’ But one of the things we are learning is that when you start scanning every car, and get into a lot of these calibration operations, all of a sudden you find that even a shop with maybe four or five body techs can keep this type of person busy all the time.”
— Darrell Amberson of LaMettry’s Collision, a Minnesota-based MSO, about “advanced driver assist and safety system (ADAS) technicians,” a new category of shop employees he envisions shops having to conduct vehicle scans and system calibrations
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“The case was resolved to the satisfaction of all parties involved.”
— attorney Todd Tracy after settling the lawsuit he brought against State Farm on behalf of a Texas couple who had successfully sued John Eagle Collision Center for faulty repairs the dealership made to a vehicle in which the couple were injured in a subsequent accident; terms of the settlement of the lawsuit against State Farm, which had argued the insurer had influenced how the shop had repaired the vehicle, were not disclosed
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“CCC estimates that we will see a five percent reduction in claims by 2022, a 10 percent reduction by 2024, and a 35 percent reduction by the year 2050.”
— Peter Bishop of CCC Information Systems on how quickly ADAS be in enough vehicles to begin having an impact on claims frequency
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“Many times certified parts are ordered and that’s not what’s delivered to the repair shop. I think it was important for us to recognize that, and make sure that what’s ordered is what gets delivered. When a certified part gets ordered and a non-certified part gets delivered, I think that hurts all of us in this room.”
— Bob Frayer of NSF international, telling a gathering of non-OEM parts manufacturers and distributors that NSF developed a certification program for distributors in part to ensure they are actually delivering certified parts to shops that order certified parts
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“This is going to become more and more prevalent. Our customers are going to know exactly what’s happening to their car the entire time it is in the shop, and exactly what wasn’t put back to pre-loss condition if those issues weren’t corrected. They’ll know if those trouble codes didn’t get re-set, if those sensors weren’t plugged back in, if those headlights aren’t operating right. They’re going to know that probably even before our technicians know it. So we need to get used to dealing with the fact that our customers will be very up-to-speed on their vehicles.”
— Sean Guthrie, whose family operates the seven-shop Car Crafters collision repair chain in New Mexico, about consumers increasingly having access to some of their vehicle’s telematics information through cell phone apps or other means
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“We had a tech tell us how he had been a 4.0 student and had scholarships to go to lots of universities, but he really wanted to be a collision repair technician. He told his school counselor he was excited about going to tech school, that it was his passion. But the counselor just berated him and said, ‘You’re wasting your talent. How dare you? You could do so many things. Why would you want to be a technician? That’s such a dirty job.’ Years later when the student had a chance to speak to a group of school counselors [including his own], he didn’t identify the counselor but said, ‘I want you to know I make more money than you do, and I have better career opportunities than you do.’ We need parents and students and counselors to know you can go on any hiring site in the country and find companies looking to bring technicians on.”
— Mariah Sampson of American Auto Body in Billings, Mont.
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“There’s been this belief [by some] that somehow ‘accepted industry practices’ are good enough. The auto manufacturers are here to say it’s not. It’s not good enough.”
— Wayne Weikel, senior director of state government affairs for the Alliance of Automobile Manufacturers, in announcing that that group and the Automotive Service Association (ASA) plan to push for state legislation in 2019 that will call for the use of OEM repair procedures for collision repair claims
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“In our [vehicle safety system] calibration center in Dallas, we are seeing a high failure rate of vehicles that have been repaired in collision shops and brought in for calibration. In terms of radar cameras and things like that on the front of the car, we’re seeing about a 30 percent failure rate. The vehicles weren’t straight enough for calibration. And we’re also seeing about a 50 percent failure rate on blind spot calibration. As a repair community, we need to check ourselves. We’re still an industry that fights over whether the car is going to get measured or aligned. When you have systems that are pulling reference materials based on the center line of the car, that’s a little bit of an issue.”
— Jake Rodenroth of asTech, sharing his concern that the industry may be so focused on the issue of scanning that fundamental elements of repair — like vehicle measurement and alignment — are being overlooked
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“We have yet to test a counterfeit airbag that worked properly.”
— Jon Ruttencutter of the National Intellectual Property Rights Coordination Center (part of the U.S. Department of Homeland Security), sharing video of tests conducted on counterfeit airbags in which the bags failed to deploy, deployed late, broke away from steering wheel or launched projectiles into what would be the interior of the vehicle
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“When I go to a dealer for an oil change, the first thing they do is plug the vehicle in. Yet we’re not willing to do it when we know there are systems that have been ripped off the car? It doesn’t make sense. There’s no way anyone in this room, regardless of what stakeholder side you fall on, would not check to make sure that’s happening if it’s your wife or daughter or your family member [who will be in that vehicle]. We’re looking to partner with facilities that are saying, ‘I’m going to do the right thing, and it doesn’t matter how old the car is,’ or whatever. The parts discussion? We can debate that. We know how to sell parts. We’ll compete there. But on the process, on the things you have to do to fix it correctly, on that [we are looking for shops that] are saying, ‘An uncompromised commitment to safety.’”
— John Eck who has overseen the development of the General Motors collision shop certification program rolling out in 2019
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“In some markets, there’s a war going on. People are buying technicians from the competition. People are putting out new incentive programs that never existed before. There are some MSOs, the larger ones, that are anywhere from 100 to 150 technicians short. At $50,000 of production [per technician] a month, do the numbers, and you can see the throughput that’s being lost because they don’t have the technicians that they need.”
— consultant Vince Romans of The Romans Group
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“Our plaintiffs have been waiting a long time, and we are excited that trial is now upon us.”
— Robert Nelson, one of the attorneys who brought a class action lawsuit against State Farm over the insurer’s alleged role in electing an Illinois Supreme Court justice who later voted to overturn a $1 billion judgment State Farm had been ordered to pay in 1999 to vehicle owners whose vehicles were repaired with non-OEM parts; in September, on the opening day of the latest trial, State Farm agreed to settle with the 4.7 million vehicle owners for $250 million
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“We also noticed differences in when the lane departure warning was issued. Ideally, the warnings are issued just as you are crossing the [lane-marking] line. But we saw early warnings on the right side, and slightly late warnings on the left side. We ended up almost a foot over the [lane-marker] line before we got the warning.”
— David Zuby, Insurance Institute for Highway Safety (IIHS) chief research officer, noting safety system differences caused by a bracket on a non-OEM windshield that was slightly misaligned and allowed for some play in how a camera sensor was situated within the bracket •
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 bulletin (www.CrashNetwork.com). He can be contacted by email at john@CrashNetwork.com.
