sw 1013 issue web

Tesla Motors has two Texas show-rooms for its luxury electric cars, onein Austin, the other in Houston, butyou can’t call them stores. Texas lawprohibits carmakers from selling di-rectly to customers, as Tesla doeselsewhere. Instead, the companiesmust sell through franchise dealer-ships, something Tesla so far refusesto do. Tesla tried to get the state’s lawchanged, to no avail. So instead ofstores, Tesla’s Texas facilities are“galleries,” where customers can ex-amine the company’s $62,400-plusModel S sedan and talk with Teslareps about the car’s features. Andthat’s about it.

“They can’t tell you the price ofthe car, how to buy the car or give youa test drive,” said Diarmuid O’Con-nell, Tesla’s vice president of business

development. “All they can really dois tell you about electric cars.”

As Tesla expands across thecountry, the company has run into adogged foe: the traditional auto deal-ership and its franchise model. Dealerassociations in several states havetried to shut out Tesla with lawsuitsand legislation, viewing the com-pany’s direct-sales model as a chal-lenge to their way of doing business.They aren’t necessarily worried aboutTesla itself. The Palo Alto companydelivered 5,150 cars in the secondquarter against a forecast of 4,500 andturned a profit of 5 cents per sharewhile analysts expected a loss of 17cents. It remains tiny by the auto in-dustry’s standards, planning to selljust 21,000 cars worldwide this year.

The Mississippi Collision Repair As-sociation and Parts Suppliers are seek-ing industry support in suit againstState Farm and PartsTrader. Over 30plaintiffs, mostly Mississippi bodyshop owners, have filed an injunctionagainst State Farm and PartsTrader inan attempt to prohibit the insurer fromforcing any Select Service shop inMississippi to use PartsTrader.

The suit was filed Aug. 28 by Jack-son, MS-based attorney for the nearlythree dozen plaintiffs, John ArthurEaves, Jr., in the Hinds County, MS,Chancery Court against State Farm Mu-tual Automobile Insurance Company

and PartsTrader LLC.Plaintiff include the Mississippi

Collision Repair Association (MSCRA)OEM parts dealers and other parts sup-pliers and dozens of collision repairprincipals, including prominent local re-pairers John Mosley (Clinton BodyShop) and Doug White (Capitol BodyShop).

The suit seeks the court’s decla-tory judgment and injuction to blockState Farm from requiring the Part-sTrader ordering process in Missis-sippi. The requested injunction is to

1) Prohibit the Defendants from

Mississippi Collision Repair Association andParts Suppliers File Suit Against PartsTrader

See Tesla Motors Surges, Page 23

Tesla Motors Surges Despite Only Two ‘Gal-leries’ in Texas, Legacy of Franchises Holds

See Suit Against PartsTrader, 8

by John Yoswick

Whether or not they participate inState Farm’s Select Service program,shops and parts vendors still have lotsof questions and concerns about Part-sTrader as State Farm continues itsroll-out of the program. Here is someadditional information addressingsome of those questions that repre-sentatives of State Farm or Part-sTrader have provided.

Roll-out schedule. PartsTraderrolled out in September in major mar-kets in California, Nevada and Utah,and in October in Michigan and Ohio.It will reach major markets in Wis-consin, Illinois, Indiana, Kentuckyand Tennessee later this year.

Vendor choice. Shops are notrequired to get price quotes fromanyone beyond their designated pre-ferred dealer. In fact, Partstrader’s

Dale Sailer said, the system defaultsto sending a job’s parts list only tothe shop’s preferred dealer, thoughthe shop can expand the search fromthis default. State Farm does not getdata about whether a Select Serviceshop’s parts list for a job went onlyto the shop’s preferred dealer forquotes.

A shop can “direct order” a partthrough the system without waitingfor any parts quotes; State Farm doesknow, however, if a Select Serviceshop does this.

And if a dealer always gives ashop the same discount, the dealer canset the system up to automatically re-spond with that discount to all re-quests for quotes from that shop.

“Dealers don’t have to hire awhole bunch of people to fill outquotes,” Sailer said.

State Farm and PartsTrader Offer More Infoon Roll-Out, Use of the System

Special SNAPSHOT of the Collision Industry, survey byCollision Repair Educational Foundation and I-CAR p. 30

See More on PartsTrader, Page 38

by Barrett Smith

Eddie Quintela, Owner and Presidentof Collision Concepts of DelrayBeach, FL has once again found itnecessary to file a lawsuit against 21stCentury Insurance on behalf of hiscustomer who made a claim undertheir policy with the carrier.

In 2012, on behalf of his com-pany’s customers, Quintela filed threeseparate lawsuits against 21st Centuryof which the insurer agreed to settlebefore the trial dates. In addition tothe disputed amounts, the insurer paidall of Eddie’s legal fees and costs.

In spite of recent claims whereas

the insurer has provided full pay-ments, as of late, 21st Century claimsrepresentatives have elected to onceagain deny payments for the repairer’s

posted labor rates,processes and pro-cedures as deemedto be reasonableand necessary toproperly restoretheir customer’svehicle. As Such,Quintela, on be-

half of and with the full support of hiscustomer, has found it necessary toonce again file a lawsuit against the

See Quintela, Page 49

Quintela Sues 21st Century A Second Timefor Short-Pays, Makes ‘Cents out of Sense’

Eddie Quintela

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A Frame Paint Booths . . . . . . . . . . . 36Absolute Mitsubishi-Hyundai . . . . . 40American Innovative Manufacturing . 8AutoMax Hyundai Del City . . . . . . . 50BASF . . . . . . . . . . . . . . . . . . . . . . . . . 5BMW Wholesale Parts Dealers . . . . 49Car-Part Pro. . . . . . . . . . . . . . . . . . . 24Certified Automotive PartsAssociation (CAPA). . . . . . . . . . . 25

Chevyland . . . . . . . . . . . . . . . . . . . . . 6Chief Automotive. . . . . . . . . . . . . . . 13CJ, Inc. - Signature - Star-A-Liner . . 16Classic BMW. . . . . . . . . . . . . . . . . . 32Classifieds. . . . . . . . . . . . . . . . . . . . 54Dallas Dodge . . . . . . . . . . . . . . . . . 56David McDavid Auto Group . . . . . . 11Dent Tools Direct USA . . . . . . . . . . 10Don Carlton Auto Group. . . . . . . . . 45Equalizer Industries . . . . . . . . . . . . 38Extractor . . . . . . . . . . . . . . . . . . . . . . 6Finnegan Chrysler-Jeep-Dodge . . . . 2Ford Wholesale Parts DealersTX, OK, LA, NM. . . . . . . . . . . . . . 39

Forklift Wrecker . . . . . . . . . . . . . . . . 22Fowler Honda . . . . . . . . . . . . . . . . . 50GM Wholesale Parts Dealers . . . . . 48Herkules Equipment Corporation. . 26Honda-Acura Wholesale PartsDealers. . . . . . . . . . . . . . . . . . 28-29

Houston Auto Body Association. . . 46Huffines Chrysler-Jeep-DodgeLewisville . . . . . . . . . . . . . . . . . . . 12

Huffines Hyundai Plano . . . . . . . . . 18

Hyundai Wholesale Parts Dealers . 47KBS Coatings . . . . . . . . . . . . . . . . . 18Kia Motors Wholesale Parts Dealers. 43LKQ . . . . . . . . . . . . . . . . . . . . . . . . . 55Malco. . . . . . . . . . . . . . . . . . . . . . . . 15Mazda Wholesale Parts Dealers . . . 52Mercedes-Benz. . . . . . . . . . . . . . . . 19Mike Calvert Toyota. . . . . . . . . . . . . 38Mitchell International. . . . . . . . . . . . 17Mitsubishi Wholesale Parts Dealers. 51MOPAR Wholesale Parts Dealers . . 35Motor Guard Corporation . . . . . . . . . 4North Freeway Hyundai . . . . . . . . . . 9PreFab Ads . . . . . . . . . . . . . . . . . . . . 9Ray Huffines Chevrolet . . . . . . . . . . 37Reliable Chevrolet. . . . . . . . . . . . . . 46Replica Plastics. . . . . . . . . . . . . . . . 20SATA Spray Equipment . . . . . . . . . 27Scoggin-Dickey Buick . . . . . . . . . . 44South Pointe Chrysler-Jeep-Dodge. 21Sherwin-Williams AutomotiveFinishes. . . . . . . . . . . . . . . . . 22, 23

Starlite Coatings . . . . . . . . . . . . . . . 34Subaru Wholesale Parts Dealers . . 53Toyota of Fort Worth . . . . . . . . . . . . 34Toyota of Laredo . . . . . . . . . . . . . . . 14Toyota Wholesale Parts Dealers . . . 48Valspar Automotive . . . . . . . . . . . . . . 7Volkswagen Wholesale PartsDealers . . . . . . . . . . . . . . . . . . . . 53

Volvo Wholesale Parts Dealers . . . . 52Walcom USA. . . . . . . . . . . . . . . . . . 33Young Chevrolet . . . . . . . . . . . . . . . 20

Inde

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ContentsREGIONAL

Amarillo College Collision Program Back . . 4

Amarillo Hail Toll at $500M; Losses like

Hurricanes. . . . . . . . . . . . . . . . . . . . . . . 4

BASF to Build New Facility in Geismar, LA . . 6

Corpus Christi Plant to Pay $750,000 in

Emission Controls . . . . . . . . . . . . . . . . . 8

Houston’s Randy McGinty First to Complete

Every Collision Course at Chief University. . 9

How Tesla Was Shut Out by Texas’

Franchise Laws . . . . . . . . . . . . . . . . . . 24

Insurance Auto Auctions Relocates its

Oklahoma Auction . . . . . . . . . . . . . . . . . 4

New OK Statute Blocks Old Employees

in Recruiting . . . . . . . . . . . . . . . . . . . . . 4

Service King Forms New Relationship

with Axalta. . . . . . . . . . . . . . . . . . . . . . . 8

Sterling Auto Body’s Open Houses

in Webster and Houston. . . . . . . . . . . . . 4

Tesla Motors Surges Despite Only Two

‘Galleries’ in Texas, Legacy of

Franchises Holds . . . . . . . . . . . . . . . . . . 1

Texas to Allow Electronic Proof of

Insurance . . . . . . . . . . . . . . . . . . . . . . . 8

What’s Going on with the Louisiana

Economy?. . . . . . . . . . . . . . . . . . . . . . . 9

COLUMNISTS

Attanasio - Is Radio Advertising a Sound

Decision For Body Shops?. . . . . . . . . . 46

Franklin - Development-Appropriate

Marketing . . . . . . . . . . . . . . . . . . . . . . 12

Insider - Eliminating the “Have Not”

Shops Will Help the “Haves” . . . . . . . . 44

Yoswick - October Retrospective

on the Collision Industry . . . . . . . . . . . 10

NATIONAL

AASP/NJ Announces Support of MCRA

Suit Against PartsTrader. . . . . . . . . . . . 52

ABRA Helps Raise $30,000 for Veterans’

Service Dogs . . . . . . . . . . . . . . . . . . . . 34

Allstate Pays Labor Rate to Settle

12 Pending Claims. . . . . . . . . . . . . . . . . 6

AMI and ASA Give the 2013 Emil Stanley

Merit Award . . . . . . . . . . . . . . . . . . . . . 50

ASA Launches New Website, Improves

Repairer Tools . . . . . . . . . . . . . . . . . . . 32

ASA President Risley Writes to State Farm’s

Ed Rusk Jr. . . . . . . . . . . . . . . . . . . . . . 53

ASRW’s New Format Will Be ‘Vastly

Different Experience’ . . . . . . . . . . . . . . 34

Attorney Spearheads Suit Against Carfax . 50

Automotive Instructors Get Special

AAPEX 2013 Invite . . . . . . . . . . . . . . . 32

Best Way to Research New Product

at SEMA Show. . . . . . . . . . . . . . . . . . . 32

BLS Says Collision Industry Production

Rose in June . . . . . . . . . . . . . . . . . . . . 33

CA Air Resources Board Passes

Windshield Requirement to

Reduce A/C Usage. . . . . . . . . . . . . . . . 52

Caliber Collision Opens Two New

Locations in CO and CA . . . . . . . . . . . . 32

California Teen Dies in Lock-Jammed Car. 53

Car Bench America Says Shops Not

Ready to Repair Newest Cars. . . . . . . . 26

Daimler to Sell Self-Driving Production

Car by 2020 . . . . . . . . . . . . . . . . . . . . 33

Everyday Paint Operations Result in

Explosion and Fatality that Rocks

the Collision Industry . . . . . . . . . . . . . . 54

Franchitti Reunites with The Henry Ford

and the Jim Clark Lotus-Ford 38/1

Indianapolis Winner as Part of Clark

Tribute at 2013 Goodwood Revival . . . . 48

GA and CA Most Expensive States

to Own a Car . . . . . . . . . . . . . . . . . . . . 33

MD Shop Owners Prevail Against Short

Pays—No DRP, No Problem. . . . . . . . . 36

Mississippi Collision Repair Association

and Parts Suppliers File Suit Against

PartsTrader . . . . . . . . . . . . . . . . . . . . . . 1

Mitchell Announces its New Reputation

Manager Package . . . . . . . . . . . . . . . . 34

Mitchell International Sold to Asset

Management firm KKR For Estimated

$1.1B . . . . . . . . . . . . . . . . . . . . . . . . . 51

NABC Partners with ATT on Anti-Texting

Campaign . . . . . . . . . . . . . . . . . . . . . . 33

New SRS Checklist Available . . . . . . . . . . 47

NY Assembly and Senate Hear Bills to

Make Insurance Co. Parts Mandates

Illegal. . . . . . . . . . . . . . . . . . . . . . . . . . 27

Quintela Sues 21st Century A Second

Time for Short-Pays, Makes

‘Cents out of Sense’ . . . . . . . . . . . . . . . 1

Record Fundraiser for CREF . . . . . . . . . . . 13

SCRS Issues Position Statement on

Insurer Mandates. . . . . . . . . . . . . . . . . 14

Sherwin-Williams and Online Blueprint

Provider Team Up . . . . . . . . . . . . . . . . 34

Snapshot of the Collision Repair Industry . 30

State Farm and PartsTrader Offer More

Info on Roll-Out, Use of the System . . . . 1

State Farm Donates $70K to CREF,

Lifetime Over $1M . . . . . . . . . . . . . . . . 23

The 1963 Federal Consent Decree . . . . . . 20

Three CARSTAR Stores Get Praise

for Outstanding CSI . . . . . . . . . . . . . . . 50

What Does Tesla’s Record-setting Safety

Rating Say to the Collision Industry? . . 16

www.autobodynews.com | OCTOBER 2013 AUTOBODY NEWS 3

Contact: Barbara Davies, General Manager * (800) 699-8251

Autobody News | P.O. Box 1516 | Carlsbad, CA 92018 | [email protected]

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Oklahoma law generally disapprovesof contracts that restrict an individ-ual’s right to earn a living, such asnon-compete agreements. However,effective November 1, 2013, a newOklahoma statute will give employ-ers a tool to prevent former employ-ees from hurting their businesses.The new section, codified at 15 Okla.Stat. § 219B, clarifies that employersmay prohibit employees (or inde-pendent contractors) from wooingaway their former coworkers oncethey leave employment. A contract orcontractual provision which prohibitsan employee or independent contrac-tor of a person or business from so-liciting, directly or indirectly, activelyor inactively, the employees or inde-pendent contractors of that person orbusiness to become employees or in-dependent contractors of another per-son or business shall not be construedas a restraint from exercising a lawfulprofession, trade or business of anykind. Restrictions on soliciting anemployer’s workers still have to bepart of an otherwise enforceable con-tract. Employers need to be carefulthat they are not altering the other-wise at-will employment relationshipwith such agreements.

New OK Statute Blocks OldEmployees in Recruiting

Texas insurers have written checks for$500 million to pay claims on haildamage from the May 28 storm inAmarillo. “The Amarillo hailstormjust became the 10th costliest storm onrecord in the state,” says MarkHanna, a spokesman for the InsuranceCouncil of Texas. “The losses fromthis hailstorm are comparable to Hur-ricane Dolly that struck South PadreIsland back in 2008.” That storm is thecostliest in Amarillo’s history.

Last May a storm moved over thecity and caused damage to about 75percent of residential property in thecity, pelting it with baseball-size hailand high winds. Amarillo is the four-teenth most populated in Texas withabout 194,000 people. The storm sys-tem, which included tornadoes, caused$1.3 billion in insured losses to sevenstates. After Texas, it moved ontoOklahoma, where it caused an addi-tional $450 million in damage, ICTsays.

Texas leads all other states in sig-nificant hail events by a wide marginthis year. There were 7,031 major hailstorms in 2012, according to statisticsculled from NOAA’s Severe Stormsdatabase. Most storms happened inMarch, April and May.

Amarillo Hail Toll at $500M;Losses like HurricanesAutobody News has reported previously

on the revival of the Auto Collision cer-tificate program at Amarillo College.The head of the program Eddie Casiassays it may be early in the semester, buthe’s extremely pleased with the turnout.

He says, “we were hoping to getsome students. We didn’t know howmany. We were hoping to have maybe5 or 7 tops, but actually we had a bet-ter turn out than we thought. We endedup having 12 students this year, so itwas a lot better turn out than we ex-pected.” Casias says the body shop in-dustry, in our area included, has a highdemand for qualified workers. He saysthat’s because high schools have got-ten away from teaching the trades.Casias says, “not very many people aregetting into the business anymore. I’mnot sure if it’s just because it’s notbeing pushed as much anymore orwhat the actual reason might be, butbody shops are suffering these days forhelp.”

“Nationwide, the auto body repairindustry lacks trained entry-levelworkers and is struggling to replace re-tiring craftsmen. Every shop has trou-ble finding people,” Casias said.“Now I’ll be able to give students theright start in the business.” Over theyears Casias has taught many helpers

who have gone on to become greatpainters. Casias says 4 years of collegeisn’t for everyone, and he wants totake what he’s learned and pass it on tonew students in a short amount of time.

“This class is actually a ninemonth course, and at the end of thecourse they earn a certificate of com-pletion. With that certificate they cango out into the real world and actuallyget jobs in body shops,” says Casias.

AC’s auto collision program hadbeen teaching students about the in-dustry for about 25 years. Casias saysit was put on hold for the past coupleof years for unknown reasons.

A handful of auto repair shops inAmarillo say they fully support theprogram at AC. Many say they wouldmuch rather hire a student out of theauto collision program than someonewith no schooling.Casias tells us thereis no set limit for the number of stu-dents the class can hold.

The Amarillo College programteaches today’s technology with spon-sor-donated equipment. With his in-dustry contacts, Casias will be able tohelp students land job interviews afterthey’ve completed the program. “Mygoal is to get students ready to startworking in a shop,” he said, “and tomake this the finest program possible.”

Amarillo College Collision Program Back

An increased demand for services hasInsurance Auto Auctions expandingand relocating one of its facilities inthe Midwest.

IAA has announced the reloca-tion of its Oklahoma City site to alarger facility in the region.

This relocation significantly ex-pands IAA’s capacity and fits with thecompany’s strategic vision of growthamong key customer markets acrossNorth America.

“Over the past several years,we have experienced a significantincrease in demand from multiplecustomers in Oklahoma City aswell as the need for catastropheservices in the region,” said TomO’Brien, chief executive officer ofIAA.

“The relocation of our facility toa new state-of-the-art building willallow us to better serve this importantmarket and provide enhanced servicesto our existing customers,” he said.

The new 30-acre facility givesIAA the additional capacity necessaryto serve the greater Oklahoma Citymarket, the company said, and pro-vides for the company’s growingglobal buyer base consisting of re-builders, used-car dealers, automotivebody shops, automotive wholesalers,exporters, dismantlers, recyclers andbrokers.

IAA’s Oklahoma City new auc-tion facility will be located at 7300 N.I-35 Service Road in Oklahoma City,with auctions to take place everyWednesday at 9:30 a.m. CT.

Insurance Auto Auctions Relocates its Oklahoma Auction

Sterling Autobody Centers’ OPENHOUSES, Thursday, September 19th,4pm - 8pm, at 701 Kobayashi Drive,Webster, TX 281-332-0758 and Sat-urday, September 21st, 10am-2pm at9960 FM 1960 West, Houston, TX.281-955-2450Now Hiring • Auto Body/Structural

Techs (Individual Flat Rate Pay) •Auto Paint Techs/Preppers • Estima-tors • Customer Service Representa-tives • Detailers & Porters.For more information, visit:www.sterlingautobody.jobsOr call Toll Free (SE HABLA ES-PAÑOL) 855-208-5636

Sterling Auto Body’s Open Houses in Webster and Houston


BASF will break ground on a new$42.6 million polyurethane blendingfacility in Geismar, LA, next June.

The project was originally slatedfor a Houston site — so much so thatit was initially called “yellow rose”after a Texas folk legend - but localofficials said they were able to lure itaway to Louisiana.

“I’m glad we plucked that yel-low rose from Texas and brought it to

Louisiana,” said Gov. Bobby Jindalat the company’s announcement Sept.12.

Louisiana has offered up finan-cial incentives to help BASF with theproject. Jindal said that the companywill receive a $1.2 million modern-ization credit paid out over five yearsto help with the first phase of the

project. BASF may alsoopt to take advantage ofcertain other programs,including Louisiana’s in-dustrial and “quality jobs”tax exemptions.

Opening in 2015, thisnew facility create 22 newjobs directly, with an av-erage salary of $72,300plus benefits. Jindal alsosaid he expects the projectto produce 145 indirectjobs in the area.

This is BASF’s fourthfacility expansion in Louisiana since2009.

BASF to Build New Facility in Geismar, LA

at www.autobodynews.com

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Allstate Pays Labor Rate to Settle 12 Pending Claimsby Barrett Smith

In June 2013, Allstate claim’s manage-ment contacted Ray Gunder and re-quested a meeting to discuss Allstate’sinterest in bringing closure to the law-suits of which Ray had filed against thenation’s second largest insurer on behalfof a dozen of his customers.

During the meeting with Allstate’sTom Travis and Greg Ashley it wasagreed, based upon service and quality,that Gunder’s Auto Center was indeed en-titled to their labor rate, however, not allrepairers deserve the same labor rate, andconcern was expressed, that should theword get out, how Allstate would payGunder’s labor rate without having to doso for other shops. Ray advised he wouldcontinue to share his journey with the in-dustry, and regardless, if a settlement withAllstate was reached or litigation contin-ued, others would find out as his intentwas that all repairers and their technicalstaff would be compensated fairly fortheir efforts, not just Gunder’s.

In July Gunder’s was advised thatAllstate would settle all twelve pendinglawsuits by paying the full labor rate andall related attorney fees and costs. Fullpayments for each were received lastweek. Allstate makes the 44th insurer todate which has agreed to pay Gunder’s

full labor rates and materials.“I am very appreciative of the way

this was handled by Allstate,” saysGunder. “No one wants litigation; how-ever, sometimes it is needed to get dis-putes resolved. My hope is that this istruly a new way Allstate does businessnationwide and they speak to the entireindustry with one voice.”

The largest payment from Allstatewas for $1,575, while the smallest pay-ment was for $198.

“Enclosed please find payment inthe amount of $1,575.24 for your loss on10/28/2012,” an Allstate representativewrote in documents included with thepayments to Gunder Auto Center.

Gunder has an ongoing trackrecord of suing insurers on behalf of hiscustomers over short pays.

“We’ll be in depositions all week withGeico representatives and have continuedlawsuits with State Farm,” Gunder says.“Perhaps [Allstate] agreeing to our rateswill encourage GEICO and State Farm topay rates and allowances that are fair andreasonable. One can be sure that we’ll con-tinue to pound the rock until they do.”

Gunder Auto Center settled a sim-ilar case with State Farm in 2012. Thecollision center offers auto glass re-placement and repair services for itscustomers. This service is outsourced.

The MarkWest Javelina plant willinvest over $650,000 for facility op-erations improvements that will re-duce flaring events and improvecommunications with the local com-munity.

The gas processing plant willalso pay a civil penalty of $97,500 tosettle violations of the Clean Air Actuncovered by the U.S. EnvironmentalProtection Agency (EPA).

The consent agreement addressesa number of violations occurring fromSept. 1, 2012 to Jan. 30, 2013.

“EPA is committed to reducingtoxic air pollution from sources thathave an impact on the health of ourcitizens,” said Ron Curry, EPA’s Re-gional Administrator. “This agree-ment has a positive and direct impacton improving air quality and commu-nication for the surrounding commu-nity.”

In addition to improving flare ef-ficiency, the settlement requires thatMarkWest Javelina improve opera-tional reliability without increasing fa-cility emissions and improve emissioncontrols. The company will also es-tablish a 24 hour hotline to answer

any community questions about flar-ing events at the facility.

The agreement continues EPA’sefforts to reduce emissions of toxic airpollutants, with a particular focus onindustrial flares. These requirementsfocus on reducing the amount ofwaste gas sent to flares and on im-proving flare operations, both ofwhich work to reduce toxic emissions.Improper operation of an industrialflare can send hundreds of tons ofhazardous air pollutants into the air.More pollution results when waste gasis sent to a flare, or if the flare is inef-ficient. EPA wants companies to flareless, and when they do flare, to burnthe harmful chemicals found in thewaste gas.

The facility is required to pay thepenalty within 30 days of filing theconsent agreement.

To date, EPA has issued all finalgreenhouse gas permits by the dead-line. From pre-application consulta-tions to post-application technicalsessions, EPA’s permitting programhelps Texas companies obtain theirgreenhouse gas permits within theone-year statutory deadline.


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Service King Collision Repair Cen-ters announced a new relationshipwith Axalta Coating Systems. Ax-alta, formerly known as DuPont Per-formance Coatings, will provideService King customers with top-of-the-line, professional paint servicesthrough its Spies Hecker line ofproducts. Service King will have ac-cess to Spies Hecker paint across itsentire nationwide footprint, buildingon its successful prior experiencewith the brand in selected locations.In addition, the relationship will fur-ther allow Service King to maintainits core values of innovation, qualityrepairs and customer satisfaction.

“As we grow as a brand in colli-sion repair, Service King continues itscommitment to provide the best prod-ucts and services in the industry,” saidChris Abraham, Chief ExecutiveOfficer of Service King. “Axalta of-fers the best of the best when it comesto automotive refinishing products.”

Said Nigel Budden, Vice Pres-ident of Axalta’s North America Re-gion. “Our goal is to continue toprovide superior products and serv-ices, working together with our dis-tribution partners and focusing onmeeting Service King’s needs.”

Service King Forms NewRelationship with Axalta

A new law in Texas is making it okayto use a cell phone in the car. But, onlyif it’s to prove you have auto insur-ance. Texas is now one of 23 stateswhere it is legal to show proof of in-surance by pulling up the policy cardon your smart phone.

“There’s already a lot of peopledoing that in vehicles that I’ve stoppedin the past where they’ve presentedthat,” said Senior State Trooper ChrisRay. “Of course that hasn’t been ac-ceptable until now,” he added. Mostmajor car insurance companies offerapps where you can easily access yourpolicy. As with any application, somepeople like it and want to use it,” saidMerritt Vaughn, a State Farm Agentin Amarillo. “Some people don’t wantanything to change. They want theirprinted cards but we clearly know thisis the future.” He thinks have the app asan option will be beneficial for every-one. “Everyone that has had a paper IDcard in their car, they haven’t alwaysbeen actually valid ID cards. This getsaround all of that. Its accurate, it’stimely, if they present it, everyone canbe confident that it’s an active valid in-surance card,” Vaughn said. StateTroopers still suggest carrying thepaper card in your car just in case.

Texas to Allow ElectronicProof of Insurance

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Randy McGinty has worked in thecollision repair industry for more than25 years. He got his start working inindependent body shops before mov-ing to dealerships and eventually

owning his own body shop. Aftermore than a decade of owning and op-erating his own body shop, McGintylost the lease on his building, whichleft him wondering what to do next.His wife suggested he try his hand atbeing an instructor and apply for anopen teaching position at the Univer-sal Technical Institute in Houston.

“I didn’t really know what Iwanted to do next,” McGinty said. “Ihad been teaching people that worked

for me and that I worked beside… Itook all my credentials and everythingelse and presented it to UTI and, aftera series of tests, they decided to hireme. They taught me how to teach, and

I’ve been here ever since.”McGinty teaches both struc-

tural and non-structural automo-tive repair classes at UTI Houston.Earlier this year, McGinty madehistory by being the first person tocomplete every collision repairtraining course offered by ChiefUniversity, the technical trainingarm of Chief Automotive Tech-nologies. For his efforts, he wasgranted the advanced master struc-tural technician and advanced

master structural damage analysisprofessional certifications.

It took McGinty more than 120course hours and nearly 10 years tocomplete all of the collision repairtraining. It’s a feat that McGinty saidjust wouldn’t have been possible with-out the support he received from UTIHouston.

“The only reason I was able totake all of these classes was due to myeducation managers and education di-

rectors here at the Universal Techni-cal Institute,” he said. “Without theirhelp and blessings, this would havenever ever happened.”

When he’s not busy taking classesor teaching students, McGinty and hiswife enjoy riding Harley Davidsonmotorcycles, camping, grilling andwatching movies.

For more information on RandyMcGinty or UTI Houston, call 281-443-6262 or visit www.uti.edu. Youcan also connect with UTI on Face-book and Twitter.

To learn more about Chief Uni-versity classes, call 800-445-9262 orvisit www.chiefautomotive.com. Youcan also connect with Chief Automo-tive Technologies on Facebook, Twit-ter and YouTube.

Houston’s Randy McGinty First to Complete Every Collision Course at Chief University

UTI Houston collision repair instructor RandyMcGinty is the first person to complete everycollision repair training course offered by ChiefUniversity

Gov. Bobby Jindal has been knownto make contradictory statementsabout the economy. “The bottomline is that for too long, Louisiana’sworkers and small businesses havesuffered from having a state taxstructure that is too complex andthat holds back economic prosper-ity,” Jindal said in January, whenpitching his now failed tax reduc-tion plan. But now, it’s morning inLouisiana. “Louisiana is one of thebest places for businesses to investand create jobs,” Jindal enthusedrecently, without mention of taxes.

In May, ChiefExecutive.net de-clared Louisiana the 11th best statefor business. In July, Pollina Corpo-rate Real Estate ranked LA 14thamong pro-business states. Accord-ing to the Bureau of Labor Statistics,when Jindal took office in January2008, there were 1,962,000 peopleemployed in Louisiana. The unem-ployment rate was 3.8 percent. InJuly of 2013, there were 1,947,000million employed Louisianans,roughly the same as when Jindal be-came governor. The unemploymentrate was 7 percent, more than threepoints higher than when Jindal tookoffice.

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20 years ago in the collision repairindustry (October 1993)A proposal was introduced at the Col-lision Industry Conference (CIC) inDenver to develop a third-party evalu-ation of how shops are reimbursed forrefinish and other materials.

Steve Nadler, the owner ofPainters Supply Company in Denver,distributed a 2-page memo suggestingthat a national certified public ac-counting firm be hired to study the ma-terials reimbursement issue. Nadlersaid this study could address the accu-racy of such practices as basing mate-rials reimbursement on paint laborhours, and establishing “ceilings” or“caps” on material charges.

No data has been identified thatcan be used “to support the present re-imbursement methods,” Nadler’smemo states.

He suggested that a CIC subcom-mittee be formed to develop a requestfor proposals for the study from the na-tion’s top CPA firms. Nadler said thatthis step would provide the industrywith estimates of the cost of the 1- to2-year project.

“I could say it’s not going to be$5,000. I don’t think it would be$500,000,” Nadler said when asked forsome projection of costs. “On a full-fee basis, it might be any-where from $100,000 to$150,000. But that’s purelyspeculative on my part, anddepends on the scope of theproject.”

Joe Landolfi of KemperInsurance said the study mayput to rest an issue that hasbeen hotly debated in recentyears.

“We have listened forquite a while about paint ma-terials reimbursement prac-tices,” Landolfi said. “Thismay be a chance to finally (establish)some definitive explanations and pat-terns.” But Rick Tuuri of ADP saidhis company is all too aware of the ex-pense and risk of undertaking such aresearch project. ADP completed amassive revamping of its paint laborsystem several years ago, only to meetwith unprecedented industry resist-ance.

“This is just my personal opinion,not the ADP company line, but it justseems to me that you can spend anawful lot of money studying some-thing to find an answer that nobody re-ally wants to hear,” Tuuri said.

- The project, at least how Nadleroutlined it, does not appear to haveever moved forward.

15 years ago in the collision repairindustry (October 1998)Jack Gillis of CAPA perhaps bestsummed up a demonstration of non-OEM parts at the Collision IndustryConference (CIC) in October when hesaid, “Not one of our better days.”

The demonstration, arranged bythe CIC Parts and Airbags Committee,involved installing several non-OEMparts, including a hood and fender thatbore the CAPA-certified sticker, on anundamaged 1994 Toyota Camry. Fitand other problems with the parts wereobvious, and after the demonstrationGillis said neither of the parts wouldbe listed as certified in the next Certi-fied Automotive Parts Association(CAPA) directory.

The fender, he said, had been de-certified earlier in the week because ofmore than 20 complaints, includingone the week of the CIC demonstra-

tion that was the second complaintafter the manufacturer had supposedlyfixed earlier problems with the part.

—Test fits of parts continued atCIC meetings over the next two years;OEM parts generally were found toscore higher in attendees’ evaluationsof fit and finish, but occasionally non-OEM parts were rated as equal to—andin one case, better than—the OEM.

10 years ago in the collision repairindustry (October 2003)In a special 2-year study of the auto-body repair industry, the CaliforniaDepartment of Consumers Affairs’ Bu-reau of Automotive Repair (BAR)documented that, in nearly half thetransactions it studied, consumerswere charged for parts and labor theydidn’t receive.

The BAR inspected 1,315 vehi-cles that qualified as part of a pilot pro-gram mandated by legislation. Ofthose, 551, or 42 percent, had parts orlabor listed on the invoice that werenot actually supplied or performed.The average dollar amount of over-billing was $811.93.

“We’re disturbed by the pattern ofproblems we found in some shops,”said BAR Chief Patrick Dorais.

– As reported in Autobody News.While the “42 percent” statistic re-ceived a lot of attention, the NationalAuto Body Council (NABC) noted (in

the article) that the vehicles inspectedwere not randomly selected among allthose repaired in California but ratherwere vehicles brought to the BAR byowners concerned about possiblefraud. “Considering the way the sam-ple was skewed by the BAR’s method-ology, it is more surprising that 57percent of the repaired vehiclesshowed no problems at all,” ChuckSulkala of the NABC said at the time.

5 years ago in the collision repairindustry (October 2008)At least six shops in the Temple,Texas, area (about 70 miles north ofAustin, population about 60,000) eachnotified State Farm they no longerwould participate in the insurer’s Se-lect Service program.

Mark Holladay, manager of theDon Ringler Chevrolet body shop, saidthe final factor contributing to his de-cision was what he viewed as State


October Retrospective on the Collision Industry

with John YoswickHistorical Snapshot —John Yoswick is a freelance writer based in Portland, Oregon, who has a body

shop in the family and has been writing about the automotive industry since 1988.He is the editor of the weekly CRASH Network (for a free 4-week trial subscription,visit www.CrashNetwork.com). Contact him by email at [email protected].

See Historical Snapshot, Page 23

Participants at the Collision Industry Conference (CIC) inthe fall of 1998 had a chance to evaluate OEM and non-OEM parts that were installed on a vehicle during theDenver, CO, meeting


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A while back several new shopsopened in my area. When I asked whatthey were doing about marketing, al-most everyone said Yellow Pages and800 number first. Some had boughtinto advertising mailer packages andothers local magazine ads. Naturallysome were focused on putting to-gether a presentation package to sendto DRP coordinators in the hope ofgetting insurance work. Some werealso going around taking businesscards to agents. Almost no one wasdoing any direct solicitation to get im-mediate jobs in the door.

It occurred to me that many shopowners believe there is a general mar-keting setup that everyone should in-clude right away. It seems no onetakes into consideration how market-ing should differ depending on thestage of growth and development ofthe shop. I’ve always viewed the de-velopment of a business much like thedeveloping stages of a trade profes-

sional: Beginner, Apprentice, Jour-neyman, Professional, and Leader. Ateach stage, both professional proce-dures and marketing procedures mustchange too.

I know of one leading body shopthat runs no ads, does no phone solic-itation, has no program for contactingprior customers, and has no DRPs. Itis allied with multiple dealerships andhas an estimating office at many ofthem. It employs a full-time market-ing professional to maintain optimumrelationships with all of the dealershipprincipals. A shop at a lesser level ofdevelopment couldn’t survive thisway.

A beginning—and even what Iwould call an “apprentice” shop—isalso unlikely to do phone solicitation.If it is just starting out and has no cus-tomer base, it won’t have a programfor contacting prior customers. And itis unlikely to have DRPs at this point.The beginning shop owner needs to

focus on one target public at a time.Dealerships and DRPs may be greatsources of volume business, but com-petition is keen for these sources ofbusiness and pursuing them can be awaste of time unless the owner hasfriends in high places who can helpget a deal. A better use of time wouldbe direct selling: Going to mechanicalshops, commercial firms, governmentagencies, charitable agencies, andother organizations that use vehiclesthat will require body damage repairfrom time to time is much better idea.The key principle at this point is toconcentrate financial and personnelresources on specific contacts that canbring in immediate, actual work.

I would consider a “journeyman”shop one that has survived the initialcritical phase — that eliminates manybeginners — and is now getting or-ganized for the long haul. Building abase of repeat customers should beprimary. Gathering in-depth informa-

tion from each new customer opensthe door to follow-up calls, mailings,special offers, and probing for refer-rals. Some limited ads may be appro-priate but should not take financialresources away from commission orbonus plans that encourage estima-tor/salespeople to tap the customerdatabase and referral sources for im-mediate new business. A shop at thispoint is not yet completely secure.Marketing resources can’t be wasted.Broad, long-term projects like a web-site and social media sites are neces-sary but should not take away fromdirectly focused job-mining efforts.

The well-established professionalshop is in a position to employ a widerrange of marketing efforts. A steadyflow of repeat customers and probablereferral sources like DRPs and dealer-ships ensure sufficient cash flow to af-ford name-recognition marketing. Alesser shop would be foolish to wastemoney on ads that do little more than


Development-Appropriate Marketing

On Creative Marketingwith Thomas Franklin

Tom Franklin has been a sales and marketing consultant for fifty years. He has writtennumerous books and provides marketing solutions and services for many businesses.He can be reached at (323) 871-6862 or at [email protected]. See Tom’s columns at www.autobodynews.com under Columnists > Franklin

keep the shop’s name in the publiceye, but at the professional level, it’spossible the owner is consideringopening other locations. At that pointname-recognition is essential. Thismight include radio and TV ads, spon-soring sports and other activities, andparticipating in professional groupslike the Chamber of Commerce.

The leadership shop markets it-self like any outstanding professionalshop, but takes it a step further. Theowner is likely to hold an officer po-sition in an autobody trade associationand be involved in making industryadvances through CIC meetings andother venues. This is not to say thatshop owners at earlier developmentstages shouldn’t participate in indus-try forums and activities. But the col-lision repair industry is highlycompetititve these days and market-ing is a very costly activity. Ad sales-people with expensive promotionalschemes are beating at the door all thetime. Until a shop is very well estab-lished, every marketing move mustproduce a real job coming in the door.When enough of those jobs are sure tocome, there will be plenty of time toplay with those expensive ads andpromotional schemes. But until that

happens, it would be wise to recog-nize what stage of development ashop has really reached and employmarketing resources appropriately.


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The Collision Repair EducationFoundation announced that its 12thannual industry fundraiser golf out-ing raised $70,000, a record highfor the event. The fundraiser was aday of golf at South Shore CountryClub in Hingham, MA. A new as-pect of the event, a helicopter golfball drop, raised $12,000 alone.Golf balls, sponsored by individu-als, were dropped from a helicopterabove a green. Closest to the pinwon a $1,000 American Expressgift card. The winning ball wassponsored by Gerber Collision &Glass president and COO TimO’Day, who graciously donatedthe prize back to the foundation.All funds will go toward support-ing scholarships and grants for col-lision schools and students.

Said Clark Plucinski, execu-tive director. “We would like tothank all of the attendees, sponsors,and specifically PPG AutomotiveRefinish for their co-hosting spon-sorship as this event has progressedfrom raising $19,000 in 2009 to$70,000 this year.”

Record Fundraiser for CREF


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The Society of Collision Repair Spe-cialists (SCRS) has issued a positionstatement regarding insurer mandates.It reads as follows:

In representation of collision re-pair businesses across the UnitedStates, The Society of Collision Re-pair Specialists (SCRS) takes excep-tion to business mandates thatproperty and casualty insurers imposeupon collision repair businesses; par-ticularly those that specify requiredvendors, business platforms or inter-nal processes that must be followed inorder to be included in, or avoid beingexcluded from, certain lines of work.As an example, insurer mandates sur-rounding parts procurement platformsmay inhibit independent collision re-pair businesses from utilizing partsvendors with whom they have an ex-isting relationship, providing insurerswith greater influence and controlover the parts supply chain. SCRS be-lieves this control falls outside of thescope of the insurance business. Someinsurers are stipulating agreement tothese terms, as a condition of beingrecognized in Direct Repair Programs(DRP). SCRS supports efforts that

rightfully seek to eliminate such in-trusion into the collision repair busi-ness, and enforcement of existinglaws, regulations and codes that cur-rently prohibit such actions. It is theopinion of SCRS that voluntary agree-ments cannot include stipulationswhich violate existing laws, rules andregulations.

SCRS believes that collisionbusinesses are capable of establishingsuccessful vendor relationships andinternal processes that will best ac-commodate the needs of the con-sumer, and that service providers willcontinue to respond to the market withincreasingly creative solutions thatdrive performance for their customersand the respective market entities. Webelieve that solutions with tangiblevalue propositions will be utilized andsupported by the marketplace withoutthe undue influence of insurer man-date.

The encouragement to embraceopen platforms to enhance perform-ance, rather than rely on exclusionaryprogram agreements influenced byone or more of the participants, fol-lows an acknowledgement from State

Farm Insurance that the nation’slargest carrier is transitioning from“piloting” the requirement to use thePartsTrader online part sourcing andordering program, in select market-places, to a tiered national rollout.State Farm had previously included aprovision in its Select Service Agree-ment requiring participating repairersto agree to utilize automated replace-ment parts locating services or appli-cations, as specified by the insurer, forordering and/or sourcing replacementparts.

According to SCRS, as the pro-gram rollout developed, so did therules of engagement surrounding it.The organization provided a brief run-down of the history of the program:

● In May of 2012, State Farm is-sued a video on its B2B website whereAuto Estimatics Consultant GeorgeAvery expressed:

“... repairers are in control of whoprovides your parts, regardless of thepart type. We have worked with Part-sTrader on a process that [enables]you to maintain your relationships andnegotiated deals with your vendors.We understand that relationships with

your suppliers are important in man-aging your business, much in the sameway we value our relationship withyou.”

● In an email distributed withinthe same month, PartsTrader commu-nicated to suppliers who had declinedthe offer to participate in the quotingprocess that:

“State Farm Select Service re-pairers will be placing all parts ordersrelated to State Farm claims via thePartsTrader application from [date].During our discussion you indicatedthat this was not in your interest toregister online with PartsTrader toparticipate in the intended parts pro-curement process. We respect yourchoice and want to make sure you arestill able to receive those State Farmorders. With that stated, it is not ourintent to come between the relation-ships you have built with the shops.This email is to confirm that we havenow modified your company’s con-figuration to be a ‘Fax Only Supplier.’This means that a repairer can placean order to your company in Part-sTrader, and we will send that order to

SCRS Issues Position Statement on Insurer Mandates

See SCRS Statement, Page 49

by Ed Attanasio

Tesla’s recent perfect 5-star safetyrating is unprecedented and the high-est in the history of automotive safetytesting. It took all the former num-bers and crushed them, when inde-pendent testing by the National

Highway Traffic Safety Administra-tion (NHTSA) awarded the TeslaModel S a five-star safety rating inevery subcategory without exception.Only one percent of all cars tested bythe federal government haveachieved five stars across the board.Furthermore, NHTSA does not justhand out top ratings, so these scoresare significant and have caught the

attention of other carmakers, thepress and the public, as well as colli-sion and mechanical repair shops thatwant to work on these elite vehicles.

Tesla Motors, Inc. is a Palo Alto,California-based company that de-signs, manufactures and sells electriccars and electric vehicle powertraincomponents. The Tesla Model S is thefirst premium sedan built from theground up as an electric vehicle. Thecompany sold 10,500 Model S sedansduring the first six months of 2013,and forecasts that they will be selling40,000 models annually by fourthquarter 2014.

Of all vehicles tested, includingevery major make and model ap-proved for sale in the United States,the Tesla Model S set a new record forthe lowest likelihood of injury to oc-cupants. While the Model S is a sedan,it also exceeded the safety score of allSUVs and minivans. This score takesinto account the probability of injuryfrom front, side, rear and rollover ac-cidents, according to a press releaserecently released by Tesla.

Now the $64,000 question outthere is—how can body shops get cer-

tified to work on these increasinglypopular and very safe cars? Tesla’sCommunications Manager ShannaHendriks recently addressed these in-

quiries about the manufacturer’s newlydeveloped certification program.

“Tesla has a dedicated repair andtraining program that interested bodyshops can go through to become rec-ognized as a Tesla Approved CollisionRepair Center. One of the things thatmakes the Model S unique is that thecar is made of aluminum, so bodyshops need to have aluminum-basedrepair abilities. Body shops can in-quire about the training program bysending an email to [email protected].”

Amato’s Auto Body is proud ofthe fact that they will soon be the onlyTesla-certified collision facility in theSan Diego area, according to Body

Shop Manager Perry An-derson. “It’s an exciting timefor Tesla, so we’re veryhappy to be involved,” he ex-plained. “These vehicles arebecoming more and morepopular and we’re seeingmore of them here in ourshop. Right now, we have sixTeslas that we’re workingon. It’s definitely a privilegeto be able to work on these

exceptional cars.”If other body shops are inquiring

about how to become Tesla-certified,they may have to wait for a while, An-derson said. “It’s invitation-only, fromwhat they’ve told us. Tesla is prettymuch in a position where they canpick and choose who they want work-ing on these cars. Tesla contacted usbecause we were already certified towork on a lot of other high-end luxuryvehicles, so they knew the learningcurve would not be daunting for us.We are factory-trained and certified to


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What Does Tesla’s Record-setting Safety Rating Say to the Collision Industry?

Arduous testing of the Tesla resulted in a5-star rating, the highest in the history ofautomotive safety testing

Amato’s Auto Body is proud of the fact that they willsoon be the only Tesla-certified collision facility in theSan Diego, CA area

work on six luxury brands, includingAston Martin. I think the people atTesla were attracted to us because ofour Aston Martin certification, be-cause both car makers use similar ma-terials and obviously some of therepair techniques are alike in someways. Both of them are made of alu-minum, so the bonding technologyused is very similar. With both, youneed special rivet guns and glue gunsand with aluminum, you have to havea clean room as well.

“The people from Tesla camehere and inspected our facility tomake sure we were capable of repair-ing these cars,” Anderson said. “Oncewe were onboard, we had to invest insome new equipment, including a Fro-nius welder, but the biggest thing hasbeen the training. Tesla wants us toknow these cars inside; be able tocompletely disassemble them and thenput them back together perfectly.”

By putting several of their shop’s 41technicians through the Tesla training,Amato’s now has a core group thatcan work on the cars, but the processis ongoing. “We have two techniciansthat have gone through the Tesla Fitand Finish class and now have 80hours under their belts,” Anderson

said. “Tesla just recently rolled outnew training this summer, so once wecomplete the rest of the training withinthe next few months, we’ll be offi-cially certified and havethe plaque on the wall.”

What does Andersonthink about Tesla’s recentsafety numbers? “I’m notsurprised,” he said. “Onecame into the shop oneday and it had obviouslybeen hit pretty seriously.The front end was cavedin and it was a total loss,but the woman walkedaway without a scratchand even the car doorsopened and closed per-fectly. All we said was‘wow.’ ”

Other interesting facts about theastounding safety ratings earned re-cently by Tesla include:

The Model S has the advantagein the front of not having a large gaso-line engine block, thus creating amuch longer crumple zone to absorba high speed impact. This is funda-mentally a force over distance prob-lem—the longer the crumple zone, themore time there is to slow down oc-

cupants at g-loads that do not cause in-juries. Just like jumping into a pool ofwater from a tall height, it is better tohave the pool be deep and not contain

rocks. The Model S motor is onlyabout a foot in diameter and ismounted close to the rear axle, and thefront section that would normally con-tain a gasoline engine is used for asecond trunk.

The rear crash testing was par-ticularly important, given the op-tional third row children’s seat. Forthis, Tesla factory installs a doublebumper if the third row seat is or-dered. This was needed in order to

protect against a highway speed im-pact in the rear with no permanentlydisabling injury to the third row oc-cupants. The third row is already thesafest location in the car for frontalor side injuries.

The Model S was also substan-tially better in rollover risk, with theother top vehicles being approxi-mately 50 percent worse. During test-ing at an independent facility, theModel S refused to turn over via thenormal methods and special meanswere needed to induce the car to roll.The reason for such a good outcomeis that the battery pack is mountedbelow the floor pan, providing a verylow center of gravity, which simulta-neously ensures exceptional handlingand safety.

In addition, the lithium-ion bat-tery in the Model S did not catch fireat any time before, during or after theNHTSA testing. It is worth mention-ing that no production Tesla lithium-ion battery has ever caught fire in theModel S or Roadster, despite severalhigh speed impacts. While this is sta-tistically unlikely to remain the caselong term, Tesla is unaware of anyModel S or Roadster occupant fatali-ties in any car ever.


A Tesla pictured with Founder Elon Musk

forcing implementation of PartsTraderin the State Farm Select Service shops,

2) Finding the Defendants inbreach of the 1963 Federal ConsentDecree (and thereby voiding the Se-lect Service agreements), and

3) Stopping the Defendants frominterfering in the relationship betweencustomer and shop by delaying serv-ice payments or otherwise limiting theuse of rentals.

The suit alleges that State Farm’simplementation of the PartsTradersystem tortiously interferes with priorbusiness relationships that collisionrepair facilities have with their longstanding parts suppliers. (Tortious in-terference occurs when a person in-tentionally damages the plaintiff’scontractual or other existing businessrelationships.)

In addition, the suit contends thatState Farm is attempting to force thePlaintiffs to breach their legal fiduci-ary (trustworthiness) duty to their cus-tomers, ie. compromising a safe andreliable repair. “The relationship be-tween consumer and repairman has

been all but destroyed. The repairmanmust do as instructed by the insurancecompany, not the consumer.”

Said attorney Eaves Jr., “Part-sTrader and State Farm will effectuatea ‘race to the bottom’ in quality andsafety.” And though he says the casevery likely will go to court, he is hop-ing for an out-of-court resolution.

“We would love for them not tobring it (the Parts Trader system) toMississippi. But it would be up tothem,” he said. Cheaper parts haveindeed been responsible for multipleinjuries, said Eaves Jr., who is a for-mer candidate for governor of Mis-sissippi.

“Nobody likes to be forced intofiling a lawsuit but this is the largestautomobile insurer in the country andwe have a lot of mutual customers thatwill be impacted by this,” said JohnMosely, president of MSCRA fromClinton Body Shop and a plaintiff inthe suit. “We have invested tons ofmoney in our business and State Farmtelling us we have to buy throughPartsTrader system, is not the bestthing for the repair or the customer.”

Mosely currently participates inthe Select Service program with StateFarm.

In addition to seeking an in-junction against implementation ofthe PartsTrader system, the suitseeks a declaratory judgment thatState Farm is operating against the1963 Consent Decree, entered intoby several insurance company asso-ciations and the Federal Govern-ment, limiting insurer’s activities incollision repair to influence cus-tomers. Because of this conflict, thesuit seeks to void the Select Serviceagreements between repair facilitiesand State Farm.

Finally, the suit seeks to keepState Farm from interfering in thecontract between the customer andbody shops by “causing or implyingdelay in service payments, appraisalor limitation on the usage of rental au-tomobiles.”

State Farm is requiring use ofPartsTrader for specified shops in itsSelect Service DRP but insists usingthe service is strictly voluntary be-cause membership in Select Service isvoluntary.

State Farm’s public affairs repre-sentative Roszell Gadson said, “Re-pairers participate in Select Service®

on a voluntary basis. Parts Trader is acompany that provides an electronic

parts ordering platform to repairersnationwide. State Farm guidelines forthe use of parts and part types have notchanged due to electronic parts order-ing. Estimates are written and parttypes are chosen by repairers based onconsistent guidelines,” said StateFarm’s public affairs representativeRoszell Gadson.

Barry Lewis of Ridgeland, MS,and owner of European Coachworks,says participating in the lawsuit wassimple common sense for his busi-ness.

“I’m just trying to cover us forthe future,” says Lewis, “becauseeventually it’s going to affect uswhether you’re in the program or not.”The “program” to which Lewis is re-ferring is also a company doing busi-ness as Parts Trader LLC, which wasnamed in the lawsuit as well. WhileParts Trader’s website states that therepairer has the final say in which partthey should use, the MCRA maintainsthat State Farm insists their insureddrivers receive the cheapest partsavailable in order to cut repair and re-placement costs.

State Farm neither confirmed nordenied whether parts purchased


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through the Parts Trader service wereinferior to those the repair shops claimto use.

“There are thousands of exam-ples where inferior parts led to injury,”Eaves Jr. said, citing his considerableexperience as a trial lawyer. “This

PartsTrader program is the first timethis has been implemented. Most ofthe cheaper parts will be made incountries where quality is not as im-portant,” he continued.

But State Farm says the suit iswithout merit and that the Parts Tradersystem is not yet a reality for Missis-sippi. Preventing it from being imple-mented in Mississippi is, of course,the point of the suit.

“State Farm recently received no-tice of a lawsuit in Hinds County, Mis-sissippi, related to our electronic partsordering initiative and our Select Serv-ice® program. We believe the suit iswithout merit. We intend to vigorouslydefend the suit,” said Roszell. “TheParts Trader program has not yet evenbeen implemented in Mississippi.”

MCRA President Mosley arguesthat parts ordered from off-shore sites

are not upheld to the same standardsof safety as are American-made parts.But the PartsTrader website states un-equivocally that it does not recom-mend specific parts or manufacturers.

“Collision parts suppliers provid-ing pricing within PartsTrader must benominated by repairers like you be-fore we invite them to participate inthis market,” says the PartsTraderwebsite.

Collision repairers and their representa-tives have come up with numerous differ-ent legal theories about why insurersshouldn’t be allowed to create networks.One of them is based on the now little-known Consent Decree.

In November 1963, the U.S. JusticeDepartment settled a class action suit thatit brought against the associations repre-senting some 265 insurance companies,which resulted in their officers signing a“Federal Antitrust Consent Order,” knownas the Consent Decree. A consent decreein general is a written agreement in whicha company or organization under investi-gation by a governmental agency agree to

do or not do something in the future – with-out admitting any past wrong-doing. In thiscase it settled the class action suit withouttrial. The signers, three insurance trade as-sociations and their members agreed toforever refrain from several practices, in-cluding setting prices and steering. Theyadmitted no wrongdoing but agreed toabide by its terms in perpetuity, meaningit’s still binding on its signatories today.

The DOJ filed an action against theassociations alleging that they had formu-lated an “Independent Appraisal Plan” in1947 “to depress and control automobilematerial damage repair cost.” The heart ofthe plan was a scheme to control the work

of independent appraisers who preparedestimates of repair costs and got bodyshops to agree to them. The Govern-ment’s case focused on an insurance in-dustry invention called the CombinedClaims Committee (CCC) which was es-tablished to control collision repair prices.Basically, each CCC member-insurer se-lected one favored appraiser or appraisalfirm in each market area, to the exclusionof others, to receive all of the participat-ing insurer’s adjusting work, as long asthis adjuster worked within the guidelinesthat the CCC established and controlled.

Under the plan, committees ap-pointed by the trade groups would spon-

sor individuals or partnerships to act asappraisers in assigned territories for all as-sociation members. In return for the in-surers’ agreement to use them exclusively,the appraisers would agree to depress andcontrol repair costs by arranging (whenpossible) for shops to agree to estimatesbefore they had examined the damagedvehicles, by “establish[ing] strict labortime allowances,” and by “obtain[ing] thelowest possible hourly labor rate.” TheDOJ alleged that the plan violated theSherman Act. In November 1963 (lessthan a week after John F. Kennedy’s as-sassination) the Government’s case was

The 1963 Federal Consent Decree (www.ican2000.com/documents/1963/)

See Consent Decree, Page 22

Continued from Page 18

Suit Against PartsTrader


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dismissed, pursuant to an agreed orderunder which the defendant associationswere enjoined from pursuing any programthat had the purpose or effect of “exercis-ing any control over the activities of anyappraiser.”

The Independent Appraisal Plan hasnever been revived, nor has any programor practice which favors chosen damageappraisers or excludes others.

In the words of Silvie Licitra, well-respected collision industry writer and acollision repairer at the time, resultant pay-offs and corruption were rampant becausethe selected appraiser fixed the labor rates,required arbitrary discounts on parts, andheld firm to the labor times published in aguide. These appraisers also had shopswith which they had unwritten agreementsthat their estimates would be accepted,sight unseen. “Those appraisers all hadtheir hands out and if you didn’t pay themoff, they’d write lousy estimates (creating)a take-it-or-leave-it situation, the shopbeing faced with losing the job if they did-n’t play ball (with insurers).”

Frank Stepanek, chairman of theNational Body Shop Committee of the In-dependent Garage Owners (IGO) of Amer-ica (precursor to the Automotive ServiceAssociation), was quoted in a November1963 industry publication: “It’s no longerlegal for many insurance companies to de-mand discounts, set the hourly rates, boy-cott repair shops [and] use specificappraisers.”

A number of trade associations weretargeted in the years following the signingof the Consent Decree. In March of 1964,Allstate Insurance Company filed suitagainst 109 members of the Central JerseyAuto Body Association (CJABA), chargingthem with antitrust violations, conspiracyand price fixing. In July of that year, a judgeordered the association members to sign aconsent decree of their own. The embit-tered members reluctantly settled with All-state, citing lack of funds to finance aprotracted legal battle with the company.

In support of the CJABA, an associa-tion of central New York body shop ownersset up a legal defense fund for the CJABA.

Their spokesman was quoted as saying:“It’s with deep regret that this spirit was notnationwide. I strongly urge every body shopor garageman who looks forward to free-dom in his business to alert himself andseek remedies that will maintain our rightsand freedoms in the industry.”

The legal wrangling went back andforth until the summer of 1967, when acongressional committee called for an in-vestigation into the auto insurance busi-ness. U.S. Sen. Philip Hart of Michiganproposed federal oversight of the indus-try and an amendment to the 1945 Mc-Carran-Ferguson Act as a way to curbinsurance domination of the collision re-pair industry. McCarran-Ferguson effec-tively shielded the insurance industryfrom federal antitrust laws by grantingstates the primary responsibility for regu-lating insurance. Sen. Warren Magnuson,chairman of the Senate Commerce Com-mittee, made additional calls for inves-tigative probes and even threatened tolaunch an independent investigation by aspecial counsel.

Between congressional pressuresand Transportation Secretary Don Boyd’sinsistence the matter be studied by his de-partment, the White House was promptedto step in. In a message to Congress inearly 1968, President Lyndon Johnsoncalled for a thorough investigation into theauto insurance business.

“The Consent Decree was like a Band-Aid,” said Dick Hogg, a suburban Philadel-phia body shop owner who remembered the‘63 action, as well as the business condi-tions that led to its signing. Hogg also re-members that its signing didn’t usher in agolden age for body shops. “It only gave ustemporary relief because like some otherlaws, there was no enforcement. The termsof the Consent Decree were diluted by thestate regulations that are, for the most part,unenforced. The insurance departmentsgive the benefit of the doubt to the insurers.”

Since insurance companies hedgedtheir bets with their chosen appraisal firm,they had control. No auto damage claimswere settled unless they passed through

The 1963 Federal Consent Decree (continued from p. 20)

See Consent Decree, Page 40

The car dealers don’t want other au-tomakers to follow Tesla’s lead, open-ing company-run stores that wouldcompete with franchisees.

“They feel threatened by this, asthey have when other companies havetried to do this in the past,” said JackNerad, editorial director and execu-tive analyst at Kelley Blue Book.“Dealers are part of a well-developedsupply chain, and they want to keep itthat way.”

To Tesla, the fight represents aclassic Silicon Valley story—an inno-vative startup disrupts an establishedindustry and faces resistance. The

dealer associations, Tesla executivessay, are trying to stifle change in astodgy marketplace that could use alittle shaking up.

“They go to the legislature andsay, ‘We need protection from inno-vation,’ “ O’Connell said. “There’s re-ally a fundamental question here:Should the government be prescribinga business model for automotives?Apply that argument, and we’d still beriding horses and delivering messagesby hand.”

To the dealer associations, directsales could destroy a franchise systemthat they say works for manufacturersand consumers alike, even if manybuyers don’t realize it.

Texas, for example, has autodealerships in 284 cities and towns,

according to the Texas AutomobileDealers Association. Of those, 163towns have fewer than 15,000 resi-dents. If the auto industry switched todirect sales, the car companies would-n’t maintain stores and service centersin the smaller communities, said theassociation’s president, Bill Wolters.

“The manufacturers would do ex-actly like the big-box stores have donewith all the other products—they wouldonly be in the metropolitan areas andbig cities,” Wolters said. “The franchisesystem provides a much broader net-work of dealers than you’d have if man-ufacturers controlled the outlets.”

The ability to sell cars in the hin-terlands was, in fact, one of the mainreasons the auto industry adopted thefranchise model. See more on p. 24.


Farm’s unwillingness to postpone atraining class (on how to process totallosses for State Farm) that the insurerwas requiring the shops to attend at atime when Holladay and his five tech-nicians were working 60- and 70-hourweeks repairing vehicles damaged ina recent hailstorm.

“All we asked from the very be-ginning was that we be allowed topostpone this (class) for a month ortwo until things kind of got workeddown after that hailstorm,” Holladaysaid. “We were all just at our max. Wewere told straight up, it was just, “No.”

He said he has not seen any sig-nificant change in the amount of StateFarm work the shop is doing. “I thinkit was a good decision,” Holladay said.

Gene Sneed, who along with hiswife Barbara, owns and operatesB&G Collision and B&G Paint &Body in Temple, also removed his twoshops from the Select Service pro-gram. This summer, he and abouteight other shops in the area beganjointly sponsoring newspaper ads urg-ing consumers to use the shop of theirchoice.

“They will promise you theworld in order to persuade you to goto one of their direct repair or networkshops,” one of the ads states about in-surers. “Don’t be steered wrong.”

—from CRASH Network(www.CRASHnetwork.com), Octo-ber 6, 2008.


Historical Snapshot

State Farm Insurance Company re-cently donated $70,000 to the Colli-sion Repair Education Foundation,pushing the company’s lifetime con-tributions to the foundation above $1million. The donation will help sup-port high school and technical col-lege school programs, students andteachers nationwide.

“State Farm’s support of colli-sion repair education is consistentwith our long-term commitment toeducation overall,” said Russ Hoff-bauer, State Farm claims director.“Collision repair education is veryimportant to State Farm and to ourcustomers. As technology in the au-tomotive industry changes rapidly, itis critical to have students enteringthe field and learning the latest repairmethods to be able to provide re-markable service to our customers.”

State Farm Donates $70K toCREF, Lifetime Over $1M


Tesla Motors Surges


Tesla has chosen to skip the middle-man and open its own dealerships tosell its pricey Model S electric car. Instates like Texas where manufacturer-owned dealerships are not allowed,prospective Tesla customers must resortto buying the car online.

StateImpact Texas explains thereason that law has not changed boilsdown to money and a powerful auto-motive dealership lobby which out-spent Tesla in Texas. According to theTesla Motors website, the nearest Tesladealership is in suburban Denver. Al-though you can't purchase a Tesla inTexas, you can have your Tesla serv-iced in Austin, Dallas, or Houston.

Tesla Motors fought legislativefranchise battles with dealers on a num-ber of fronts this year, but Texas be-came the only state in which the electricvehicle maker mounted a vigorouschallenge to existing franchise laws.Tesla lost its fight outright.

Gene Fondren, the late legislator,lobbyist and longtime head of the TexasAutomobile Dealers Association, iscredited with making Texas’ dealerfranchise statute among the toughest inthe nation. The statute’s ban on factory-

owned dealerships, to which Tesla wasseeking an exemption, is the strictest ofall the states, says Tesla CEO ElonMusk, referring to Fondren as a “reallytough dude.”

“He worded it six ways to Sunday.Like Green Eggs and Ham, you know,”Musk told Automotive News this year.“If you’re a manufacturer, you cannotsell it any which way, no matter what.You can’t sell it in a house, can’t sell itin a mouse, can’t sell it in a grouse. It’slike, OK, wow. You can’t sell it.”

Fondren stepped down from theTexas dealers association at the end of2003 at age 76. He died in 2010. Butthe staff he built has stayed.

“We get a lot of calls from other[dealer association] people saying,‘Send me the language for this part ofyour statute,’” said Bill Wolters, whosucceeded Fondren as association pres-ident in 2004.

Wolters credits Tom Blanton,COO of legislative affairs and a 33-yearassociation veteran, and KarenPhillips, executive vice president andgeneral counsel with 29 years at the as-sociation, with writing the frameworkof Texas’ franchise statute.

“They did a tremendous amountof work in the background, and thenGene would go get the bill passed,”said Wolters, who has been with the as-sociation for 31 years.

The part of the Texas statute thatblocked Tesla was created 15 years agowhen Ford Motor Co. launched a fac-tory-store initiative, the Ford RetailNetwork. Ford lost a subsequent chal-lenge to the Texas law.

The Virginia Automobile DealersAssociation modeled its language onfactory selling after the Texas statute,though it was modified to accommo-date some differences in Virginia, saidDon Hall, the association’s president.

“We’d look at what Texas wasdoing and then we’d tweak it this wayor that way,” Hall said. “But it was Fon-dren who got us the basic language andconcept and understanding.”

Hall recalls Fondren renting aWashington apartment when the TexasLegislature was in recess to help theNational Automobile Dealers Associa-tion with federal initiatives.

The Texas dealers associationdoesn’t have the influence in Texas itonce did, said Paul Burka, who has

covered Texas politics for TexasMonthly for more than 30 years.

“I just think the world haschanged, and that’s true of all thelobby,” Burka said. “More power haspassed to the politicians, and they con-trol the lawmaking. And the businesslobby doesn’t have the power it used to.That’s beyond the TADA.”

Wolters acknowledges the old-time lobbying days are over in Texas.But money still speaks in other ways.Burka said he wasn’t surprised whenTesla lost its face-off with Texas deal-ers.

“Because power follows money,and I think there just wasn’t enoughmoney behind the Tesla people,” Burkasaid. “They just didn’t have the heft tofight them.”

Tesla is expected to take anothercrack at the Texas statute in 2015, whenthe next general session of the Legisla-ture opens.

To have a chance at winning then,Tesla will have to spend time andmoney in the Texas capital and makecontributions, Burka said: “If they’regoing to survive, they’re going to haveto play the game.”

How Tesla Was Shut Out by Texas’ Franchise Laws

by Ed Attanasio

Government mandates for more fuelefficient and safer vehicles haveforced changes in the design and con-struction of all vehicles. The collisionindustry is changing faster than mostbody shops can keep up and stayingon the cutting-edge can be expensiveand time-consuming. And just as im-portantly, you may no longer be per-forming proper repairs on today’snewer models altogether, by either re-jecting new training, systems andequipment, according to Ray Zitzloff,the president of Car Bench America(CBA).

“The OEMs are reducing theweight of these new vehicles by inte-grating a variety of lighter multi-strength materials into their designs,”Zitzloff said. “High strength steel andaluminum will be common in all ve-hicles and they require different repairprocedures and equipment. Aluminumand MIG brazing, riveting and bond-ing, aluminum clean rooms with vac-uum systems are all required. If you’rea body shop owner, you already knowthis all too well, and acutely aware of

the fact that most of these new mate-rials can no longer be heated or pulledto fit. The removal and replacement ofsections of various types of materialsis required.”

CBA has introduced a full line ofequipment called Revolution from 3Mbench to 5.2M all sharing and using thesame universal hardware with state-of-the art laser measuring for virtually alllight trucks and cars sold in NorthAmerica To complement the Revolu-tion CBA has added a complete line ofproducts from Europe necessary to

meet the changing needs of the 21stcentury vehicle, including welders, alu-minum steel kits, plasma cutters, SPRguns, induction heaters, laser measur-ing etc., and more shops will settle for

making improper repairs onthe newer vehicles, becauseto do them right will requiremore training and more so-phisticated equipment, ac-cording to Zitzloff.

Zitzloff can see the futureof structural collision repairand the role his company willbe playing in this whole newapproach to fixing cars, hesaid. “Car Bench is the mostversatile, accurate, and cost-effective structural repairsystem in the world, withmore OEM approvals than

any other system,” Zitzloff explained.“We’ve all heard this statement: ‘Oncea vehicle has been damaged it willnever drive the same again,’ but CarBench can make that statement obso-lete. Vehicles are built on fixtures atthe factory to ensure structural dimen-sional accuracy and ease of assembly.Repairing them on fixtures has always

done the same thing, but that’s not theend of the story.”

When asked why Car BenchAmerica’s Universal fixture system isthe best way to repair today’s cars,Zitzloff is quick to respond. “First off,the Car Bench prototype equipment isused by more OEMs for designing andbuilding vehicles than any other sys-tems. The same prototype equipmentused by body shops is also used by theOEMs for performing repairs. Thismeans that the same cars that werebuilt using Car Bench are being re-paired by using the same equipment.When doing sectioning and replace-ment repairs, the tech is essentially re-building the vehicle.”

Zitzloff also praised other fea-tures of the Car Bench system. “Oursystems provide fast accurate LaserMeasuring (self leveling, no recali-bration, 1MM tolerance) for blue-printing, estimates from virtually anylift,” he said. “And they save time, be-cause they’re faster and provide moreaccurate repairs without re-measuring.For the finest structural repair systemin the world, Car Bench America isleading the way.”


Car Bench America Says Shops Not Ready to Repair Newest Cars

Car Bench America’s universal system is now availablefor use on Ford light trucks and cars. From left, Car BenchInternational Director of Marketing Lorenzo Manfredi; Sr.Engineer for Ford’s Paint and Technology Center JerryBonanni; President of Car Bench International SilvanoPietrelli and Car Bench America’s President Ray Zitzoloffunveiled the system


Two bills before the New York legis-lature seek to make insurance com-pany requirements to use specificvendors or process for parts or materi-als procurement illegal.

Assembly Bill 7234 (A7234), In-troduced by Sen. John DeFranciscoand titled ‘An act to amend the in-surance law, in relation to collisionand comprehensive coverage onmotor vehicles’ and Senate Bill 5786(S5786), also sponsored by Sen. De-Francisco, propose to amend Section1, Subsection (a) of Section 2610 ofthe New York insurance law generallyknown as the anti-steering section thatcurrently makes it illegal for an in-surer to require a specific repair shop.

The bills seek to ban insurancecompany requirements for collision re-pair parts and materials procurementprograms, clearly aimed to block Part-sTrader (see all cover stories this issue.)

AB 7234AB 7234 amends the insurance lawdirecting that no insurer providingcollision or comprehensive loss shallrequire a repair facility to use a spe-cific vendor or process for the pro-

curement of parts or other materialsnecessary for the repair of a motorvehicle. The proposed languagebelow for the subsection adds a pro-hibition against specifying vendorsor processes. The text in all capitalsincludes the proposed amendment.

(a) Whenever a motor vehiclecollision or comprehensive loss shallhave been suffered by an insured, noinsurer providing collision or compre-hensive coverage therefor shall re-quire that repairs be made to suchvehicle in a particular place or shop orby a particular concern, NOR RE-QUIRE A REPAIR FACILITY TOUSE A SPECIFIC VENDOR ORPROCESS FOR THE PROCURE-MENT OF PARTS OR OTHER MA-TERIALS NECESSARY FOR THEREPAIR OF A MOTOR VEHICLE.

SB 5786, introduced on June 14,prohibits insurers, providing collisionor comprehensive coverage of motorvehicles, from requiring repair shopsto use specific vendors or processesfor acquisition of vehicle repair partsand materials.

“These bills seek to clearly ad-dress within the insurance laws of

New York State that insurance com-pany requirements to use specific-vendors should be illegal,” said EdKizenberger, executive director ofthe New York State Automotive Col-lision Technicians (NYSACT).

“Requiring repair facilities to usean online marketplace to purchaseparts or materials based upon the low-est price could force millions of dol-lars of business to move outside NewYork State. Repairers should continueto source parts and materials fromvendors they know and trust to bestserve the interest of the consumers.”

Kizenberger said that his associ-ation supports efforts around the coun-try to eliminate insurer mandates.However, while insurers should un-derstand the potential impact mandat-ing specific vendors or processeswould have on a collision repairer’sefficiency when faced with multiplemandates, crafting legislation thatwould seek to make the mandates il-legal is the only way to assure an effi-cient market.

“Historically, when it comes tomandated products and processes, in-surance companies don’t see the im-

pact these requirements have on theindustry as a whole,” stated Kizen-berger. “When multiple insurers im-plement multiple requirements,everyone loses, and ultimately theconsumer is left footing the added costcreated by the insurance companiesthat engage in this practice.”The bills add a prohibition againstspecifying materials purchases, goingbeyond making the specification ofparts procurement processes illegal.

“We wanted to make sure that thebill would address future concerns forthe industry,” Kizenberger added.“There are already examples of insur-ance companies requiring repair facil-ities to use specific brands of paint inother parts of the world.”

The bills have been referred tothe Assembly and Senate’s respectiveinsurance committees.

NY Assembly and Senate Hear Bills to Make Insurance Co. Parts Mandates Illegal

See NY Bills Block Mandates, Page 8

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Bankston HondaLewisv i l le

800-344-8611972-219-0021

Dept. Hours: M-F 7-7; Sat 8-5www.bankstonhonda.com

Benson HondaSan Antonio

800-727-8705210-340-0831

Dept. Hours: M-F 8-5; Sat [email protected]

Cleo Bay HondaKi l leen

877-253-6229254-699-2478

Dept. Hours: M-F 7:30-6; Sat [email protected]

Fenton Honda of LongviewLongview

800-228-1910903-753-5921


Gillman HondaHouston

800-999-8309713-776-4834


Honda Cars of McKinneyMcKinney

800-786-9579972-569-4222


Honda of FriscoFr isco

866-442-2711972-731-3176

Dept. Hours: M-F 7-7; Sat 7:30-5:[email protected]

Honda of San MarcosSan Marcos

866-392-1313512-392-1313


Russell & Smith HondaHouston

800-833-0180713-663-4266


Wholesale Parts DirectAust in

800-234-4441512-458-2910Dept. Hours: M-F 8-6

[email protected]

Don Carlton HondaTulsa

800-722-2379918-622-9670

Dept. Hours: M-Sat [email protected]

Fowler HondaNorman

888-715-3197405-573-5719


Joe Marina HondaTulsa

800-722-0520918-491-0110


Superior HondaHarvey

800-943-4227504-368-5687

Dept. Hours: M-F 7-5:[email protected]

Walker HondaAlexandr ia

318-448-8255318-445-6677

Dept. Hours: M-F 7:30-5:[email protected]

Garcia HondaAlbuquerque

800-677-6632505-260-5002

Dept. Hours: M-F 7:30-6; Sat 8:[email protected]

AutoNation HondaChandler, AZ

800-765-1353480-285-2804

Dept. Hours: M-F 7-5:30; Sat [email protected]

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David McDavid AcuraAust in

800-575-3553512-401-5976


David McDavid AcuraPlano

972-964-6044Dept. Hours: M-F 7-7; Sat [email protected]

Gillman AcuraHouston

800-288-9180281-209-4214Dept. Hours: M-F 7-6

[email protected]

Mac Churchill AcuraFort Worth

888-824-9634817-806-0571


Sterling McCall AcuraHouston

713-596-2337713-596-2338

Dept. Hours: M-F 7:30-7; Sat 7:[email protected]

Don Carlton Acuraof TulsaTulsa

888-550-7278918-664-2300

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The SEMA Show annually features aNew Products Showcase to provideexhibitors with a designated displayto highlight new product debuts,yearly updates and the latest versionsof their best sellers. All of the prod-ucts entered into the New ProductShowcase are photographed and in-clude product details and key infor-mation on how to locate and contactexhibiting manufacturers. Buyers canobtain a wealth of product informa-tion that will be relevant well into2014 by taking advantage of the freescanners available. Provided via “FreeScanner Pickup” booths locatedaround the New Products Showcase,buyers can scan all of the productsthey are interested in, while examin-ing and researching additional prod-ucts exhibitors have to offer. There isno limit to the number of scans buyerscan conduct, and the information isgathered electronically, allowing forit to be retrieved or printed immedi-ately. With new exhibitor and productinformation in hand, buyers can con-centrate on making deals and spendmore time on the Show floor con-necting with existing partners andnew suppliers. More information isavailable at www.SEMAShow.com.

Best Way to Research NewProduct at SEMA Show

Caliber Collision Centers contin-ues its aggressive expansion withthe announcement today that it hasacquired Mattocks Brothers Auto-body in Denver, CO and opened anew location in Tustin, CA.

“Today’s opening of two newCaliber locations in Colorado andCalifornia reinforces our commit-ment to add centers that providethe operational consistency, cus-tomer focus and cost managementour clients require in today’s com-petitive insurance marketplace,”said Steve Grimshaw, CEO of Cal-iber Collision Centers.

Caliber Collision’s new 13,000square foot West Denver locationopened today at 4171 MorrisonDrive, Denver, CO. Caliber’s new16,000 square foot Tustin locationalso opened today at 5 Auto CenterDrive, Tustin, CA.

“Our new Denver and Tustincenters increases Caliber Colli-sion’s locations to 132 as wecontinue to restore our customersto the rhythm of their lives inColorado and California,” addedMark Sanders, Caliber Colli-sion Centers’ Chief OperatingOfficer.

Caliber Collision Opens TwoNew Locations in CO and CA

The Automotive Service Association(ASA) has provided independent re-pairers access to a web-based advo-cacy program at the federal and statelevels for a number of years. Afterresearching various online advocacyprograms, ASA has been working toremodel its legislative and regulatorywebsite, www.TakingTheHill .com.The new website is more user-friendly and designed to move infor-mation quickly to members and topolicymakers. ASA members are en-couraged to visit the newly designedsite and sign up for free legislativealerts. “With our Washington, D.C.,office on Capitol Hill looking out forrepairers, the industry looks to ASAfor grassroots advocacy and infor-mation. Redesigning this site is onemore step in the association’s com-mitment to provide members withthe tools they need to stay informedand be heard on Capitol Hill,” saidAngie Wilson, ASA’s vice presidentof marketing and communications.The TakingTheHill.com website re-design was donated by Autoshop So-lutions, the website design andInternet marketing agency that re-cently redesigned ASA’s main web-site, www.ASAshop.org.

ASA Launches New Website,Improves Repairer Tools

Automotive instructors are invitedto attend Inside AAPEX for Auto-motive Instructors on Wednesday,Nov. 6 and Thursday, Nov. 7 at theAutomotive Aftermarket ProductsExpo (AAPEX) in Las Vegas, Nev.Attendees will learn about newtechnology, meet with manufacturerproduct managers and trainers, andearn National Automotive Techni-cians Education Foundation(NATEF) credit hours. The programfeatures education sessions offeredas part of the AAPEX LearningForum that address new technologyand timely repair issues including“Direct Injection Update,” “WalletFlushing?” “New Exhaust Tech-nologies Including the New CleanDiesel,” “Wiring Diagram ColorCoding: A Tool for UnderstandingElectrical Circuits” and “TPMSSmart Maintenance and Repair.” Allof the sessions have been approvedby NATEF for continuing educationcredit hours. Each session is ac-credited for one hour. Attendancecertificates will be available at theconclusion of each session. Instruc-tors will have access to the AAPEXshow floor to view products andtalk with manufacturers.

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The cost of buying and operating acar varies from state to state and youmight be surprised to learn whichstate is the most expensive.

Driving in Georgia will take abite out of your pocketbook. A newsurvey by BankRate.com has foundthat Georgia is the most expensivestate in the U.S. to operate a motorvehicle, followed by California.Oregon is said to be the most af-fordable for those hitting the roadseveryday.

The cost of gas, insurance, re-pairs, taxes and fees are all factoredinto what it costs Georgia residentsan average of more than $4,000 pervehicle per year.

Residents of Oregon benefitfrom the lack of a state sales tax, lowauto insurance and the fact that theydrive 16-percent fewer miles thanthe national average. Those factorsland the state on the bottom of thelist at $2,204 annually.

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As an advocate of the ‘It Can Wait’movement, the National Auto BodyCouncil issued a call for its membersand others in the collision industryto join the nationwide effort to curbtexting and driving on Drive 4Pledges Day, September 19. Drive 4Pledges Day is a national day of ac-tion that aims to have every drivermake a personal commitment tonever text and drive and to also re-cruit others to do the same. TheNABC is urging drivers to make thepledge online at go-att.us/NABC, adedicated link created by AT&Tspecifically for the National AutoBody Council’s efforts. The cam-paign is a collaborative effort be-tween major wireless carriers AT&T,Verizon, Sprint and T-Mobile. Aspart of the nationwide Drive 4Pledges Day, NABC member com-panies will be implementing a vari-ety of promotional events to educateemployees and the public—particu-larly teens—about the dangers oftexting while driving. While textingis by far the biggest distraction onthe road, NABC notes that any dis-traction is dangerous, includingphone calls, reading e-mails, eating,changing CDs, fixing makeup, etc.

NABC Partners with ATT onAnti-Texting Campaign

According to the latest data from theU.S. Department of Labor Bureau ofLabor Statistics (BLS), the total pro-duction for the auto body repair in-dustry rose in June after declines inboth April and May. The total aver-age weekly production in June in-creased to 6.59 million man hours.The industry’s total production,which we define as the total averageweekly hours by month multiplied bythe total number of production andnon-supervisory workers employedeach month, closed June, 2013 at6.59 million man hours. This repre-sents an increase. from the 6.5 mil-lion man hours reported in May.Production hours in June 2013 stoodat 1.4 percent above 2012. The de-cline came chiefly from an increasein average hours worked each weekby production employees, up to 38.7hours in June from 37.4 hours inMay. The number of production andnon-supervisory employees actuallydeclined in June to 170,300 from173,800 in May. Added together, theaverage weekly production over thepast twelve months now totals 78.96million man hours. That is 3.5 per-cent higher than the 12 month total ayear ago.

BLS Says Collision IndustryProduction Rose in June

Daimler plans to start selling a self-driving car by 2020 to help its Mer-cedes-Benz brand regain the topspot among premium carmakers, de-velopment chief Thomas Webersaid. “We want to be the first tolaunch autonomous functions in pro-duction vehicles. You can be sure wewill accomplish that in this decade,”Weber said. Carmakers and suppli-ers are working on ways to makedriving safer and more comfortablethrough automation and the race ison to bring the technology to themass market. Daimler is focusing onso-called highly automated driving,in which cars master situations suchas cruising the highway or maneu-vering through traffic jams while thedriver relaxes. The car would recog-nize difficult situations such as deal-ing with traffic lights or urbandriving among pedestrians and cy-clists, and hand control back to thehuman behind the wheel. Daimler isnot alone in its ambitions. Nissan,for example, has also announcedplans to launch a car completelyguided by computers this decade.The technology was shown at theFrankfurt auto show, with produc-tion estimate to take 10 to 15 years.

Daimler to Sell Self-DrivingProduction Car by 2020

www.autobodynews.comCHECK IT OUT!



Starlite Coatings manufactures one of the finest lines of Automotive Refinishing Products on the market today. Our goal is to produce the best possible products at an affordable price, along with providing customer service that’s second to none. Over the past 25 years our Clearcoat, Primers, Activators, Binders, and Solvents have been used by tens of thousands Body Shop with excellent results. Our Life time Warranty gives peace of mind that you can trust.

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Sherwin-Williams Automotive Fin-ishes A-Plus™ Network and Vehi-cleOwnersGuide.com, an onlineprovider of blueprint documents thathelp collision repair shops identifyany missed revenues, are providingaccess to the provider’s OpenClaims Gateway™, a full featureclaims portal that includes claimsworkflow, dispatching, estimate re-view, vendor e-Coupons, consumertranslations and analytics. The newdispatching system is already popu-lated with the A-Plus Network’sleading collision repair facilities andwill provide a turnkey repair net-work for insurance companiesthroughout the U.S. and Canada.The Open Claims Gateway portalwill dispatch cars to A-Plus shops,and then these facilities and insur-ance companies can use the systemto manage the claims. “Open ClaimsGateway will be provided free ofcharge to A-Plus Network facilities,and there is no contract to sign. SaysTroy Neuerburg, Director of SalesExcellence at Sherwin-Williams Au-tomotive Finishes, “This system of-fers numerous benefits.” Forinformation call call 1-800-SWUL-TRA (1-800-798-5872).

The Opening General Session, spon-sored by Axalta Coating Systems,will now offer two concurrent ses-sions, one for Collision, one for Me-chanical, that will combine the bestcomponents of a keynote presenta-tion with the industry-specific focusof a forum. The forum’s headliningguest speaker will be Mike Ander-son. Admission to the new OpeningGeneral Session/Industry Forums areincluded in all registrations, and allattendees are invited to attend.

“Vastly different from pastyears, we’ve completely redesignedthe Opening General Session and at-tendees can expect a much differentexperience. Mike Anderson is ex-tremely well-respected, and atten-dees are going to want to hear hismessage,” says Dan Risley, ASApresident. “The format of this keyevent also aligns with our mission tocreate exceptional value for our au-dience and provide invaluable net-working opportunities for theindustry and by the industry.”

“Axalta Coating Systems is ho-noured to sponsor this year’s Open-ing General Session,” said MikeBennett, North America marketingdirector, Axalta Coating Systems.

ASRW’s New Format Will Be‘Vastly Different Experience’

Mitchell has announced the generalavailability of RepairCenter™ Rep-utation Manager. The new packageoffering combines real-time text andemail updates with advanced cus-tomer insights from satisfaction sur-veys and social media data toimprove the repair shop and vehicleowner processes. The tool shouldhelp increase repeat business and re-ferrals by providing actionable in-sight into the customer experience.By adding online customer satisfac-tion surveys and incorporating com-prehensive reporting and analyticstechnology, repair shops can betteridentify steps during the repairprocess that can be improved. “Cus-tomer retention and business growthgo hand-in-hand, but until recently,repair shops haven’t had the breadthof automated tools needed to im-prove upon the customer experi-ence,” said Anlin Sethi, SeniorManager of Product Management,Auto Physical Damage solutions.“By incorporating real-time interac-tion and engagement, alongside ro-bust survey analytics, ReputationManager allows repair shops to im-prove their reputation and buildstronger customer bases.”

Mitchell Announces its NewReputation Manager Package

ABRA Auto Body & Glass helpedto raise more than $30,000 duringthe first annual Bent Creek CharityGolf Tournament to benefit Help-ing Paws Inc. More than 100golfers and guests gathered at TheBent Creek Golf Course in EdenPrairie, MN, on August 12 to sup-port Helping Paws of Hopkins,MN, according to officials.

This inaugural golf event ispart of Helping Paws’ initiative toconnect the healing power of serv-ice dogs with disabled veterans suf-fering from Post Traumatic StressDisorder. The cost of raising andtraining a service dog is estimatedat $30,000. These canine compan-ions can help to transition returningveterans back to civilian life.

“We are absolutely thrilledand proud to partner with importantcharitable organizations like Help-ing Paws,” said Duane Rouse,president and CEO of ABRA. “Werecognize the amazing accomplish-ments of our military veterans whoserved with courage and their un-ending drive to make a differencefor our country. Supporting thesetraining dogs to help heal our he-roes is a privilege.”

ABRA Helps Raise $30,000for Veterans’ Service Dogs

Sherwin-Williams and OnlineBlueprint Provider Team Up

by Chasidy Rae Sisk

Anyone who has been involved withthe collision repair industry for anyamount of time knows how frustratingit can be when insurers refuse to paythe full amount billed for a repair.Many repairers count their losses andmove on to the next vehicle, butMark Schaech Jr., co-owner ofMark’s Body Shop in Baltimore, MD,refuses to take this insult lying down.While he and his partner, his father,would prefer to avoid the necessity oftaking legal action, he’s definitely“not taking it anymore!” Schaechknows this is a common problem thatshop owners face, so he’s glad to sharehis experience and advice with colli-sion repairers across the nation.

In May 2013, Schaech won hisfirst short-pay lawsuit against GEICOfor $392.95. Since then, Schaech wona case against State Farm when the in-surer filed a replevin lawsuit (replevinis a legal remedy for a person to re-cover goods unlawfully withheld fromhis or her possession) against him,claiming his charges for storage wereunreasonable and not competitive

within the market area. Mark’s BodyShop was holding a car while await-ing payment, but when State Farm set-tled with the car’s owner and tooktitle, they refused to pay Schaech. Therepair contract was the deciding fac-

tor in Schaech’s victory, playing ahuge role “like it does in any othercase,” according to Schaech, whoadded that “it is so important that yourdocuments are in line.” In addition tobeing paid the full amount owed,Schaech was also reimbursed for hisattorney’s fees. He feels the victorywas very important since a loss wouldhave given State Farm, and possiblyother insurers, precedent for refusal topay on total losses.

Schaech credits the CCRE (Coali-tion for Collision Repair Excellence)for his knowledge of such legal actions,noting that “the first time I heard of ashop taking control of their businesswas at a CCRE meeting.” He followedthat up by hiring an industry consult-ant, Barrett Smith, of Auto DamageExperts and a good Maryland attorney,Anthony DiPaula to support his ef-forts to take control of his own busi-ness. He is also grateful to all of the“attorneys fighting a successful fight.”His next case involved an assignmentof proceeds, ammunition he obtainedfrom industry lawyer Erica Evers-man, but it doesn’t stop there! Schaechis currently pursuing numerous law-suits, including one involving an olderclaim of two short-pays from GEICOand a similar suit against State Farm.

The lawsuits that Schaech is cur-rently pursuing are older claims sincehe has not had any recent problemswith GEICO, which he attributes tohis successful case in May. Most in-surers are paying his operation costs,though labor rates with insurers refus-ing to pay his full labor rate continueto be a problem. The one exception he

notes is State Farm who always leavesa short-pay, but for now, the customersare paying the difference. Schaech isnot taking any additional assignmentsof proceeds at this time as he has sev-eral in progress.

Schaech notes, “I would say that90% of the time, insurers in our marketrefuse to reimburse our customer fortheir entire repair bill. These short paysare for reasonable and necessary ratesand procedures required to repair ourcustomers’ vehicles to pre-loss condi-tion to the best of human ability. Itseems that the larger the carrier, theworse the behavior. It seems like asopposed to fairly paying claims, thesecarriers would prefer to spend thosedollars on advertising campaigns.”

Regarding what may cause him tohesitate before filing a lawsuit, Schaechadmits that it can be expensive andtime-consuming to sue an insurancecarrier, especially when the short-paysare small amounts, but one way to com-bat that is to pile several claims into onecase, making it more efficient. His ul-timate goal is to handle these cases onhis own; as he attends the trials, he iseducating himself via his attorney in


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MD Shop Owners Prevail Against Short Pays—No DRP, No Problem

Mark Schaech Sr. with his son Mark, Jr.

hopes of being able to handle futuresuits in small claims court on his own.“All I will have to spend is time whichI’m more than willing to do in order toensure my customers are being takencare of,” Schaech notes.

The short-pay lawsuit in Maywas the first that Schaech actually pur-sued to trial. Because these types ofcases are new to the Maryland courtsystem, “it takes a bit of educating thecourts that we are contracted by ourcustomers to provide a proper and saferepair and do not have any contractwith any insurance companies. Butthe misconception is that, because theinsurance company is paying the bill,they have a right to inject themselvesinto the repair process when this issimply not the case. Because we arethe experts, we carry all of the liabil-ity associated with the repair. We arethe ones who have to provide a war-ranty to our customers and stand be-hind the repairs. We are the ones whoknow our cost of doing business.Therefore, only a shop can know whatto charge for a given repair. The dutyof the insurance company, by contract,is to make the customer whole, not tocontrol the price or dictate the repairmethodology, all while not sharing in

the liability for those repairs.”Though most insurance compa-

nies insist that they don’t pay for cer-tain operations or that a shop isovercharging, Schaech insists, “thecollision repair community knows thatthese are word tracks that insuranceadjusters have been trained to use foryears, and in most cases, these carri-ers do pay for that, and the shops thatare asking to be compensated are notthe only ones asking for these opera-tions and rates.”

Schaech was happy when thejudge ruled in his favor: “It felt goodthat the Judge got it. I also feel confi-dent that the courts will continue to findin our favor as courts are in many otherstates all over the country. It takes aclose look at the law and the insurancepolicies to realize that determining thecost of repairs and the repair methodol-ogy is not the business of insurance. Inmany policies, the insurance companyhas the option to take the customer’s ve-hicle and repair it themselves, but ifthey chose that option, they would haveto accept all of the liability that goesalong with the repair which is why theydo not select that option.”

As a proud member of CCRE andSCRS, Schaech strongly encourages

other collision repair experts to stand upfor their rights. “I would encourageother shop owners to know their statelaws and get a good attorney to workwith. There are many shop ownersacross the country who have beenforced to go legal, and these repairershave been an inspiration and have al-ways made time to answer my questionsand lend advice. There is unbelievablesupport available to those who want tolearn.” Schaech’s desire to become moreinvolved has also led him to become in-volved with the Washington Metropoli-tan Auto Body Association (WMABA)where he sits on the Board of Directors.

Schaech also assures other shopowners that the trial itself was not verydifficult. “It was easy for us to explainwho the expert repair professional isand who decides what the Final Billshould be, and the judge agreed thatbecause GEICO doesn’t know ourcosts, they cannot possibly determinewhat we are able to charge.”

It is also important to note thatSchaech’s lawsuit has not really af-fected his relationship with GEICO orany other insurers. His problem isn’twith the individuals that he deals withbut the company’s policies on han-dling claims.

Schaech also takes issue with hisstate’s laws regarding insurance com-panies breaching contracts and howthis affects consumers’ rights.

“If a Maryland Insurance Com-pany breaches their contract with thepolicy holder, and the consumer wantsto hold them accountable in a court oflaw, the consumer is not able to recoverattorney’s fees in our state. This reallyinhibits consumers from taking action,even when it is obvious that they are inthe right… I wish the carrier wouldspend some of those billions of dollarsthey spend on marketing to properlycompensate consumers for quality andsafe repairs. I see a lot of poor repairsthat have been completed in shops whowere not properly compensated for re-pairs, and this is a consumer problem,especially as it relates to consumers’safety and the value of their vehicles.”

When asked what measuresshould be enforced to prevent the ne-cessity of short-pay lawsuits, Schaechnotes, “If insurers would get back tothe business of insurance, selling poli-cies and paying claims, and stay out ofthe collision business, we would nothave to go this route. The reality isthat, by law, consumers have the right


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More details on rating system.Vendors and shops using PartsTraderrate one another using a feedback sys-tem. Shops answer five questions torate a supplier based on parts and serv-ice quality; vendors answer four ques-tions to rate shops in terms of paymentpractices, return rates, etc.

Sailer said users of the systemcan expect to spend about one minuteper day responding to feedback ratingquestions about companies withwhich they have conducted partstransactions. Participating in theanonymous feedback rating system ismandatory, he said, because a ratinggiven to a vendor by a shop, for ex-ample, is weighted based on howmuch business that shop does withthat vendor.

“If you represent 50 percent ofsomebody’s business, your feedbackhas to be worth 50 percent of their rat-ings,” Sailer said. “So as a supplier, ifa shop has only ordered from youonce, and he didn’t like you andtrashes you in the feedback, that’sonly one piece of feedback. He can’t

be 50 percent of your feedback be-cause he’s not that relevant to yourbusiness.”

Feedback is not required on everypurchase, however, and the number ofsurveys a shop or vendor must com-plete may vary day-to-day but shouldtake an average of about five minutesa week, Sailer said.

Users can request to providefeedback on a transaction even if notasked, he said.

Only a company’s star-based rat-ing is visible to users of the system,Sailer said, but any additional com-ments that are made about a shop orvendor are batched and sent to thatshop or vendor.

Bad ratings cannot be challenged,he said, but someone giving you a badreview isn’t likely to continue to dobusiness with you, so the reviewwon’t be weighted as heavily in youroverall rating as feedback from thosedoing more business with you.

Customers don’t have to wait.Select Service shops don’t have towait the half-hour to receive quotes ifa customer wants an estimate rightaway, State Farm’s George Avery said.

“There’s no problem with writingyour estimate like you do today and

giving it to them,” he said. “In theevent you’re awarded the job, you cantake that estimate and do your directbuy, or you may choose to put it outfor some quotes. But we certainly un-derstand there are times when a cus-tomer just wants an estimate.”

Buying from non-participatingvendors. Occasionally, Avery acknowl-edged, a shop may need to use a partsvendor who is not on PartsTrader, suchas when an uncommon custom wheelor flare is needed.

“If it’s a guy down the street whoyou buy from once or twice a year,just an odd part, you’re more thanwelcome to buy that part from him,”Avery said.

Because that part will be shownas not having gone through the sys-tem, it will be flagged as an order notin compliance with Select Serviceguidelines, Avery said, but local man-agement will have leeway to decidehow far from 100 percent complianceis acceptable for shops on the pro-gram.

Getting vendors on the system.The only way a vendor can partici-pate in PartsTrader is if they are“nominated” by a shop using the sys-tem. Avery said during the initial test-

ing of the system in five markets, ashop complained that a vendor fromFlorida – where PartsTrader hasn’tbeen rolled-out – showed up on thesystem. Avery reiterated that onlyshops – not State Farm nor Part-sTrader – control which vendors areon the system.

“It turns out a repairer (on thesystem in another state) had a rela-tionship with that vendor in Florida,”Avery said.

If a shop nominates a vendor,then is unhappy with that vendor, canthe nomination be rescinded? Sailersaid no.

“Two reasons: First, the odds arepretty darn good that someone elsenominated them as well,” Sailer said.“And let’s say no one else did, butsomebody else started using them.The last thing I’m going to do is say tomy users, ‘Well, because Joe doesn’twant to do business with that vendor,you can’t do business with them ei-ther.’ We’re not going to take awayyour choice if they’re already onthere. But no one will make you dobusiness with them.”

Not part of a Select Servicereduction. Some shops in several


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markets have dropped out of the Se-lect Service program rather than usePartsTrader. But Avery said the pro-gram is not part of any plan to re-duce the number of shops on theprogram or shift work toward largeMSOs.

“That could happen, but this isnot an effort to drive the number ofSelect Service repairers we have,”Avery said.

He also noted that more than 50percent of Select Service shops are in-dependent single-location businesses,a higher percentage than any otherlarge insurer’s program.

“That’s not a signal to me thatI’m trying to dump the independents,”Avery said. “They are great businesspartners.”

Lawsuit filed. PartsTrader hasn’trolled into Mississippi yet, but repair-ers and parts vendors there have al-ready filed suit in an effort to preventshops from having to use it. The Mis-sissippi Collision Repair Associationand more than two dozen body shops,dealers and other parts suppliers al-

lege in the suit, filed in Hinds CountyChancery Court, that State Farm’s im-plementation of PartsTrader tortiouslyinterferes with existing business rela-tionships that shops have with theirparts vendors.

In addition to an injunction halt-ing State Farm’s implementation ofPartsTrader, the suit seeks a rulingthat State Farm is violating the termsof the 1963 Consent Decree, whichplaced limits on more than 260 in-surer’s activities related to auto in-surance and claims. The suit alsoseeks to prevent State Farm from in-terfering in the relationship betweena shop and its customers by delayingpayments or appraisals, or by placinglimitations on the use of rental vehi-cles.

State Farm said the case is with-out merit and that it will vigorouslydefend against it. See related story thisissue.

John Yoswick, a freelance writerbased in Portland, Oregon, who has beenwriting about the automotive industrysince 1988, is also the editor of theweekly CRASH Network (for a free 4-week trial subscription, visit www.Crash-Network.com). He can be contacted byemail at jyoswick@ SpiritOne.com.


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More on PartsTraderThe Plan’s sieve, and as you might ex-pect, the dollars that passed throughwere only those deemed allowable by theinsurance industry at large. The typicallabor rate for collision repair was be-tween $5 and $6 per hour.

Essentially, the selected appraiserfixed the labor rates, required arbitrarydiscounts on parts and held firm to thelabor times published in a guide. In addi-tion, the appraiser had shops with whichone had unwritten agreements to accepttheir estimates sight unseen. Accordingto Silvie Licitra, a well-known collision in-dustry writer whose experience datesfrom that era, payoffs and corruptionwere rampant at that time.

“It was a real crazy business backthen,” wroteLicitra. “Those appraisers allhad their hands out, and they were takingmoney like crazy. If you didn’t pay themoff, they’d write lousy estimates. It was atake it or leave it situation because abody shop was faced with losing the jobif they didn’t play ball.”

In question, however, is the specificityof the Consent Decree to individual insur-

ance companies today. The Decree wassigned by representatives of the three majorinsurance associations at the time: Associ-ation of Casualty and Surety Companies(ACSC); American Mutual Insurance Al-liance (AMIA); and National Association ofMutual Casualty Companies (NAMCC), allof which are now defunct.

Also, despite their seniority in busi-ness the majority of the dominant compa-nies today are not on the list of signatoriesso represented. State Farm (1922), Farm-ers (1928) and GEICO (1936) do not, forexample, appear on the list of companiesrepresented.

In addition, communication fromthe DOJ’s Antitrust Division claims thatthe consent decree cannot be enforcedagainst individual insurance companies,since the companies themselves werenot signatories to the decree.

Read the 1963 Consent Decreeht tp : / /www. ican2000.com/docu-ments/1963/

Content herein draws upon articlespublished by Charlie Barone and JohnYoswick.

The 1963 Federal Consent Decree (from p. 22)



Snapshot of Industry

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It wasn’t so long ago that all shopswere created equal. If you had tools,four walls and a sign, you could be abody shop. Actually, I should remove“four walls” from the list; there weremany “shops” repairing cars that did-n’t have one wall, let alone four.

At any rate, the qualifications torepair a car didn’t include specialequipment or training. Starting a bodyshop business required not much morethan proclaiming that you were a bodyman.

At that time, thankfully, direct re-pair programs were virtually non-ex-istent. I can’t imagine what we wouldhave done during that time period ifdirect repair programs were prevalent.How would an insurance companyidentify which shops to refer their cus-tomers to?

Even though shops have evolvedsignificantly since that time, the samedilemma exists for insurance compa-nies today: Which shops do we refer

our customers to? Without having theintimate knowledge of your shop oryour competitors, finding the mostqualified shops in a market is as aboutas easy as developing a national healthcare plan.

Why does an insurance companycare where their insureds have the ve-hicles fixed? There are a lot of rea-sons. The cost of the repair is amotivating factor in finding the rightshop, although it no longer is the mostimportant. Back in the early 1980s

when there were more than 70,000shops in the United States, price wasthe biggest concern. Customer servicewasn’t even on our radar. The qualityof the repair was assumed to be nobetter or worse at one shop than at an-

other down the street. In fact,the biggest concern I hadwith a shop was determiningwhether or not the dog inback lot was chained up so Icould write my estimate.Everyone was assumed to beable to perform a proper re-pair.

For the younger generationreading this, it’s probably dif-ficult for you to understand

what I’m talking about. To put it inproper perspective, some shops wouldneed to wet down the dirt floor beforepainting a car. It wasn’t uncommon tosee shops pulling full-frame vehicleswith anything that was stationary.And one of my personal favorites was

watching the old-time body men use atorch. A torch in the late 1970s andearly 1980s was about as useful asduct tape.

The industry has changed dramat-ically over the past few decades and theunprofessional, uneducated shop ownerhas been replaced. Professional, edu-cated and astute operators have takenthe industry to the next level.

Now customer service is reli-giously the topic of conversation. In-surance executives are facing increasedscrutiny and pressure to improve cus-tomer service scores. Policyholder re-tention is the lowest the industry hasseen. Insurance has become a com-modity where price is the single mostmotivating factor to consumers. Thereare intense battles happening betweenthe Top 10 carriers for policyholders,as evidenced by the marketing dollarsbeing spent.

Ironically, our biggest challengeisn’t finding new customers; it’s keep-


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Eliminating the “Have Not” Shops Will Help the “Haves”

with The Insurance InsiderInside Insurance

The Insider is a corporate-level executive with a Top 10 auto insurerin the U.S.. Got a comment or question you’d like to see him addressin a future column? Email him at [email protected]

to choose the body shop that they feelwill do the best job, and by contract,the insurance company is supposed toindemnify the policy holder whenthere is a loss. So, I say ‘just pay thebill Mr. Insurance Company.’”

In 1975, Schaech’s father openedMark’s Body Shop in a two-baygarage. After six years of refinishingcars through high school and college,Schaech managed the family businessfrom 1999–2002 when they movedinto their current 17,000 square footfacility. At that point, Schaech Jr. be-came his father’s partner.

Though Mark’s Body Shop re-pairs approximately 1000 cars annu-ally, grossing around $3 million insales, they do not participate in anyDRPs, but that wasn’t always thecase. “There was a time when we par-ticipated in as many as five DRP pro-grams, but over the years, theseprograms developed into bargainbasement repair programs. We wereasked to use more aftermarket andjunk yard parts which we find to be alower quality alternative to new OEM

parts. We were instructed to utilize re-manufactured wheel and junkyardsuspension components which we be-lieve to put our customers in harm’sway. Finally, we were asked to workso cheaply that it became difficult toinvest in new equipment and trainingwhich is imperative to repair today’smodern vehicles.”

To shops that are currently facingdifficulties obtaining full payment on re-pairs, Schaech offers the following ad-vice: “There are numerous organizationsand individuals in our industry who re-ally care about consumers and repair fa-cilities. These leaders are only a phonecall or email way and willing to providesound advice when a shop owner or con-sumer needs some sound advice.”

“The reality is not all shops arethe same; we all have different costs,different levels of quality, differentequipment and training, different cer-tifications, and different fixed costs. Itjust doesn’t make sense that we can allwork for the same price.”

Mark’s Body Shop4025 Mortimer Ave.Baltimore, MD 21215410-358-5155www.marksbodyshop.com

ing the ones we have. Retention is di-rectly correlated to customer service.Unfortunately, the collision repair fa-cility and insurance company typi-cally share a common fate relative tocustomer service. If the customer likesthe shop, more often than not, the cus-tomer will like the insurance com-pany. Conversely, if they don’t likeyou, they don’t like us. Thus, the im-portance to us of finding the rightshop to repair our insureds’ vehicles.

Repairing vehicles today poses asignificant challenge to the collisionrepair industry as well as the insur-ance industry. Collision repair shopsneed to make significant investmentsin training to remain current with thelatest technology and repair method-ologies. We recognize that this is crit-ically important to a safe and properrepair. There are still over 40,000shops in the U.S. How do we find theshops that are the best trained andhave invested in their people?

The new and specialty equipmentrequired to properly repair many oftoday’s vehicle should help foster areduction in the number of shops inthe industry. The days of opening up ashop with a tool box and a sign infront of the building are a distant

“bad” memory. The challenge is elim-inating those shops from the market-place. We don’t want our insureds’vehicles in shops that are ill-equipped.

Collision repair shops need towork closely with insurance compa-nies and state and national regulatorsto eliminate the “haves” from the“have-nots.” Those that have theequipment and training must survivewhile those that “have-not” shouldnot. The insurance industry can’t dothis alone. We need help identifyingthe “haves.”

The industry continues to evolveand the upper class of the industry isgrowing exponentially. The middleand lower tier shops are shrinking. Itwould be our desire to increase thepace of this, with the thought that thesurviving shops would be bettertrained and equipped. The sooner weeliminate the “have-nots,” the betterit will be for everyone in the indus-try.

The Insider is a corporate-levelexecutive with a Top 10 auto insurerin the U.S.. Got a comment or ques-tion you’d like to see him address in afuture column? Email him at [email protected].


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MD Short Pays

Even thought the Internet is continu-ing to explode and cable TV advertis-ing is flourishing, radio is still aliveand well and more body shops areusing it, according to people whoknow—such as: advertising agencies,media buying companies radio sta-tions and body shops themselves.

According to Kantar Media,there are nearly 5,000 AM stations androughly 9,000 FM stations in thiscountry and last year radio advertisingdollars increased by 8 percent at thenational level and 3 percent locally.While the collision industry is alwayslooking for new forms of advertisingand marketing, the word out on thestreet is that good old broadcast radiois still a viable form for body shops,both MSOs and independents.

Phil D’Angelo is a sales managerfor three radio stations in northernCalifornia (KUIC, KKIQ and KKDV)and has seen how radio advertisinghas worked well for body shops in his

regions. “We currently have five bodyshops advertising on KUIC in Vacav-ille, CA, and they’re happy with theresults,” D’Angelo said.

“Radio is more popular now, be-cause it offers so many options forcompanies of all sizes. For regionalcompanies, you’re going to get morebang for your buck with radio, as op-posed to other forms of advertising ormarketing. People wake up in themorning with the radio; drive to workwith the radio and listen to the radioall day at work, so radio travels every-where and some people listen to it8–10 hours and more every day. Also,we’ve discovered that the Internet andbroadcast radio work hand-in-hand,because radio creates demand and theInternet fulfills that demand. If theyhear you on the radio and then see youonline, there’s a good chance you’llget them as a customer.”D’Angelo had to learn the collisiongame in order to better serve his body

shop clients, he explained. “When westarted working with body shops, wediscovered that their business modelis unique, because from what they’vetold us, 80% of all the work comesthrough the insurance companies. So,the advertising we’ve designed forthem conveys a specific message, butbranding is also a big part of it. Wewant the body shop’s name to be inthe listener’s head.

In the radio business, we call itthe consumer’s ‘top-of-mind aware-ness,’ and it’s very important in thecollision repair industry, because get-ting your car fixed is not an impulsebuy. So, when people do get in an ac-cident, they’ve already heard theshop’s name over and over on one ofour stations and that’s who they willmention it to their insurance agent.”

Chuck Jessen is the owner ofPreFab Ads in San Francisco, a com-pany that licenses professionally-pro-duced TV spots to body shops on an

exclusive-by-market basis. Thesecommercials have appeared on 260local television markets throughoutthe country and several have won in-ternational advertising awards andhave been featured on such nationalTV programs as “Reel TV” and“World’s Funniest.”

Jessen is currently producing aseries of radio ads to add to his menuof offerings, because his clients areasking more and more for 30 and 60-second spots they want to air on localstations. “Some body shops areswitching from TV to radio, so thatthey can target their customers morespecifically,” Jessen said.

“In the bigger markets, the costof TV advertising is prohibitive formany independent body shops withmodest advertising budgets. If you’repaying to advertise to a certain marketand a large majority of it is out of yourarea, it doesn’t make sense for any re-gional business to advertise outside


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Is Radio Advertising a Sound Decision For Body Shops?

with Ed Attanasio

Social Media for Shops

Ed Attanasio is an automotive journalist based inSan Francisco, California. He can be reached [email protected].

that area. With radio, body shops canget more saturation and coverage insmaller to mid-size markets, so it’sideal for body shops that draw cus-tomers from no more than 10 milesaway.”

Radio has a captive audience andJessen knows from his 30 years of ex-perience what types of radio ads willwork in any market, he said. “Peopleare in their cars a lot and commutersaren’t going away any time soon.We’re producing several differenttypes of radio ad, including humorousand instructional. With our TV ads, wealready know humor works and com-munity service type themes are alwayswell-suited for the collision industry.We produced a radio ad that conveysan anti-texting message and it getsgood reviews, because it’s a warm andfuzzy type of ad that listeners will finduseful.”

Sharon Wicks is the president ofSilicon Valley Media Consulting inSan Jose, CA and has seen a recentspike in her clients’ interest in buyingmore radio advertising time, she said.“Radio is thriving, because it justmakes sense for regional businessesthat can’t afford a heavy television ad-vertising schedule. Radio has gone

full circle and now it’s back in a bigway, especially for companies thatvalue a highly targeted approach.”

Wicks has seen more and more ofher clients asking about Pandora In-ternet Radio, an automated music rec-ommendation service that playsmusical selections of a certain genrebased on the user’s artist selections.The user then provides positive ornegative feedback for songs chosen bythe service, which are taken into ac-count when Pandora selects futuresongs.

“Advertisers like Pandora, be-cause it is more targeted than conven-tional radio,” Wicks said. “Pandorahas specific demographic informationabout every one of its users, so you’regetting exactly who you want to reach.When your ad runs, it appears in apop-up banner-type ad with audio thatcan be either 15 or 30 seconds inlength. Either way, it’s less invasivethan a 60-second radio ad and ofcourse, it’s paired with a visual, whichgives it more impact.”

Rich Villanueva is the marketingmanager at Michael J’s Body Shop,Inc., with three very busy locations inSan Jose, CA. After much planningand research, Villanueva decided that

radio was the best plan for this bur-geoning regional MSO, for severalreasons.

“We found a local FM station(KEZR) that offered a package wewere very comfortable with, so wehired an advertising agency (Kilburg& Associates) that does ads for theSan Jose Sharks NHL hockey team,”Villanueva said. “We decided to gowith humorous ads and almost imme-diately we received a lot of positivefeedback. We’re basically doingbranding with these radio spots, ratherthan doing promotions. Since this isour first radio schedule, we want toget the name out there and connect thedots with our audience.”

Michael J’s had their agency pro-duce seven different ads to run in ro-tation on KEZR and is now going tocreate more ads to leverage the factthat one of their owners is a woman.“We’re targeting women with thesenew commercials, because they repre-sent a large portion of our customerbase,” Villanueva said. “Jamie Ryan isone of our co-owners and she’s a greatspokesperson for what we’re trying todo. In these ads, we position her as anexpert and an advocate, especially forour female market. The message is we

will treat our customers well from be-ginning to end, by providing themwith a stress-free, non-threatening en-vironment when they bring their car toMichael J’s.”


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Airbag Solutions recently released anew Supplemental Restraints Sys-tems (SRS) estimating checklist de-signed to allow damage appraisersto more easily identify each of thecomponents required to remain incompliance with OEM service re-quirements surrounding restraintsystems. The free SRS servicechecklist is available online as a fill-in PDF or as a printed download.Douglas Gan, COO of Airbag Solu-tions, said this brings the companyone step closer to its goal of offeringa standardized, one-step source forcritical OEM requirements to thecollision industry. “With the use ofthis checklist [and our database], ap-praisers are now able to addresseach of the critical questions neededto ensure a proper and timely repair.Knowing the answers to SRS relatedquestions before the repair hasbegun will help to eliminate supple-ments, reduce cycle times and fol-low OEM procedures.”

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Three years after an emotional run atIndianapolis Motor Speedway, Indy-Car Series star Dario Franchitti hasbeen selected by The Henry Ford toonce again drive one of Jim Clark’smost famous race vehicles in the 2013edition of the Goodwood Revival inEngland, September 13-15.

The popular Scottish driver andthree-time Indianapolis 500 winner,was previously chosen to drive thishistoric car in 2010 when it returnedto the Indy track for the first timesince Clark drove the car to victorythere in 1965.That victory, the first fora rear-engine car, and the first Indywin for Ford Motor Company, helpedchanged the sport of IndyCar forever.

“We are thrilled that Dario ac-cepted the offer to drive the Lotus atGoodwood,” said Christian Overland,executive vice president of The HenryFord. “We know how much the carmeans to him, and also how much thechance to help honor his hero JimClark means to him and his family.”

“The drive at Indy was a high-light of my life,” said Franchitti, whocurrently drives for Target Chip

Ganassi Racing. “I’ve won the Indy500 three times, but to drive that carthere that day was something very,very special. Back in 1965, that carwas cutting edge technology. It stillfeels very sharp and is bloody quick,especially in a straight line. You open

up the four-cam Ford and hear thatglorious noise, it’s just incredible. Iwas driving the car that day in Indyvery much below its capability be-cause it is a one-off, special piece ofhistory. The drive that day was a verypersonal thing for me.”

In 1965, the Lotus-Ford, drivenby Scottish-born Formula One star

Jim Clark, won the Indianapolis500. The Henry Ford acquired thecar in 1977 and in 2009, the Fordengine was removed from the vehi-cle and shipped to Indianapolis,where conservation work began atRace Car Restorations, Inc. The

chassis was restored byClassic Team Lotus runby Clive Chapman, son ofColin Chapman, founderof Lotus.

The creation of theLotus-Ford stands as anexcellent example of inno-vation and collaboration.Lotus and Ford MotorCompany were ultimatelybrought together in theearly 1960s by legendary

American road-racer Dan Gurney. Atthat time, Gurney thought that thesleek, front-engine American Indi-anapolis race cars could be defeatedby proper application of rear-engine,European Formula One technology.He introduced Ford engineers toColin Chapman, founder of Lotus andone of the world’s most innovative

race car builders. The result was alightweight, aircraft-inspired Lotuschassis, with four-wheel independentsuspension and powerful rear-mounted Ford V8 engine. The Lotus-Ford effectively killed the traditionalIndy car and established a new para-digm for American race cars.

“The drive this weekend atGoodwood will be about demonstrat-ing the car for all those fans of Jimmy,and I am excited about doing it,” saidFranchitti, currently seventh in the In-dyCar Series standings with two racesleft. “Goodwood is a fast, fast trackthat hasn’t changed much since backin the day, so I’ll be taking it veryeasy. It’s a demonstration run with abunch of cars that were very importantto Jimmy’s life and his career. I can’ttell you how privileged I feel to beable to do this.”

Franchitti will take the Lotus38/1 on the course during the JimClark Tribute Parade throughout theweekend. The Lotus-Ford 38/1 Indycar will be on display all weekend atGoodwood in the paddock area of theevent.


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Franchitti Reunites with The Henry Ford and the Jim Clark Lotus-Ford 38/1 IndianapolisWinner as Part of Clark Tribute at 2013 Goodwood Revival

you at the fax number... Note: Thisprocess means you will not participatein the quoting process, and repairersmay order from suppliers that havequoted first, then direct order any re-maining parts to you via the ‘directonly’ option.”● Just over a year later, the option tonot be a fully active participating sup-plier was revoked. In an email com-munication issued in July of 2013,PartsTrader advised Select Service re-pair facilities in certain markets that:

“As you were notified in a previ-ous email, PartsTrader is discontinu-ing the fax only option for supplierswho choose not to utilize the Part-sTrader platform as a fully active par-ticipating supplier... When you usePartsTrader after July 31, supplierswhich you have nominated to usePartsTrader but have not yet begun touse the PartsTrader application to pro-vide quotes or accept orders, will nolonger appear on your system as anavailable vendor, and therefore willno longer be able to receive ordersplaced in PartsTrader via fax.... We

would of course like you to encouragethese suppliers to participate, but youshould also identify suppliers forthose makes who are participating toavoid any purchasing issues on Au-gust 1 or later. We can assure you thatwe do have participating dealers cov-ering every major vehicle make in the[market] area.”

According to SCRS, “The rulesof the game are changing and it is ap-parent that maintaining the relation-ships and negotiated deals ofparticipating repair facilities is only apriority, so long as all involved sub-mit to do business in the manner pre-scribed by State Farm Insurance, andother carriers with similar programs.Today these mandates address partssourcing and ordering, but there isvalid concern that they open the doorto future market manipulation and in-fluence over other similarly criticalcollision businesses purchasing habitsas well.”


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“As in the past with this com-pany”, states Eddie, “they pay us onlyafter we file suit but before they gobefore a judge and/or jury. Thereafterthey pay in full for every needed ma-terial, process and rates for a while…then abruptly change back to their oldways. I’m puzzled; as I am confidenttheir company share-holders would beas well, since the insurer has oftenpaid 20 times the amounts in dispute,often paying upwards of $2,500.00 in

legal fees and costs for a dispute thatmay be under $100.00!”

“I don’t care” said Eddie Quin-tela; “it would be much easier for theirpolicyholder if they just paid whatthey owe without the need for litiga-tion, but when they don’t, I’ll be help-ing my customer to have their ‘day incourt.’

As I see it, they [insurers] can ei-ther pay fairly now… or pay muchmore later! “It doesn’t make a lot ofsense and even makes less ‘cents’ saysQuintela. “It’s no wonder insurancerates continue to climb and it has ab-solutely nothing to do with the cost ofproper repair as the insurers wouldhave people believe!”


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The Automotive Management Institute(AMI) and the Automotive Service As-sociation (ASA) have announced thatMark Steinke, production manager forRydell Collision Center, Grand Forks,N.D., is the recipient of this year’s EmilStanley Merit Award. Steinke hasworked in the collision repair industryfor more than nine years. He is cur-rently completing the necessary re-quirements to earn his AccreditedAutomotive Manager (AAM) designa-tion. When not working in the shop, hecontributes his time to various com-munity and industry organizations. Asthe scholarship recipient, Steinke willreceive $1,000 to be applied towardexpenses to attend educational sessionsand view the latest repair technologiesand equipment during the 2013 Inter-national Autobody Congress & Expo-sition (NACE), Oct. 16-18 in LasVegas. “I am honored to be selected asthe recipient of this scholarship.," saidSteinke. "I’m looking forward to thetraining and networking opportunitiesthat this scholarship makes possible.This opportunity will provide me withnew knowledge acquired from manyof the best instructors in the industry.”The Emil Stanley Award is made pos-sible by a grant from ASA to AMI.

AMI and ASA Give the 2013Emil Stanley Merit AwardBellavia Blatt announced today that as

of Aug. 23, 2013, more than 420plaintiffs, up from 120, have joinedthe mass action lawsuit filed againstCarfax. The additional plaintiffs re-sulted in Carfax’s increased potentialliability of more than $150 Million, upfrom $50 million previously.

The lawsuit contends that Car-fax’s exclusive contracts with indus-try insiders—among them, Cars.comand AutoTrader.com forced auto deal-ers to sign costly agreements for ve-hicle history reports. The allegedillegal, anticompetitive practices en-abled Carfax to overcharge dealers.

Establishing a monopolistic cli-mate enabled Carfax to publish inaccu-rate and outdated reports. Customers’demands for free Carfax reports, as ad-vertised on television, compelled deal-ers to subscribe to Carfax’s service.Carfax’s anticompetitive practices in-creased costs to dealers, and ultimatelyconsumers, by hundreds of millions ofdollars.

The lawsuit demands a jury trialand seeks treble (three times) dam-ages, interest and attorney’s fees.Consequently, a small dealer would

potentially recover $105,000; amedium size dealer, $216,000; and alarge dealer, $324,000; plus interestand attorney’s fees.

Because of the potential gain,dealers are joining the lawsuit on adaily basis. The lawsuit’s key objec-tives are permitting competition andimproving the accuracy of the reports.

Leonard A. Bellavia of Mine-ola-based Bellavia Blatt is leading thelawsuit. Bellavia serves as generalcounsel to several national, state andregional dealer associations and rep-resents many of the largest dealergroups in the country. The firm hasextensive experience in auto-industrylitigation and serves as co-lead coun-sel in a lawsuit against the federalgovernment on behalf of 150 termi-nated Chrysler dealers.

“Dealers may still join the lawsuitagainst Carfax,” Mr. Bellavia said.“However, they must act quickly.”

To learn more about the lawsuitand to join it, call Bellavia Blatt at516.873.3000, and ask for Brad Stern.For more information, visit Dealer-Law.com. Carfax did not respond to arequest for comment.

Attorney Spearheads Suit Against CarfaxCARSTAR Auto Body Repair Expertsshop owners gathered recently in LasVegas to celebrate the company’s 24thanniversary and honor its top perform-ers from across the U.S. Customerservice is a foundation of the culture,and CARSTAR says it maintains anaverage customer satisfaction index(CSI) rating of 98 percent or better.Each year, CARSTAR honors the topstores in customer satisfaction in threetiered sales levels. The CSI ranking re-flects the ongoing survey feedback re-ceived from customers based on theirCARSTAR experiences. For level 1,the winner was City CARSTAR inJanesville, WI, owned by MichaelBuggs. For level 2, the winner wasChampion CARSTAR Collision inHightstown, NJ, owned by Paul Edge-comb. For level 3, the winner wasUtzig CARSTAR Collision Service inJanesville, WI, owned by Al Utzig.

Said David James, vice presi-dent of marketing for CARSTAR,“Customer surveys and our own ob-servations tell us the three store own-ers and their employees receivingthese honors have generated an ex-ceptional level of positive awarenessin their communities and created re-peat customers for CARSTAR.”

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San Diego-based Mitchell Interna-tional, which makes software for theauto collision industry, that it’s beingsold to private equity firm KKR & Co.of New York for an undisclosed price.However, Bloomberg News reportedthe deal valued Mitchell at about $1.1billion. Bloomberg cited sources whorequested anonymity.

Mitchell’s current owner, AuroraCapital of Los Angeles, agreed to sellthe company after several months oflooking for a buyer. Aurora, also a pri-vate equity firm, acquired Mitchell in2007 for more than $500 million.

Aurora acquired Mitchell in fromHellman & Friedman LLC. A littleover a year later, in April 2008,Mitchell and CCC Information Serv-ices announced an agreement to mergethe two companies. The Federal TradeCommission filed suit to block themerger and in March 2009, a judgeruled in favor of the government andthe companies terminated their agree-ment to merge.

Mitchell employs about 900workers in San Diego writing softwarethat helps insurance companies andbody shops manage vehicle repairs. It

also makes software for handling med-ical insurance claims from auto acci-dents. Finally, it has a product thathelps workers’ compensation insurersspot claims abuses.

Alex Sun, president and chief ex-ecutive of Mitchell, said the owner-ship change will help the companyexpand globally and boost its productline.

“The current management teamwill stay in place,” Sun said. “There re-ally will be no change in the operationsor strategy of the company.”

Mitchell expects revenue of $350million to $400 million this year, Sunsaid. Mitchell has annual earnings be-fore interest, tax, depreciation andamortization (EBITDA) of about $90million, other sources said.

Three companies dominate theauto claims software business—Mitchell, Solera Holdings’ AudaEx-plore division in San Diego, and CCCInformation Services of Chicago. InJanuary, Leonard Green & PartnersLP, another buyout firm, acquiredCCC from Investcorp, one of the Mid-dle East's largest private equity houses,for more than $550 million.

The buyers face a consolidatingauto collision repair market that’s see-ing fewer accidents—thanks tobackup cameras and other accident-avoidance technology.

“That claims shrinkage isn’tover yet,” said Stephen Applebaum,senior analyst at industry consultingfirm Aite Group. “So you have a lotof people in this business trying tofigure out what they’re going to donext.”

For Mitchell, the strategy in-volves expanding into additional areasof property and casualty insurance.That approach mirrors what Mitchelldid over the past decade to break intothe injury claims software business.

The company also has growthpotential overseas. Today, the bulk ofits business is centered in NorthAmerica.

“There are some health care op-portunities because that industry ischanging rapidly, and Mitchell hassome good expertise,” Applebaumsaid. “Then there is the internationalpiece. Mitchell’s name is Mitchell In-ternational, but they are not really in-ternational.”

Mitchell has recently beefed upits international footprint through aninvestment in GT Motive, an autoclaims software firm serving Spainand other parts of Europe.

Mitchell International traces itsroots in San Diego to 1946, whenGlenn Mitchell managed a Chryslermotor parts distributorship and sawthat body shops needed better parts in-formation and pricing data. Hefounded Mitchell Manuals, an autoparts information publishing firm.

Mitchell died in 1971. The com-pany has been sold several times overthe years, as it morphed from papermanuals to digital software and data-bases. Today, Mitchell employs about1,700 people worldwide.

KKR has $83.5 billion in assetsunder management and invests a sig-nificant chunk of its money in tech-nology firms. The sale is expected tobe completed this winter.

KKR & Co LP and Warburg Pin-cus LLC were among the private eq-uity firms competing for Mitchell.Advent International Corp and Black-stone Group LP also participated inthe auction for Mitchell.

Mitchell International Sold to Asset Management firm KKR For Estimated $1.1B

The Alliance of Automotive ServiceProviders of New Jersey (AASP/NJ)has announced its support of the Mis-sissippi Collision Repair Associa-tion’s (MSCRA) recently filed suitagainst State Farm and PartsTrader inan attempt to prevent the insurer frombringing the PartsTrader program toMississippi.

“What part of ‘no’ doesn’t StateFarm understand?” asks AASP/NJExecutive Director Charles Bryant.“The collision industry has clearly re-jected the concept of PartsTrader, yetState Farm is taking the position thatthey are going to force PartsTrader onthe collision industry—like it or not!This lawsuit should be a wake-up callfor State Farm. State Farm’s attemptto create the appearance that they aretrying to help the collision industrysolve a problem has clearly failed.

“The collision industry hasclearly rejected the concept of Part-sTrader, yet State Farm is taking theposition that they are going to forcePartsTrader on the collision indus-try,” said Bryant. “State Farm’s at-

tempt to create the appearance thatthey are trying to help the collisionindustry solve a problem has clearlyfailed.”

On Aug. 28, MSCRA and twodozen collision repair facility operatorsfiled a lawsuit in the Hinds County,Miss., Chancery Court against StateFarm and PartsTrader, stating the re-quired PartsTrader program can dam-age their cycle time and therefore,harm customer satisfaction.

“If PartsTrader was good for thecollision industry, State Farm wouldhave been able to convince the indus-try to accept the concept by now,” saidBryant.

Said State Farm spokespersonRoszell Gadson, “State Farm re-cently received notice of a lawsuit inHinds County, Mississippi.... We be-lieve the suit is without merit. We in-tend to vigorously defend the suit,”said Roszell. “The Parts Trader pro-gram has not yet even been imple-mented in Mississippi,” he added,seemingly unaware that that is thepoint of the lawsuit.


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The California Air Resources Boardrecently passed another mandate forauto manufacturers selling vehicles inCalifornia. As of 2014, all vehiclessold in California will be required tohave windshields which reflect thesun. The windows would have ametallic coating, a window technol-ogy said to be in use for some 20years now.

The board passed the mandate inhopes of not only reducing green-house gas emissions but also improv-ing fuel efficiency. By using thesun-reflecting windows, vehicles willmaintain a cooler temperature andtherefore drivers will use less air con-ditioning. Apparently the windowsare able to keep sedan interiors 14 de-grees Fahrenheit cooler, while keep-ing a truck or SUV about 12 degreescooler.

Starting in 2012, one-quarter ofvehicles sold in the state of Califor-nia will require the sun-reflectingwindshields. These windshields mustblock fifty percent of the sun’s heatwhen a car is parked. By 2014, all ve-hicles will be required to have suchwindshields.

Starting in 2016, all vehicles willbe required to block sixty percent of

the sun’s heat. However, car manu-facturers will be allowed to compen-sate for the temperature control insome other way, as long as it meetsthe increased standard.

According to statistics involvedin the decision, the windshieldchange will prevent 700,000 metrictons of carbon dioxide from beingemitted in the year 2020. This is equalto removing 140,000 vehicles fromthe road all year. However, this is justa drop in the bucket when you con-sider the 22 million vehicles in Cali-fornia.

Some are concerned that themetallic coating on the windshieldswill interfere with the working ofcell phones, GPS and toll road elec-tronic passes. However, the wind-shields are going to have a smallarea in which the metallic coating isnot placed. This is expected to alle-viate the problem, although manyare still skeptical.

CA Air Resources Board Passes WindshieldRequirement to Reduce A/C Usage

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The death of a California teen isunder investigation after she wasfound lifeless inside a locked car,and police suspect a jammed lockmay have led to the teen’s death.

The 14-year-girl was founddead inside a hot car where temper-atures reached 130 degrees afterfaulty locks apparently left hertrapped inside.

Graciela Martinez was founddead in the backseat of her brother’sBMW outside Madera South HighSchool in Madera, CA, hours afterhe had gone inside to class.

He drove his sister to schoolthat morning and left her alone in thevehicle because he had a 6.40 amclass while her first lesson began at7.40 am. She had no cellphone, foodor water with her.

When he and another sister fin-ished classes at the end of the day,they found Graciela white and unre-sponsive in the back seat.

For the family of Graciela Mar-tinez, there are questions that maynever be answered, and at the top ofthe list is how someone young andhealthy could be taken from them sosuddenly.

“They took her to the hospitalbut they couldn’t save her,” said thevictim’s sister, Patricia Martinez.

Police said it now appears theMadera South freshman was acci-dentally locked inside her car andwas unable to escape.

“People don’t think of that, Idon’t think of that even after this in-vestigation started, that was the fur-thest thing from my mind,” saidMadera detective Dan Foss.

But things quickly changedwhen Foss made a disturbing dis-covery about the car’s locking sys-tem. He said investigators foundthe doors will sometimes lock onboth the inside and outside whenthe key is used, disabling the hornand making it almost impossible toescape.

“Would she feasibly be able toget out of the car? It would be verydifficult, she would have to try veryhard,” Foss said.

Officers demonstrated how thecar can unknowingly turn into adeath trap. Investigators said Gra-ciela’s brother was unaware of therisk when he locked her in only tofind her dead hours later.

“It’s just sad, you never reallyknow when it is going to happen.”said classmate Brandon Hernandez.

“She was my only sister. I don’tknow if I can ever get through it,”Patricia Martinez said.

California Teen Dies in Lock-Jammed CarASA’s Dan Risley has made ASA’sposition clear that it is against allforms of direct repair program re-quirements to use specific suppliers orproducts. In a letter dated September11 to Ed Rust Jr., chairman of theboard and chief executive officer ofState Farm Mutual, Risley commendsthe U.S.’s leading private passengerautomobile insurer for its past deci-sion to eliminate its requirement touse a specific estimating platform byits direct repair shops. The associationalso acknowledges State Farm’s scor-ing system that promotes competitionamong Select Service repair facilities.

However, the association comesout firmly against State Farm’s recentrequirement to use the PartsTrader on-line parts marketplace, stating it willincrease a State Farm shops cycle time,negatively impacting customer satis-faction and increasing the insurancecompany’s costs in the long run.

The letter states, “ASA would liketo acknowledge State Farm as one of thefirst companies in the country to notmandate that a collision repair facility uti-lize a specific estimating platform. Formany years, several top 10 insurance car-riers required a specific estimating plat-form to participate in their direct repairprogram. In addition, State Farm was oneof the first to implement a scoring sys-

tem that allows Select Service repair fa-cilities to compete against each other in atransparent and real-time environment.These decisions clearly elevated StateFarm’s position in the industry as athought leader and facilitated positivechange. The letter continues, “In light ofthe recent announcement of the nationalrollout of Parts Trader, ASA is taking afirm stance against insurance companymandates that limit a repairer’s right tochoose their vendors, distributors andsuppliers.”

ASA includes three suggestionsfor State Farm to consider as a startingpoint to address the industry’s con-cerns.● Immediately eliminate mandates re-quiring collision repair facilities to pur-chase or source parts using a specificthird-party vendor.● Encourage the use of these types ofprograms on a voluntary basis with afinancial incentive.● Heavily weight your scoring systemto reward repair facilities that are lead-ing their respective markets in partscost, alternative parts usage, length ofrental and cycle time. All of which arekey operational metrics that drive over-all repair costs.

The complete text of the letter canbe read and downloaded at www.auto-bodynews.com.

ASA President Risley Writes to State Farm’s Ed Rusk Jr.

A recent vapor explosion in Missoula,MT, has led to the death of one bodyshop employee and the injury of an-other. Both OSHA and the local Mis-soula fire department are investigatingthe tragic incident.

Two employees of Rick’s AutoBodywere injured the morning of Aug19, one fatally, after lacquerthinner fumes exploded in anenclosed area in the back ofthe shop.

Bruce Hall, 44, diedearly the following morningat Harborview Medical Cen-ter in Seattle from third-de-gree burns suffered over 95%of his body.

Missoula City Fire Mar-shal Gordy Hughes said thetwo workers were caught inthe fire when static electricitycaused paint fumes to ignite,and explode.

Hughes said two other employeesrushed to the area after they heardsomeone yell fire, and doused theflames with a fire extinguisher.

The other man had minor burnsand injuries related to inhaling fumes

from the explosion, Hughes said. Hewas hospitalized then released.

Hughes said several items in theshop also caught on fire, but the autobody shop itself sustained minimaldamage.

“We’ll be looking at things likewhat kind of protective system they

have in place,” Hughes said.Rick Booth, who owns Rick’s

Auto Body, said the entire shop is dev-astated by the death of a co-worker.

Hall, who lived in Missoula, hadworked at the shop for five years inthe detail department and provided

customers with rides when their vehi-cles were in the shop, Booth said.Customers were very fond of Hall,whom Booth described as a quiet guywho liked his job.

“It’s a tragedy,” Booth said. “It’snot what we expect to have happenwhen we come to work.”

He said he isn’t sure what OSHAor the fire department will be investi-gating, but said he assumes they arelooking at what caused the elementsto ignite. They may also be looking ata faulty piece of equipment, he said.

Booth said there may be a me-chanical issue with part of the fan thatshuts off when it senses fire. “I wantto find out what it was, so we can fixthe right thing,” Booth said.

Hughes said his inspectors wouldbe looking into the ventilation systemand other safety measures in the build-ing. The fire department’s investiga-tion won’t be completed until nextweek.

Hughes said Rick’s Auto Body is“not negligent as far as the fire de-partment [is concerned.]”

He said that OSHA’s investiga-tion to determine if the building’s

safety code was up to standards willbe released in a couple of weeks, andpotentially an exhaust fan may be partof the issue.

While the shop had safety meas-ures, including training, in place, man-agement acknowledges that theventilation and equipment is stillbeing investigated.

There are a few things to retainfrom this incident:● When transferring flammable liq-uids in a metal container, the containermust always be grounded and bonded.● When transferring flammable liq-uids, ensure it is being done awayfrom potential ignition sources.● Ensure all containers are cappedwhen not being used.● Just because many paints are nowwaterborne does not mean that paintoperations are without hazards; mostclearcoats are still very flammable.● Employees must be trained on theworkplace hazards of their work envi-ronment.

This horrific event is a reminderof the seriousness and significancethat attention to safety has, particu-larly with paint and spray operations.


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Everyday Paint Operations Result in Explosion and Fatality that Rocks the Collision Industry

Employees of Rick’s Auto Body on Missoula’s west sidegather outside the shop after the fatal explosion.Credit: Kurt Wilson, Missoulian

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