autobody news july 2011 southwest edition

Two fraud investigators with the stateDepartment of Insurance were shotand killed June 7 while trying to get

information from anagent.

Rhett Jeansonne,an investigator since2006, and KimSledge, an 11-yearemployee of the in-surance department,

were shot and killed by insuranceagent John Melvin Lavergne. In thepast, Lavergne had been cited forfraud and ordered to stop operations,Louisiana Insurance CommissionerJim Donelon confirmed in an emo-tional news conference. The insur-ance agent had previously facedcriminal charges and civil sanctions,

according to police and the insuranceoffice.

“My deepest sympathies go outto the loved ones of our two departedcolleagues, in particular, the surviv-ing spouses and children of these

brave individu-als,” Donelon saidin a statement.

Police in VillePlatte, about 50miles north ofLafayette, got acall of shots firedat Lavergne Insur-

ance about 1 p.m., said TrooperStephen Hammons, spokesman forLouisiana State Police.

The two investigators were

SCRS Releases Commentary on FarmersNew COD DRP Agreement ControversyRecently, industry trade publications,including Autobody News (June, 2011)have reported on the concern voicedfrom repair facilities across the countryover intrusive elements of Farmers In-surance new COD agreement. The So-ciety of Collision Repair Specialists(SCRS) reviewed the content, and be-lieve that it is in the best interest of theindustry to make the agreement avail-able for public review.

Insurance carriers have continuedto increase pressure over repair shops toobtain the quickest/cheapest repair,while interjecting themselves furtherinto the oversight and management ofrepair businesses. The industry is oftendisadvantaged by restriction of commu-

nication from participants of these pro-grams, and it is important for the indus-try to rely on factual review ofdocuments, rather than anecdotal mus-ings. If we wish for business conditionsto improve, it is important that our in-dustry finds the voice to express ourconcerns openly and honestly withoutfear of being transparent.

To that purpose, SCRS has high-lighted some areas of interest.All recip-ients of this communication are notifiedthat thematerials presented are not to beconstrued as direction or suggestion,and is intended simply to better informindividuals acting within their ownjudgment, making sound business deci-

Allstate to Open Electronic Communication with Non-DRP Shopsby John Yoswick

Allstate Insurance will soon roll-outtechnology that will enable shops thatare not part of the insurer’s direct re-pair program to communicate elec-tronically with the insurer, much as itsDRP shops do.

Dan Risley, a project managerfor Allstate at the company’s Illinoishome office, said this new “Transac-tional Non-DRP” system will enableany shop to upload estimates and dig-ital images toAllstate, receive insurer-written estimates fromAllstate, etc.

“We realize not all customers usea network shop, and we want to make

it easier to do business for those shopsand for our customers,” Risley said.Risley’s discussion of the forthcoming

change was justone of recent newsitems related to in-surance companiesthat will likely beof interest to shops.Here’s a wrap-upof some of thisnews.

Insureds are shopping. Consumersshopped and switched auto insurersmore aggressively in 2010 than theyhave for 14 years, according to pre-

See Allstate, Page 30

Two Louisiana Insurance DepartmentInvestigators Killed by Insurance Agent

See LA Insurance, Page 8

Dan Risley

Rhett Jeansonne

Kim Sledge

See Farmers COD DRP, Page 33

COLUMNS in this issue...Attanasio — Body Shops and Yelp: It’s a Love-Hate Relationship .p. 16Weaver — A Homemade Air Bag Light—Brilliant Stupidity . . . . .p. 21Williams — Real Opponent in the Wholesale Parts Business . . .p. 23Insurance Insider — The “Neutral Information Provider” . . . . . .p. 24Danalevich — Business Financial Security Preventive Maintenance .p. 28Franklin — How to Survive a Summer Slump . . . . . . . . . . . . . . . .p. 32Cheney — Auto Recyclers Host Collision Panel . . . . . . . . . . . . . .p. 37

Autobody Online at www.autobodynews.comThe New Laser Welding Technology ● Two Pennsylvania CollisionAssociations ● NHTSA: A Car is Not a Social Networking Device

REGIONAL ARTICLES in this issue...OK Commissioner Questions Increased Driving Record Fee . . .p. 4Family-Owned Glass Doctor Franchise Opens in Louisiana . . . .p. 6GM to Add 110 Jobs, $331M in Upgrades at Arlington, TX, Plant .p. 6Joplin, MO, GM Dealer Supports Community After Tornado . . . .p. 12CCAR Announces ‘GreenLink Shop’ Awards for TX Facility . . . .p .13Texas Pushes Back on Federal Emissions Laws . . . . . . . . . . . . .p .13Jackie Cooper Imports Grand Reopening in Tulsa . . . . . . . . . . . .p .14Texas Shop Makes its Own Light Inspection Tunnel . . . . . . . . . .p. 31

NATIONAL ARTICLES in this issue...Eileen Sottile, Quality Parts Coalition Legislative Update . . . . . . p. 10Former GMAC, Delays IPO Due to Market Conditions . . . . . . . . .p. 18Toyota to Face First US Sudden-Acceleration Test Trial in 2013 .p. 20Hyundai, Kia Face South Korean Fair Trade Antitrust Probe . . . .p. 34

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www.autobodynews.com | JULY 2011 AUTOBODY NEWS 3

SouthwestPublisher & Editor: Jeremy Hayhurst

General Manager: Barbara DaviesAssistant Editor: Erica SchroederContributing Writers: Tom Franklin, John Yoswick, Lee Amaradio, Dan EspersenJanet Chaney, Toby Chess, Mike Causey, Tom McGee, David Brown, Rich Evans,Ed Attanasio, Chasidy SiskAdvertising Sales: Joe Momber, Sean Hartman (800) 699-8251Sales Assistant: Kristy MangumArt Director: Rodolfo Garcia

Serving Texas, Oklahoma, Louisiana, New Mexico and adjacent metro areas, Autobody Newsis a monthly publication for the autobody industry. Permission to reproduce in any form thematerial published in Autobody News must be obtained in writing from the publisher.©2011 Adamantine Media LLC.

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

Allen Samuels Katy Chrysler-Jeep-Dodge . . . . . . . . . . . . . . . . . . . . . 14

Audi Wholesale Parts Dealers . . . . 31Autoland Scientech. . . . . . . . . . . . . 21BMW Wholesale Parts Dealers . . . . 27Chevyland . . . . . . . . . . . . . . . . . . . . 29Chief Automotive. . . . . . . . . . . . . . . . 9Classifieds. . . . . . . . . . . . . . . . . . . . 38Dallas Dodge . . . . . . . . . . . . . . . . . 40David McDavid . . . . . . . . . . . . . . . . . 2Equalizer Industries . . . . . . . . . . . . . 6Ford Wholesale Parts DealersTX, OK, LA, NM. . . . . . . . . . . . . . 17

Fowler I-240 Chrysler-Jeep-Dodge. . 7Garmat USA . . . . . . . . . . . . . . . . . . . 4Gene Messer Hyundai . . . . . . . . . . 10Global PDR Solutions . . . . . . . . . . . 15GM Wholesale Parts Dealers . . . . . 32Honda/Acura Wholesale PartsDealers . . . . . . . . . . . . . . . . . . . . 26

Huffines Hyundai Plano . . . . . . . . . 13Hyundai Wholesale Parts Dealers . 19

Kia Motors Wholesale Parts Dealers. 25LKQ . . . . . . . . . . . . . . . . . . . . . . . . . 39Mark’s Casa Mitsubishi. . . . . . . . . . 24Mazda Wholesale Parts Dealers . . . 33Mercedes-Benz of Oklahoma. . . . . 23Mike Calvert Toyota. . . . . . . . . . . . . 16Mitsubishi Wholesale Parts Dealers. 30MOPAR Wholesale Parts Dealers . . 11NACE/CARS 2011 Registration . . . 35Nissan/Infiniti Wholesale PartsDealers . . . . . . . . . . . . . . . . . . . . 33

Ray Huffines Chevrolet . . . . . . . . . . . 5Replica Plastics. . . . . . . . . . . . . . . . 31Safety Regulations Strategies. . . . . 26Scoggin-Dickey Buick . . . . . . . . . . 12Scorpion Coatings . . . . . . . . . . . . . . 8Suzuki Wholesale Parts Dealers. . . 28Toyota Wholesale Parts Dealers . . . 34Volkswagen Wholesale PartsDealers . . . . . . . . . . . . . . . . . . . . 29

Volvo Wholesale Parts Dealers . . . . 34Young Chevrolet . . . . . . . . . . . . . . . 22

Inde

xofAdvertisers

REGIONAL

CCAR Announces ‘GreenLink Shop’ Awards

for TX Facility . . . . . . . . . . . . . . . . . . . 13

Certificates of Insurance Bill Passes

Legislature, Heads to Governor in TX . . . 9

Georgia Auto Repair Tax Bill Still Alive

in House . . . . . . . . . . . . . . . . . . . . . . . 29

GM Shreveport Marks 30th Year of

Production Amid Looming Shut-Down . 15

Group 1 Automotive Buys Ford, GM

Dealerships in El Paso, Texas . . . . . . . . 14

Inspector Gadget—Making a Light Inspection

Tunnel to Find Paint Defects . . . . . . . . . 31

Jackie Cooper Imports Hosts Grand

Reopening in Tulsa, OK . . . . . . . . . . . . 14

Joplin, MO, Dealer Works to Bolster

Community & Employees After Tornado. 12

Kia To Boost Capacity At West Point,

Georgia Plant . . . . . . . . . . . . . . . . . . . . 32

Nissan Leaf Production Could Be Delayed

at Smyrna Plant . . . . . . . . . . . . . . . . . . 19

OK Loses 26 Auto Dealers Since 2009. . . . 6

Prevalent Airbag Fraud Prompts Increased

Penalties in New California Law . . . . . . . 8

Staged Crash Investigation Leads to LA

Arrests . . . . . . . . . . . . . . . . . . . . . . . . 15

Texas Loops Emails, IMs in With New Ban

on Texting While Driving. . . . . . . . . . . . . 9

TX Officials Push Back on Federal Emissions

Laws . . . . . . . . . . . . . . . . . . . . . . . . . . 13

TX Senate Votes to Beef Up Texas Insurance

Department . . . . . . . . . . . . . . . . . . . . . . 9

Use of Credit-based Insurance Scores

Upheld in Texas . . . . . . . . . . . . . . . . . . 10

Volkswagen Opens Chattanooga,

Tennessee Plant. . . . . . . . . . . . . . . . . . 19

COLUMNISTS

Yoswick - Allstate to Open Electronic

Communication with Non-DRP Shops . . 1

Attanasio - Body Shops and Yelp: It’s a

Love-Hate Relationship . . . . . . . . . . . . 16

Chaney - Auto Recyclers Host Prominent

Collision Repairers in Panel Discussion . 37

Danalevich - Business Financial Security

Preventive Maintenance . . . . . . . . . . . . 28

Franklin - How to Survive a Summer

Slump . . . . . . . . . . . . . . . . . . . . . . . . . 32

Insurance Insider - Telling the Tale of the

“Neutral Information Provider” . . . . . . . 24

Schroeder - Chatham Parkway Collision

Center in Savannah, GA, is All About

Dealer Partnerships . . . . . . . . . . . . . . . 26

Sisk - Nigro’s in Philadelphia Exemplifies

the City’s Brotherly Love Motto . . . . . . . . 36

Weaver - A Homemade Air Bag Light—

Brilliant Stupidity . . . . . . . . . . . . . . . . . 21

Williams - Apathy, the Real Opponent in

the Wholesale Parts Business . . . . . . . 23

NATIONAL

Auto Lender Ally, Formerly GMAC, Delays

IPO Due to Market Conditions . . . . . . . 18

CARSTAR Auto Body Repair Experts Hold

Third Annual Soaps It Up! Car Wash for

Make-A-Wish Foundation . . . . . . . . . . . 38

Eileen Sottile and the Quality Parts Coalition

Offer Legislative Update . . . . . . . . . . . . 10

Hyundai, Kia Face Fair Trade Commission

Antitrust Probe on Auto Parts Pricing

After Allegations . . . . . . . . . . . . . . . . . 34

School Uses Nanotechnology to Convert

Exhaust Heat into Electricity . . . . . . . . . 20

SUVs Now Safer Than Compact Cars in

an Accident, IIHS Report Says . . . . . . . 22

Toyota to Face First US Sudden-Acceleration

Test Trial in 2013 . . . . . . . . . . . . . . . . . 20

Contents

Texas automotive dealership ownerRamsay Gillman, who built his fam-ily business into one of the state’slargest dealer groups, died June 3 athis home in Houston at 67 years old.

Gillman was a second-generationowner of theGillmanCos. RamsayGill-man has served as Owner/President andChief ExecutiveOfficer of TheGillmanCompanies andwas theChairman of theBoard of The Gillman Companies.

In early 2010, he sold 99 percentof the company to his three children—daughter Stacey Gillman-Wimbishand sons Jason and Christopher.

“My father was an industryleader,” said Stacey Gillman-Wim-bish, 44, to the Houston Chronicle.“He loved to get involved and was notafraid to take the time necessary to af-fect change.”

Ramsay’s father, Frank, startedthe business when he opened a Pon-tiac dealership in 1938. Ramsaystarted his automotive career workingin the parts department of his father’sPontiac dealership.

After attending the General Mo-tors Dealer Management Institute and

other vocational schools, he becamean authorized dealer in 1967. Ramsayand his brother Martin later took overthe business and in 1998 Ramsay wasable to buy out Martin.

Ramsay Gillman participated innumerous charitable organizations,both on state and national levels. Ac-cording to his biography, he receivedthe 1996 Sports Illustrated All-Star

DealerAward, presented by theAmer-ican InternationalAutomobile DealersAssociation, “for his lifelong contri-bution to the automotive business andcommitment to numerous charitableorganizations.”

He has also served as President ofthe Houston Automobile Dealers As-sociation, Vice President of the TexasAutomobile Dealers Association, andwas appointed Vice Chairman of theTexas Motor Vehicle Commissionfrom 1984 through 1987 by the Gov-ernor of Texas.

He was currently serving as a di-rector of the Texas Department ofMotor Vehicles as appointed by theGovernor of Texas and serves thoughFebruary of 2013.

In 1997, the State of Texas Houseof Representatives passed House Res-olution No. 350, officially commend-ing Gillman for his “outstandingachievements” and years of dedicationto the State of Texas, the automobileindustry, his community, and charita-ble organizations.

Gillman Cos. now controls 14dealerships in Texas. They include

three groups of eight franchises inmetropolitan Houston; Honda, Subaruand Mitsubishi stores in SanAntonio;and Chevy, Honda and Chevrolet-Buick-GMC stores in Harlingen andnearby San Benito, south of CorpusChristi near the Mexican border.

The dealership group generated$497 million in revenue in 2010 withnew vehicle sales of 10,727 units.

He is survived by Stevie Gill-man, his wife of 35 years, their threechildren and four grandchildren. Acelebration of Ramsay Gillman’s lifewas held on June 7 at the George H.Lewis Funeral home in Houston. Amemorial service also took place at St.Luke’s United Methodist Church onJune 8.

The family asks that any dona-tions be directed to the Fort BendWomen’s Center (P.O. Box 183, Rich-mond, TX 77406), Houston Automo-bile Dealers Association ScholarshipFund (P.O. Box 16550, Sugar Land,TX 77496-6550), or National Auto-mobile Dealers Charitable Foundation(P.O. Box 9133, Tacoma, WA 98490-0133).


Ramsay Gillman, Owner of 14 Texas Dealerships, Dies in Houston

Oklahoma Insurance CommissionerJohn Doak requested on June 10 thatOklahoma’s attorney general deter-mine whether a 2010 bill that in-creased the costs of driving recordswas properly enacted by the state’sLegislature.

The bill increased the cost of ob-taining a motor vehicle report from theDepartment of Public Safety from $10dollars to $25, a 150 percent increase,according to the Oklahoma InsuranceDepartment. SB 1556, introduced inthe Senate in 2010, was approved bythe Legislature and signed by thenGov. Brad Henry in 2010.

As a candidate for office in 2010,Doak sought an injunction to preventthe bill from being implemented andasked the court to nullify the measure.Doak withdrew that petition, which hefiled as a citizen, after being electedto office in November of 2010.

In his request for an attorneygeneral’s opinion, Doak argues thatthe bill is a revenue raising measure,noting that all of the fee increase anda portion of the original fee would beallocated to the General RevenueFund.

The new fee, Doak wrote in theletter to the attorney general, “…is sowholly out of proportion to the ex-penses incurred by the Department ofPublic Safety in administering Motor

Vehicle Reports that it cannot be con-sidered anything but an attempt toraise revenue.”

Doak’s main objection is thatwas not properly enacted. Article 5,Section 33 of the Oklahoma Constitu-tion requires that revenue raisingmeasure originate in the House, maynot become law without a vote of thepeople unless approved three-quartersof each chamber and may not bepassed during the last five days of thesession. The bill originated in the Sen-ate, did not receive three-quarters ap-proval in the House and was passed bythe Senate in the last four days of the2010 session and by the House on thefinal day of the session.

“This fee increase impacts every-one and I believe it was not properlyimplemented,” Doak said according toInsurance Journal. “Hopefully, the at-torney general will reach the sameconclusion.”

OK Commissioner Questions Increased Driving Record Fee

Late Texas auto dealer Ramsay Gillman(seated) in 2008 with his children (l-r):Stacey Gillman-Wimbish, Christopher Gillmanand Jason Gillman

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Interstate 45 Tops List for Most TX Teen Car CrashesNew data shows the number ofcrashes involving teen drivers ishigher on certain roads and highwaysin Texas, according to Allstate.

Interstate 45 in Harris County hadmore car crashes involving teen driv-ers than any other roadway in Texasbetween 2006 and 2010, according tothe data provided to Allstate by theTexas Department of Transportation.

Interstate 10, also in HarrisCounty, had the second highest, andInterstate 10 in Bexar County had thethird most.

Motor Vehicle Crashes by Road-way and County Involving DriversAge 15-19 from 2006-2010 in Texas:

Roadway/County, Total Crashes

I-45, Harris County 3,091


I-10, Bexar County 1,727


SL1604, Bexar County 1,648


I-35, Travis County 1,579

I-635, Dallas County 1,489

US 59, Harris County 1,440

FM 1960, Harris County 1,365

I-45, Montgomery County 1,276

I-10, El Paso County 1,231

US 281, Bexar County 1,201

I-35 E, Dallas County 1,162


The time between Memorial Dayand Labor Day is known as the “100Deadliest Days.” More teens die in carcrashes during this period than duringany other.

“Car crashes are the number onekiller of Texas teens,” said MichaelWalker, an Allstate agent in Austin.

Please visit www.dot.state.tx.us.

On June 4 Corpus Christi policemade it harder for local auto thievesto steal or burglarize cars.

On June 4 the department hosteda free vehicle identification numberetching event at a local grocery storeand a vehicle safety assessment at an-other. Officers were on hand to in-spect how vulnerable each car is,offering tips to make them more se-cure.

“The summer is here and manypeople will be parking their cars atthe beach and leaving valuables in-side,” said Julie Garcia, a policespokeswoman.

The first auto safety event wasfrom 10 am to 2 pm at H-E-B plus,where officers performed the VINetching. The second was held 3 to 6pm at H-E-B plus in Flour Bluff,where each vehicle was given a theftreduction report card.

At the first event, officers usedacid to etch the VIN number of vehi-cles into each of its windows, makingit harder for thieves to change itsidentity for sale and easier for policeto recognize if stolen, police said.

For more information contactthe Auto Theft Task Force at 886-2872.

Corpus Christi Police HoldVIN Etching Event

The Glass Doctor® of North CentralLouisiana franchise owned by KaneBanks is now open and ready to “fixyour panes!”

Glass Doctor of North CentralLouisiana offers mobile residential,automotive and commercial glassservices to Lincoln and OuachitaParishes. The showroom and shop areopen 8 am to 5 pm Monday throughFriday, 8am to 12 Saturdays and a 24-hour emergency service is available.

“We’re here for Ruston, Monroeand the surrounding area’s glassneeds, including everything fromwindshield replacements to store-fronts to custom glass shower enclo-sures,” Banks said.

Upon purchasing the franchise,Banks attended the most in-depthtraining in the glass services industry,a 10-day training course on the latestglass repair technology, customerservice techniques and marketingmethods held at the Glass DoctorUniversity Training Center in Waco,Texas. The Glass Doctor of NorthCentral Louisiana shop is located at1705 Industrial in Ruston. For moreinformation call (318) 232-3012 orvisit http://www.glassrepairmon-roela.com.

Family-Owned Glass DoctorFranchise Opens in LA

General Motors Co. said May 27 itwill add 110 jobs at its SUV factoryin Arlington, Texas and invest $331million to upgrade the plant.

The Detroit-based automakerwill upgrade the plant with newequipment and tooling machinery.

The investment is part of abroader plan announced by GM ear-lier this month to spend $2 billion toupgrade 17 US sites in eight states.

GM builds four full-size SUVmodels at the Texas plant: theChevrolet Tahoe and Suburban, theGMC Yukon and the Cadillac Es-calade.

The 57-year-old factory em-ploys about 2,400 workers and waslast expanded in 2001.

“This investment will allow usto continue building award-winningfull-size SUVs that offer better fuelefficiency than ever before withoutsacrificing the features and function-ality they’ve come to expect,” GMmanufacturing manager Larry Zah-ner said according to the DetroitNews.

GM to Add 110 Jobs,$331M in Upgrades atArlington, TX, Plant

OK Has Lost 26 AutoDealers Since 2009Chrysler and General Motors’ bank-ruptcy filings coupled with the reces-sion contributed to the closure ofmany auto dealerships in the state ofOklahoma. But 10 new dealershipshave sprung up in the past few years,including several Hyundai stores,Fowler Volkswagen in Norman and anew Fiat dealership in Edmond.

Since 2009, the year Chryslerand General Motors filed for bank-ruptcy, many dealerships have con-solidated, changed brands or closedaltogether. Some whose franchiseswere discontinued switched to sellingused cars.

According to the NationalAuto-mobile Dealers Association, the totalnumber of dealers nationwide is17,700, down from 20,010 two yearsago, an 11.5 percent drop.

In Oklahoma, there were 26dealers who did not renew their li-cense with the Motor Vehicle Com-mission from 2009 to the present.

Steve Rankin, president of theOklahoma Automobile Dealers Asso-ciation, said he disagreed with GeneralMotors’and Chrysler’s decision to ter-minate many dealers, especially thosethat carried Cadillac, which facesfierce competition from Lexus andBMW, according to The Oklahoman.

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transported to the hospital, wherethey were pronounced dead, he said.It was not immediately clear whyspecifically they had gone to thebusiness.

Before turning his gun on him-self, Lavergne barricaded himself forhours inside his Ville Platte, LAagency, Lavergne’s InsuranceAgency,while police surrounded the building,state police say.

“I have personally spoken tomembers of Ms. Sledge’s and Mr.Jeansonne’s families to express mysympathies over this tragic and un-necessary situation,” Donelon saysin a statement. “My deepest sym-pathies go out to the loved ones ofour two departed colleagues, inparticular, the surviving spousesand children of these brave indi-viduals.”

In November 2009 the Depart-ment of Insurance issued Lavergne,then 64, a cease and desist order,six-month license suspension, anda $16,500 fine for allegedly pro-

viding fraudulent proofs of insur-ance to the Lafayette Departmentof Motor Vehicles on several occa-sions.

Lavergne was issued a casualty,property and vehicle physical damagelicense in April 1977 which was validthrough April 2011, acording to astatement from the insurance depart-ment at the time. Lavergne was also is-sued a life, accident and health licensein May 1973, which was valid throughApril 2010.

Following this series of events,Insurance Commissioner Donelonmay make some changes to policieswithin the Insurance Department.

Investigators don’t currentlycarry weapons but can request thatthey be accompanied by state policeon visits of this nature, Donelon said.

“We are seriously consideringarming our investigators,” a visiblyshaken Donelon said according to In-surance Journal during a news con-ference in Baton Rouge.

Before making any changes thedepartment would first review safetyand security procedures, but Donelondidn’t know how long that wouldtake.


Continued from Front Page

LA InsuranceConsumers must navigate a numberof potential dangers when consideringa used car. They have to make sure themileage is accurate, determine if theengine is in reasonable condition, andensure that the brakes and suspensionare in working order, to name just afew. However, even the most consci-entious buyer may not think aboutwhether the airbags are in their origi-nal condition, especially if the buyeris purchasing a car with a salvage title(a car that had previously been in anaccident). Because of this naivety,airbag fraud is becoming increasinglycommon.

National Highway Transporta-tion Administration (NHTSA) is-sued a report on fatal crashes in2008 that revealed troubling infor-mation about used airbags. In 255 of1,446 fatal accidents, airbags hadnot been replaced after a previouscrash. In nearly 50 percent of allfatal crashes with non-deployedairbags, these safety devices weredefective or simply missing. Sowhile non-deployments are rare, fa-

talities are likely when airbags donot work as intended.

Airbag Fraud: Insurance Fraud and Re-fund ScamsIn the abstract, airbag fraud occurswhen the original airbag is not re-placed or calibrated to its previouscondition. Airbags are expensive ma-terials and the replacement process isa delicate exercise.

Unscrupulous used car dealersmore likely to shirk this process tosave time and money in getting carsready for resale. By reducing theamount of money put into a car, thepotential profit increases. Repairshops also engage in this practice forthe same reasons. They stand to makemore money by purchasing airbagparts very cheaply over the Internet,yet they can charge a customer or in-surance company full price for theparts and labor.

As such, airbag fraud has twodistinct components: insurancefraud, where the airbag cavity is

Prevalent Airbag Fraud Prompts IncreasedPenalties in New California Law

See CA Airbag Law, Page 29


Texas Loops Emails, IMs in With New Ban on Texting While DrivingTexas is set to join numerous otherstates across the country that havebegun cracking down on texting whiledriving.

The Texas House of Representa-tives has taken action to reduce thenumber of accidents relating to dis-tractions caused not only by texting,but by sending instant messages andemails while driving.

The Texas House approved a billon June 4 that will place a ban onsending and receiving texts, emailsand IMs (instant messages) whiledriving.

This bill is one of the first to dealwith the barrage of other distractingactions beyond text messaging thathave become available on cellphoneswith recent technological advance-ments. Many Texas cities alreadyhave their own ordinances banningtexting and cellphone usage, such asAustin, El Paso, Dallas and San An-tonio.

However, according toGainesvillePolice Department Public InformationOfficer Belva McClinton, the city ofGainesville does not have any ordi-nances of this nature.

If Texas Gov. Rick Perry signsthe bill into law, it will not take effectuntil the first of September.

If a bill such as this passeschanging the law, McClinton says,“(Gainesville police) usually warnpeople for a while before issuing ci-tations because some people don’tread or watch the news,” according toThe Oklahoman.

Gainesville residents had mixedemotions about the bill, ranging fromreprieval to cautious scolding, accord-ing to reports made by The Oklahoman.

Two new Texas distracted driv-ing laws are already in effect, accord-ing to the Texas House.

One bans teen drivers from usingcellphones and the other prohibitsdrivers from using handheld cell-phones in school crossing zones.

The Texas Senate voted on May 23 torenew the state Department of Insur-ance and give it stronger enforcementpenalties when companies lose chal-lenges to their rates.

Lawmakers are consideringcompeting bills to extend the influ-ence of the agency that regulates theinsurance industry. The legislation isrequired under the Sunset process,under which state agencies are evalu-ated for effectiveness and necessityevery 12 years. The insurance depart-ment was technically due to be re-newed during the legislative sessionin 2009, but state lawmakers failed tocomplete the process. The agencywas allowed to continue operatingunder a temporary measure.

Both the House and Senate billskeep the current system that lets com-panies file rate changes and start col-lecting before they are approved bythe state, but the Senate version givesthe agency the ability to hit companieswith heavy fines if they challenge stateorders to lower rates and lose. Thesame provision failed two years ago.

Differences between the Houseand Senate version of the bill muststill be negotiated.

TX Senate Votes to Beef UpTexas Insurance Department

The Texas Legislature May 31 passeda measure that requires regulationand approval of property and casualtycertificate of insurance forms pro-vided to insureds as proof of cover-age. Insurance agents traditionallyhave been asked to provide the cer-tificates to insureds and interestedparties. As a result agents are oftenbrought into disputes over policyterms and coverages because of lan-guage contained in the certificates.

Under Senate Bill 425 only ap-proved certificate of insurance formsmay be issued to an insured. It pro-hibits a property/casualty insurer andagents issuing certificates of insur-ance or other documents intended tobe used as proof of coverage “if thecertificate or document alters,amends, or extends the coverage orterms and conditions provided by theinsurance policy referenced on thecertificate or document.”

Penalties may be determined bythe Texas Department of Insurancefor noncompliance, and TDI may col-lect a fee of up $100 for the filing ofa new or amended certificate of in-surance form.

Certificates of Insurance BillPasses Legislature, Heads toGovernor in Texas

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The Quality Parts Coalition (QPC) is agroup of about 80 representativesfrom different companies and associ-ations that focuses on preserving com-petition of auto repair parts bysupporting the availability of lower-cost alternative collision repair partsfor consumers and insurers.

Eileen Sottile, a representativefor QPC who hasbeen instrumentalin getting legisla-tion together forthe organization topresent to Con-gress, gave a leg-islative update toAutobody News on

the group’s upcoming endeavors nowthat there is a new Congress on thehill.

QPC came about in response to a2005 patent infringement suit thatFord brought to the InternationalTrade Commission (ITC) againstKeystone, alleging design patent in-fringement of exterior collision repairparts for the 2005 F-150.

It was after this case that coali-tion members realized they “needed apermanent change to the patent laws,”said Sottile.

According to Sottile, up to thatpoint people in the aftermarket crashpart industry didn’t think they wouldhave design patent issues on cosmeticparts.

Ford brought yet another lawsuitagainst LKQ/Keystone following theF-150 case, and Sottile said that with-

out a change in the patent laws car-makers can continually come backwith lawsuits on a part-by-part basisand bankrupt the aftermarket parts in-dustry.

Sottille says QPC was created inresponse to these issues to try to finda solution. This group represents allaspects of the repair industry, in-cluding; insurers, collision shops,seniors, retailers and aftermarketparts companies and manufacturers.Some consumer groups have alsovoiced their support for QPC’s leg-islative endeavors, although they arenot QPC members.

“In most cases we didn’t feelthey even deserved a patent,” saidSottile. The cosmetic parts in questionare so similar to their aftermarketcounterparts that Sottile said thatQPC has a hard time seeing how theyrose to the standard of getting a de-sign patent.

According to Sottile, the carcompanies currently have a “near mo-nopoly” on the crash parts marketwith 72% control of the market andthese design patents will only increasethat holding.

QPC is gathering support for leg-islation the group may introduce inCongress sometime this year.

QPC originally introduced a billinto Congress in 2009; it aimed tomake the act of providing a part solelyfor the purpose of repair exempt fromdesign patent infringement. It wasbased on current laws inAustralia andthe UK known as “repair clauses.”

That bill did not get voted on by thefull Senate and House before their ses-sion closed.

QPC is currently working in a bi-partisan manner to explore potentiallegislative solutions to the designpatent issue for introduction to thecurrent Congress that is in session.

QPC has had several meetingswith Congress, including a meetingwith the House Intellectual PropertySubcommittee and a full JudiciaryHouse meeting. According to Sottile,the support for reforming designpatent laws with a repair clause isthere, the group is just awaiting rein-troduction in Congress.

“If a patent is awarded, competi-tion in the secondary market shouldstill be permitted,” said Sottile.

Sottile drew the distinction thatQPC has no intention of prohibitingthe protection a patent provides pri-mary competitors against each other

with the legislation—”but in the sec-ondary market, when the part is onlyprovided for repair, we don’t think itshould be subject to design patent en-forcement,” said Sottile.

For example, QPC believes thatdesign patent laws should preventBMW’s signature grille from Fordrecreating it and using it on their Fi-esta, but it should not prevent after-market parts companies fromrecreating the BMW grille for re-placement on a damaged BMW vehi-cle.

Sottile also argues that thepreservation of competition in theparts market in this manner ulti-mately allows for the consumer tobenefit.

“There’s a big cost difference be-tween these parts; about 25 to 60 per-cent,” said Sottile. “The timing iscritical in this economy.”

For more information about QPCand their legislative endeavors pleasevisit keepautopartsaffordable.org.

The full text of the QPC’s pastlegislation can also be seen atwww.autobodynews.com.


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Eileen Sottile and the Quality Parts Coalition Offer Their Legislative Update

Use of Credit-based Insurance Scores Upheld in TexasThe Supreme Court of Texas came tothe conclusion that Texas law permitsan insurer to use race-neutral factorsin credit scoring to price personallines of insurance. A class action law-suit over the use of credit scores inpricing insurance coverage broughtthis issue up from the Ninth Circuit.

In Ojo v. Farmers Group, et al,the state Supreme Court clarified that“Texas law prohibits the use of race-based credit scoring, but permits raceneutral credit scoring even if it has aracially disparate impact.”

The suit was brought by Texasresident Patrick Ojo, an African-American, whose home was insuredby Farmers, Justice Green wrote indelivering the opinion of the Court.Despite the fact that Ojo had nevermade a claim on his policy, the insurerraised his rates by 9 percent.

“Ojo alleges that Farmers in-

creased the premium as a result of un-favorable credit information acquiredthough its automated credit-scoringsystem,” Green said, according to In-surance Journal.

Ojo sued Farmers on behalf ofhimself and other racial minoritieswhose premiums increased due toFarmers’ use of a credit-scoring sys-tem.

While Ojo did not assert that heor other minorities were intentionallydiscriminated against, his complaintalleges that Farmers’ “credit-scoringsystems employ several ‘undisclosedfactors’ which result in disparate im-pacts for minorities and violate thefederal Fair Housing Act (FHA),” ac-cording to Insurance Journal.

The Court reject Ojo’s argumentas it relates to the FHA, stating thatTexas law “provides that ‘[n]o Act of

See Credit Scores, Page13

Eileen Sottile


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Crossroads Chevrolet-Cadillac inJoplin, MO, served as as a collectionpoint for community donations ofclothing, food, water and other sup-plies for those hit hard by the May 22tornado.

A cluster of General Motorsfranchise dealers in and near Joplinrecently weathered quite a storm andare continuing to pick up the piecesand do the best they can to supporttheir local community in healng.The dealers also recently broke outtheir checkbooks and more to helpthe community recover from the sin-gle deadliest tornado in national his-tory.

Crossroads Chevrolet-Cadillacwas spared by the killer twister, butthe automaker said the storm’s wickedwinds touched the lives of “nearlyeveryone working there.”

Dealership owner Dan Auffen-berg explained on Faces of GM blogthat on the day after the tornado struckMay 22, nine or 10 employees showedup for work.Aufffenberg immediatelyrecognized the severity of the situationand sent them home, saying, “You

don’t need to be here. You need to behome helping your families,” accord-ing to Auto Remarketing News.

As of that point, five employeesof Crossroads had lost their homes tothe storm, and the service manager’swife had lost her mother.

“We’re doing everything we canto help the employees of CrossroadsChevrolet come back from this tragicstorm,” Auffenberg said according toAuto Remarketing News, adding thathe has committed $50,000 to help hisemployees deal with the storm’s after-math.

Auffenberg said the money isdedicated to making sure his employ-ees “make it through.”

Meanwhile, Crossroads Chevro-let-Cadillac also served as a collectionpoint for community donations ofclothing, food, water and other sup-plies for those hit hard by the tornadoand its aftermath.

“Everywhere you look is rubble,devastation and destruction,” GM of-ficials observed.

The town in southwest Missourisaw a death toll of more than 140 peo-

ple, and the tornado destroyed scoresof homes and buildings, including thelocal hospital.

“Yet, as you look closer, you seepeople attempting to clear a patch ofland, anAmerican flag snapping in thebreeze and a sign of thanks,” GMmanagement highlighted. “At thatpoint, you realize that Joplin, Mis-souri, is going to survive because ofthe residents who live here and the as-sistance from people around the coun-try.”

And some of these people fromthroughout the country include Cross-roads’ dealer colleagues from neigh-boring areas.

Chevrolet area sales managerGabriel Ismaio doesn’t live in Joplin,but it is part of his territory. When hefirst arrived the day after the tornadohit, Ismaio admitted it was difficult tograsp what he was observing.

“When you see it on the news,you only see it for a few seconds, thenit goes away. But when you’re here inreal life, it hits you pretty hard,” Is-maio said, according to Auto Remar-keting News.

So Ismaio and Chevrolet zonemanager Ken Sadowski contactedother dealers in their region.

“They all stepped up to the plateand they all helped,” said Ismaio, whonoted other GM dealers came throughwith a total of $80,000 for the reliefeffort.

Previously, the GM Foundationprovided a $100,000 donation to theAmerican Red Cross, and two full-sized Chevrolet vans were presentedto the local YMCA.

Built at the Wentzville, MO,plant, these vans were to be used bythe Children of the Storm program,which provides a safe place foryoungsters to go while their parentsrebuild the families’ shattered lives.

All told, contributions to theJoplin community from the GM fam-ily of dealers, employees and the cor-poration now total more than$250,000.

“We’re here to help moving for-ward,” Auffenberg said, accordingto Auto Remarketing News. “It’sgoing to take a long time to rebuildthis community, and we’re here for

Joplin, MO, Dealer Works to Bolster Community & Employees After Tornado


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Congress shall be construed to invali-date, impair, or supersede any law en-acted by any State for the purpose ofregulating the business of insurance, .. . unless such Act specifically relatesto the business of insurance.’” TheFHA, the Court said, does not relatespecifically to the business of insur-ance.

In addition, the Texas InsuranceCode allow the use of credit informa-tion to develop rates, except when itsuse constitutes “unfair discrimina-tion.”

While the insurance code doesnot specifically define the term “unfairdiscrimination,” Green wrote, it doesclarify that rates may not be based onan “individual’s race, color, religion,or national origin.”

“This decision will help add clar-ity regarding the use of insurancescores and the inappropriateness ofdisparate impact tests for property ca-sualty insurance,” said Joe Woods,vice president for the Property Casu-alty Insurers Association of America(PCI).

With this ruling, the TexasSupreme Court affirms previous con-

clusions of both the state Legislatureand the Department of Insurance.Texas has enacted legislation that al-lows insurers to use credit informationin underwriting and rating, and theTexas Insurance Department hasfound that credit information signifi-cantly improves pricing accuracy, PCInoted.

“The vast majority of states (46)permit insurance scoring subject tosuch regulation as is the case in Texas.Credit-based insurance scoring con-tinues to play a major role in creatinga positive and competitive personallines market. Its use allows insurancecompanies to give more favorablerates to consumers who are less likelyto have costly losses,” said DavidSnyder, vice president and associategeneral counsel of the American In-surance Association (AIA).

He said the Texas Supreme Courthas “made it clear Texas law requiresthat factors used in credit scoring toprice insurance be race neutral, or notbased on race.”

Continued from Page 10

Credit Scores

Expanding on the push-and-pull be-tweenWashington and Texas on envi-ronmental regulations, the state’sattorney general has called federalregulations meant to cut greenhousegases from automotive tailpipe emis-sions unlawful, according to theAustin American-Statesman.

The federal government is push-ing “hastily enacted, cascading regula-tions” on states and businesses,Attorney GeneralGregAbbott arguedin a brief filed June 3 on behalf of ninestates in the US Court of Appeals forthe District of Columbia Circuit.

Other states signing on to thebrief are Alabama, Georgia, Missis-sippi, Nebraska, North Dakota, SouthCarolina, South Dakota and Virginia.

The tailpipe emission rules, writ-ten by the US Environmental Protec-tion Agency and the US Departmentof Transportation, requires automak-ers to improve fleetwide fuel economyand reduce fleetwide greenhouse gasemissions approximately 5 percentevery year , starting with 2012 modelyear vehicles.

Federal officials have said thatthe rules will cut foreign oil use andthat lower emissions will cut con-sumers’ costs at the gas pump.

The tailpipe rules are among sixgreenhouse gas-related regulationsTexas is challenging.

The underlying argument fromTexas on emissions issues: The funda-mental finding that greenhouse gasesare a public health threat is scientifi-cally flawed. Texas officials have alsoargued that complying with the regu-lations will lead businesses to cut jobsas they spend money to comply withthe rules.

In 2009 , the EPA issued an en-dangerment finding that carbon diox-ide emissions threaten the publichealth and welfare of current and fu-ture generations. The finding, whichopened the way to further regulations,including the one on tailpipe emis-sions, spun out of a 2007 U.S.Supreme Court ruling that the EPAhasthe authority to regulate greenhousegases.

The Texas brief comes in a casepitting some states and businessesagainst the EPA, yet the Obama ad-ministration appears unlikely to backdown, according to the Austin Ameri-can-Statesman.

“EPA’s regulatory actions are ofcritical importance to the nation, anddefending against these challengeswill remain one of our highest priori-ties in 2011,” Ignacia Moreno , assis-tant attorney general for the USJustice Department’s environment andnatural resources division, said in aJanuary speech.

TX Officials Push Back on Federal Emissions Laws


An auto repair facility in Texas wasrecognized by the CoordinatingCommittee For Automotive Repair(CCAR) as one of the group's Green-Link Shops for the month of May onJune 1.

The GreenLink Shop status is anextension of CCAR’s CCAR-Green-Link Environmental ComplianceAs-sistance Center and S/P2 Safety andPollution Prevention E-learning Pro-gram—designed to promote con-sumer confidence in local automotiverepair facilities’ environmental/safetyawareness and stewardship.

The new GreenLink Shop is;Sterling McCall Nissan CollisionCenter in Stafford, Texas.

“CCAR is proud to recognizethese newest members of the Green-Link Shop program and their com-mitment to best practices inenvironmental and safety processes,”saidDaren Fristoe, CCAR presidentand chief operating officer.

CCAR requires that repair facil-ities seeking the GreenLink Shoprecognition must maintain high stan-dards of excellence in 10 areas.

For more information pleasevisit www.ccar-greenlink.org.

CCAR Announces ‘GreenLinkShop’ Awards for TX Facility

our employees and for the city ofJoplin.”

Moreover, the National Automo-bile Dealers Association CharitableFoundation continues to actively assistdealers in recovering from this tornadoas well as other devastating weatherand flooding.

“We’ve been very active,” saidBruce Kelleher, NADAexecutive vicepresident. “We’ve already sent checksto dealers in Iowa andAlabama to pres-ent to their employees.”

Since 1992, the foundation’sEmergency Relief Fund has contributedmore than $5 million to nearly 6,500dealership employees victimized bynatural disasters.

“In letters and phone calls we’rereceiving, dealers and their employ-ees are telling us that they’re sograteful for receiving financial assis-tance,” Kelleher added. “They’re justso appreciative that the foundation isthere to provide some help and re-lief.”

Dealership employees who expe-rience financial hardships caused bynatural disasters can contact the foun-dation at (800) 252-7233 to apply forassistance.


Automotive retailer Group 1 Auto-motive Inc said it acquired FordMotor Company’s and General Mo-tors Co’s dealerships in El Paso,Texas to strengthen its brand portfo-lio of new and used cars.

The Shamaley Ford and Shama-ley Buick-GMC dealerships in ElPaso are expected to generate $190million in annual revenues, the Hous-ton-based company said in a state-ment according to Reuters.

“The acquisition of ShamaleyFord and Shamaley Buick-GMC willcomplement the BMW of El Pasoand MINI of El Paso dealerships thatGroup 1 acquired inApril,” Chief Ex-ecutive Earl Hesterberg said.

Group 1 operates 105 dealer-ships in the U.S. and U.K. that offer30 brands of automobiles.

Group 1 Automotive BuysFord, GM Dealerships inEl Paso, Texas


Jackie Cooper Imports, an Oklahomadealership specializing in luxury im-port cars, hosted their grand reopen-

ing celebration on June 16 at thedealership's location in Tulsa, OK.The dealership has been serving theTulsa market since August of 1991and hosted this reopening to celebratethe dealership’s remodel and newbuilding addition.

The event ran from 6 to 8, and in-cluded food and live music from Cyn-thia Jesseen and the Jambalaya JassBand. The expanded, remodeled Mer-cedes-Benz Autohaus now encom-passes 8869 square feet.

The addition allowed the dealer-ship to expand and add an expandedMercedes loaner fleet, a larger show-

room and customer lounge (with moreservices including media enhance-ments & refreshments), inside deliv-ery area, expanded service area andscheduling capacity, enlarged servicedrive, and a full-time concierge.

The building’s architecture wasdesigned byMichael Dwyer and came

to life through Contractor Stava Con-struction of Tulsa.

The dealership is located on 93rdand Memorial Drive in southeastTulsa.

The theme of the event was “AnEvening of Burlesque” and the deal-ership was able to entertain the over600 attendees throughout the evening.

Guests were welcomed by cos-tumed greeters with party favors(garters and rhinestone necklaces), en-tertained by a 7-piece band and cos-tumed singers and enjoyed clothingand jewelry fashions presented bySaks Fifth Avenue.

The opening coincided with thearrival of the 2012 Mercedes-BenzCLS.

For more information please visitwww.jackiecooperimports.com.

Jackie Cooper Imports Hosts Grand Reopening in Tulsa, OK

Jackie Cooper Imports left to right: RichardWasson, Mercedes Sales Manager, SteveLujan, General Sales Manager, Andy Truman,Porsche Sales Manager, Greg Kach, ManagingPartner, Jackie Cooper, Partner

Some of the event’s over 600 attendees linedup to watch the 7-piece band


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GM announced in 2009 that theShreveport, LA, plant would finallyshut down for good no later than June2012, according to the ShreveportTimes.

The plant’s work force hasshrunk from a high of more than 3,000people working three shifts around theclock to 800 now, all working one 10-hour shift, four days a week.

Now as the plant celebrates its30th year of production in Shreveport,GM held a public open house June 16,in part to remind locals of the plant’shistory in the area.

“We’ve called northwest Louisianahome for the past 30 years, and we areproud of our rich history in the commu-nity,” PlantManagerMichael Dulaneysaid to the Shreveport Times. “On June16, we’re opening our doors, so that ourfriends and neighbors can visit our plantand learn more about our employeesand products.”

GM spokeswoman DonnaMcLallen said there has been nochange to the shutdown date.

GM recently announced, withoutgiving specifics, that some plants

across the country may be restarted orsaved from closure, but there has beenno indication that Shreveport is one ofthem. Locals are hoping that the plantwill be considered for reopening atsome point in the future.

Doug Ebey, former president ofLocal 2166 of the United Auto Work-ers union, raised the ire of public offi-cials after calling them out in a May 8guest column in the Shreveport Times.Ebey charged locals to hold public of-ficials accountable for a perceivedlack of outcry that the local GM plantis closing.

The Caddo Parish Commissionresponded June 1 with nothing but sup-port for the ailing factory. It recountedthe commission’s contributions to andsupport of the plant since 1978.

Ken Epperson, President of theCaddo Parish Commission, said theparish government has done every-thing it can to secure the future of thelocal GM plant.

To date, the Caddo Parish Com-mission has given back in rebates toGM a total of $6.5 million, not tomention acres of donated land.

The commission also has joineda work group led by the NorthLouisiana Economic Partnership thatis focused on finding ways to keep theplant open.

Additionally, state and local offi-cials have come together several timesto meet with GM’s corporate execu-tives.

“It’s just so important,” Eppersonsaid of the plant’s economic impact.“The suppliers are going to be hit, too.It’s going to devastate the economy.”

GM’s public open house on June16 included free tours on a first-come,first-served basis from 9:30 am to 4pm.

GM is hosting open houses thisyear at each of its 54 U.S. facilities asa way to recognize the role automo-tive manufacturing plays in communi-ties across the United States, a newsrelease states.

At its peak, GM Shreveport hadmore than 3,000 employees and itslineup of products included the ChevyS10, Hummer H3, GMC Coloradoand Chevy Canyon. It now producesonly the latter two.

In January 1994, 2,500 workerswent on strike, barely a month beforethen-President Bill Clinton came tospeak at the plant.

The plant was never fully able torebound from that strike; the goodnews always coming sandwiched be-tween the increasingly more frequentnews of shutdowns and layoffs.

GM Shreveport Marks 30th Year of Production Amid Looming Shut-Down

State police say a yearlong investi-gation led to the arrests of sevenpeople accused of staging vehiclecrashes to collect fraudulent prop-erty and injury claims in Louisiana.

Investigators say they are stilllooking for an eighth personwho tookpart in the scheme. The arrests madeon May 31 stemmed from a federalindictment returned on May 12.

In all, investigators say the sus-pects received more than $400,000from 2003 through 2010 as a resultof the staged crashes. The majorityof the staged crashes occurred on aportions of U.S. Highway 90 inLafayette Parish, LA.

Staged Crash InvestigationLeads to La. Arrests

The other day I overheard a womantalking on her cell phone. I couldn’thelp it. She was upset and yelling.

“Try me, buddy,” she screamedinto the phone. “I will Yelp you rightout of business!”

Wow, I thought. ‘Yelp’ is now averb (like ‘Google’), and obviously apart of some people’s daily language.

If you don’t know about Yelp, it’sa nationwide review site where peoplepost comments about their experi-ences with particular businesses. Itpromotes itself with the tagline: RealPeople. Real Reviews. It’s easy to findat Yelp.com.

For many companies, includingbody shops, Yelp can boost a businesswith great reviews or damage their bot-tom lines with snarky comments andlow ratings from unhappy customers.The problem is that those ‘unhappycustomers’might really be jealous com-petitors, terminated former employees,or a disgruntled ex-spouse or two.

Yelp is currently getting unfavor-able reviews from a lot of body shopsthroughout the country due to theirpolicies on editing the reviews that areposted. Some shops are suing the SanFrancisco startup or considering doingso. They allege that the website ma-nipulates customer reviews while thecompany claims that their system isdone by computers, not people withan agenda, such as Yelp advertisingsalespeople, for example.

Martin Zurada, a San Franciscoattorney who has represented several

collision repair companies in differentcapacities over the years, is currentlyin the process of putting together acivil suit on behalf of Gene Crozat,owner ofG&C Auto Body, with sevenlocations in Northern California.

Zurada has been watching theYelp situation for quite some time andhe believes the website is manipulat-ing its review system to benefit itselfand generate increased revenues as aresult.

“As a business owner, the Inter-net has a lot of power, obviously, be-cause people are Googling, Yahooingand Yelping all the time and lookingat your business online,” Zurada said.“We know that people are going toread the reviews, but the businessowners are rarely given an opportu-nity to respond to any of the reviewsor comments being posted, or at leasttest these claims online.”

Zurada questions the accounta-bility of a site that allows anyone topost reviews without offering achance to question their reasons. “Themotives of these customers are neverdiscussed in these reviews.

For example, you might have adisgruntled vendor who is upset withyou because you didn’t pay them ontime, and so now they’re writing badreviews on Yelp. An angry customerwill write a negative review and itcould potentially be there forever. Youcan’t respond to the validity of theseclaims, so the only way a businessowner can get satisfaction is via thelegal route. But, it’s a long and expen-sive process to take them to court andcollecting is even more difficult.”

Suing Yelp successfully is atricky proposition for many reasons,Zurada explained. “Some businesseshave tried to sue them, but the prob-lem is that the content provider ismerely posting what someone else issaying. They have a certain degree ofimmunity based on basic Internetlaws, so Yelp is not directly liable foritems posted on their website. Ifeverything online was contested, ofcourse, there would be no Internet, sothey have to be protected to a certaindegree. If they’re posting someoneelse’s claims, we have no issue withthat. But, with Yelp passively accept-

ing, organizing, and indexing theseopinions from the community, whatthey’re doing is essentially manipulat-ing content in such a way to make

money. At that point, they’re nolonger a passive content provider.Now they’re actively disparaging yourbusiness. Many companies, including

body shops, have encountered a situa-tion where Yelp will call them or visittheir business and tell them if you signup, we will help you. It just seems like

businesses who don’t signup with them have morebad reviews appearingmore often while positivereviews seem to disap-pear.”

Zurada has en-countered this scenariomore than once, he said.

“With G&C,we’ve seen it happen—favorable reviews ofCrozat’s shops fall offafter 30 days, while asmall handful of unfavor-able reviews are still

listed there from 2008, for example. Idon’t know what Yelp’s secret algo-rithm is, but it allegedly detects re-views that are real vs. fake ones. It

Body Shops and Yelp: It’s a Love-Hate Relationship


with Ed Attanasio

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

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CAA Santa Clara Chapter President Shawn Saidi and his wifeLisa have very mixed feelings. They’ve encountered somequestionable practices by Yelp, yet they realize they receive afair amount of new business from the website


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seems that companies who won’t signup with Yelp have more bad reviewsand when good ones are posted, theyidentify them as fake. Good reviewsare suppressed and bad ones stay thereforever. That’s our main issue withYelp. Yelp denies it and says they’reneutral, but there has been some con-siderable litigation against them al-ready along this vein.”

Zurada is in the process of re-searching former civil suits that havebeen filed against Yelp, in order to de-vise the best strategy, he said. “We’rein the process of analyzing these othersuits, to see how they were approachedand what was either successful or notin pursuing Yelp.

“Of course, Yelp has gotten verygood at defending these cases, so it’snot an easy task. How do you provedamages? Yelp defends itself by say-ing, hey, we don’t know how these re-views actually affected your business,because you can’t prove who stayedaway based on bad reviews or not. Po-tential customers might not chooseyour shop, because they don’t like thephotos of your facility or any of a hun-dred other reasons. It’s a lawsuit ofsome definite complexity, but Yelp isnot immune to being sued and if theyare manipulating this data to makeprofit, they’re liable for it and bodyshops need to be remunerated for theirdamaged revenues.”

Recently, a group of 66 businessowners filed a lawsuit against Yelp, al-leging that the website has been run-ning an “extortion scheme” and has“unscrupulous sales practices” in placeto generate revenue. They claim thatYelp’s representatives regularly callbusinesses demanding monthly pay-ments in the guise of advertising con-

tracts, in exchange for removing ormodifying negative reviews. The com-panies involved in the litigation con-tend that Yelp informed them that badreviews would disappear by signing anadvertisement agreement with the site.One of the plaintiffs in this current lawsuit against Yelp is John Mercurio,the owner of Wheel Techniques, a 25-year-old company that repairs and doesin-house cleaning, polishing and cus-tom painting of wheels in Santa Clara,California.

It all started with a phone call,Mercurio explained. “The people atYelp contacted me and told me if Ipurchased an advertising plan withthem, they’d help me to get rid of thebad reviews or at least get themknocked down the list,” he said. “But,when I told them no way, they imme-diately removed a total of roughly 505-star reviews off my page. We werelooking at Yelp.com while we weretalking to them, and within a few min-utes the positive review that was for-merly at the top was gone and aone-star review suddenly appeared inits place”

Mercurio felt used and was veryupset at what he saw as a kind of ex-tortion. “It was pretty obvious to usthat they’re in control and what can wedo? In my opinion, the laws haven’tcaught up to the Internet yet, and that’swhy it’s hard to sue them and eventougher to win.

“We’ve got a ton of proof, be-cause we’ve been documenting every-thing along the way and I pull reportsfrom Yelp twice per week. They filtermy reviews so that my overall ratingsits at 2.5 stars. One week, I receivedthree reviews that were all at 5 stars,yet my rating remained at 2.5, because

I won’t buy advertising from them.The 5-star rankings are taken off all thetime without any reason, and these are100% legitimate customer reviews.Weneed to prove that Yelp’s so-called au-tomated system is bogus, and we haveevidence that some of these reviewswere done manually. They wanted$1,000 per month, which is ridiculous.Yelp has cost me a lot of business, upto a one third, I estimate. I know for afact that a lot of people look at ourYelpreviews every month, so it has hurt mybusiness in more ways than we canever know.”

Shawn Saidi owns Active AutoBody in Sunnyvale, Calif., a highlysuccessful shop located in a 13,300square-foot facility and fixing 75–90vehicles monthly. He is also the cur-rent president for the Santa ClaraChapter of the California AutobodyAssociation.

Saidi says Yelp brings him cus-tomers, but he is also wary of the site,for several reasons. “They actuallygenerate a lot of business for us. Cus-tomers tell us that they see us on Yelpall the time. Most of our reviews ontheir site are excellent, but we have afew that are really bad. One was froma customer who brought his car to usaround five years ago. About threemonths ago he wrote a lengthy reviewthat reads like a novel. When you readhis review, you can see that we tried todo literally everything we could tomake him happy. But, five years later,he’s still not satisfied. A few monthsago, we let an employee go and rightafter that, we got a bad review that wasobviously written by this vengeful for-mer employee. It contains a bunch offalse information, but there it sits forall to see.”

Saidi isn’t a social media expert,but he can clearly see that somethingis peculiar in the way his reviews aremanaged by Yelp, he said. “I don’tknow how their system works, butwe’ve had more than 100 positive re-views taken off. One of our customerscalled me and told me that they put hispositive reviews aside. This is a legiti-mate customer and we’ve repaired twoof his vehicles, so why are his com-ments deleted? So, we contacted Yelpand asked them why. They told us thattheir system goes through the reviewsto analyze them for authenticity. If it’sa 5-star review and the user has neverposted before, it gets set aside. Then,they tried to sell me advertising—again!”

The anonymity of the reviews onYelp protects the users, but it alsocreates a situation fostering unac-countability, Saidi, he explained. “Ifone of my customers has an issuewith one of our repairs, we can sitdown and rectify it. I’m not going toemail the person, sharing commentsback and forth—I’d prefer to sitdown with them and handle it prop-erly person-to-person. We always dowhatever we can to make it right andwe’re proud of our work, but ifthey’re only commenting online andwon’t bring their vehicle back, wecan’t help them.”

Yelp was invited to respond to thisstory but declined to do so.

Next month: How can you defendyour reputation when it’s been dispar-aged online?

Law Offices of Martin Zurada785 Market Street, Floor 16San Francisco, CA 94103(415) 637-8483


Ally Financial Inc. has decided todelay an initial public offering (IPO)because of weak market conditions,two people briefed on the matter saidto the Detroit News on June 10.

The mortgage and auto lenderand bank holding company was ex-pected to launch a road show ahead ofan IPO planned before the July 4thholiday.

The IPO could come in late Julyor early August, or be pushed untilafter the Labor Day holiday, whenmuch of Wall Street returns from va-cation, said the officials on June 9.They asked for anonymity because theinformation had not been made pub-

lic.The US Treasury Department

plans to raise $5 billion as part of a $6billion offering when Ally goes pub-lic. The Treasury Department owns acontrolling 74 percent stake inAlly aspart of the $17.2 billion bailout duringthe financial crisis.

Ally filed the paperwork March31 in order to launch an IPO. Ally de-clined to comment on June 9.

The Treasury is expected to sellsome shares. Other owners such asGeneral Motors Co., which holds a9.9 percent stake inAlly, and CerberusCapital Management LP, which holdsa 9 percent stake, do not plan to sell

shares.Treasury has received about $4.9

billion in returns fromAlly to date, in-cluding $2.2 billion in dividends andinterest.

The company reported a $1.1 bil-lion profit in 2010.

Citi, Goldman, Sachs & Co., J.P.Morgan and Morgan Stanley are alladvising Ally on its initial public of-fering.

With more than $172 billion inassets as of Dec. 31, 2010, Ally oper-ates as a bank holding company.

Ally also has operations in mort-gage and commercial finance, and thecompany's subsidiary, Ally Bank, of-

fers retail banking products throughits online arm.

Ally, which was known asGMAC Inc. until last year, wasfounded by GM more than 90 yearsago as its in-house finance arm. It solda 51 percent stake in the company in2006 to Cerberus Capital Manage-ment LP in a $7.4 billion deal.

Ally said it raised its percentageof new car lending to 9.9 percent in2010, up from 6.1 percent, to jumpfrom third highest to the leading autolender.

Bad market conditions may alsodelay other planned IPOs, includingTroy-based Delphi.

Auto Lender Ally, Formerly GMAC, Delays IPO Due to Market Conditions


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The March disasters in Japan contin-ues to take its toll on worldwide au-tomotive production; the end-result ofthe disaster yet to be fully realized ona global scale.

On June 14, Nissan announcedthat the natural disasters could affectthe timetable for building the com-pany’s electric Leaf in the US, ac-cording to Ward’s Automotive.

Nissan’s Smyrna, TN, assemblyplant, where theAltima, Maxima andNissan’s SUVs are built, is undergo-ing some remodeling that will let thecar company build roughly 150,000Leafs in the US each year.

The plant was scheduled to startfull-scale production in late 2012, butnow Nissan is reigning in those ex-pectations.

“The earthquake is putting [theSmyrna plant] in a very difficult situ-ation, but we are not giving up yet. Isthere potential to delay it? There maybe. We’re assessing right now,”Hideaki Watanabe, Nissan’s vicepresident of zero-emissions vehicles,told Ward’s.

Until the US plant is ready tomanufacture the electric vehicle, Leafproduction will be limited to a solefactory in Japan. That factory has thecapacity to build 50,000 Leafs a year,

which would be shared betweenAmerican, Japanese and Europeanbuyers.

For the US, Nissan had promiseda nationwide rollout of the Leaf by2012, but Watanabe now says a na-tionwide rollout will depend on con-sumer demand and dealer readiness,according to Ward’s.

All of these delays are furtheraggravating already annoyed cus-tomers who pre-ordered the Leaf, ac-cording toWard’s. Some are reportingthat the automaker has bumped themoff the waiting list and asked them toreapply. Others complain that the ex-pected-delivery date for their EV hasfluctuated dramatically.

Nissan expects to deliver about6,000 to 7,000 Leaf cars to the US bythe end of summer. In May, deliver-ies for the EV increased dramaticallyto 1,142 units, which is up nearly100% overApril sales. Despite the in-crease, the automaker had hoped todeliver 20,000 Leafs to customers inthe US by summer’s end.

Nissan Leaf Production Could Be Delayed at Smyrna Plant Volkswagen Opens Chattanooga, Tennessee PlantVolkswagen is jumping into the U.S.auto market by opening a new plant inChattanooga, TN.

At the grand opening of the planton May 24, the German automakerpresented the 2012 Passat as the keyto building U.S. sales to 1 millionunits by 2018. The $1 billion plant hasbeen producing cars since April.

The new Passat will go on sale inQ3 of 2011 for $20,000 a car.

That’s about $7,000 cheaper thancurrent models built in Germany andclose to the prices of such competi-tors’ models as the Ford Fusion, theToyota Camry, the HondaAccord andthe Hyundai Sonata.

Jonathan Browning, presidentand chief executive officer of Volk-swagen Group of America, said theautomaker wants to make German en-gineering more accessible to NorthAmerican buyers.

“The Passats produced here inChattanooga will be a key enabler toour growth, allowing us to compete inthe core of the midsize sedan seg-ment,” Browning told reporters beforethe unveiling of the plant, accordingto the Associated Press.

Volkswagen intends to produce150,000 sedans annually at Chat-tanooga for the American market, a

big jump for a car that has only hit apeak of 80,000 units annually sold inthe U.S. in its history.

“Das auto is finally back in theStates,” declared Martin Win-terkorn, chairman of the board ofmanagement for Volkswagen AG, theparent company of Volkswagen, ac-cording to the Associated Press.

The plant itself has energy-effi-cient design measures including LEDlighting and rainwater recycling.

Frank Fischer, who heads VW’sChattanooga plant, told the AssociatedPress that the complex uses 35 percentless energy than a standard automo-tive plant.

When Volkswagen selectedChattanooga as the site of their newAmerican plant, they knew that theonly way to make a dent in the US carmarket was producingAmerican cars,said Fischer.

“You have to be a local producerto also be in the market,” said Fischer.


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School Uses Nanotechnology to Convert Exhaust Heat into ElectricityNo one is happy about rising gasprices, and to make matters worse, upto 60 percent of each $4 gallon iswasted, lost as heat that pours out ofthe exhaust pipe.

But what if some of that heatcould be collected and converted backinto electricity that can recharge thebattery that powers the lights, wipers,power steering, or even the electricmotor in a hybrid vehicle?

The technology to do just thatexists, but it’s still a work in progress.The solution lies in thermoelectric de-vices, and engineers at the A. JamesClark School of Engineering, Univer-sity of Maryland, are challenging pre-vious assumptions about the behaviorof the nanoscale materials used tobuild them. Create better materials,they say, and cars will make muchbetter use of that expensive fossilfuel.

But contrary to the common as-sumption in nanotechnology, “better”in this case may not always mean“smaller.” That realization maychange the way engineers develop fu-ture thermoelectric devices.

A material whose response to achange in temperature generates elec-tric potential, or vice versa, exhibitswhat is known as the thermoelectriceffect. Thermoelectric devices cangenerate electricity when heated by

an external source, or quickly cool orheat their environment when poweredwith electricity.

So why doesn’t every car have athermoelectric power generator?

“The reason thermoelectric de-vices have so far been limited to nichemarkets is that their efficiency is stilltoo low,” said graduate student JaneCornett (Department of MaterialsScience and Engineering). “The goalof our work is to design thermoelec-tric materials that convert energyfrom one form to another more effi-ciently so we can promote the wide-spread use of products that recyclewaste heat and effectively reduce ourconsumption of fossil fuels.”

For example, cars manufacturedor retrofitted with a thermoelectric de-vice placed around the exhaust pipecan use waste heat to generate elec-tricity, improving their overall milesper gallon, especially when a power-draining system like the air condi-tioning is in use.

If the device is too bulky and in-efficient, however, it will consumemore energy than it contributes.

To tackle the problem, Cornettand her advisor, ProfessorOdedRabin(Department of Materials Science andEngineering and Institute for Researchin Electronics and Applied Physics),had to challenge some popular theories.

“Previous models told us that theuse of nanomaterials at small dimen-sions would lead to an improvementin power generation efficiency,” saidCornett. “The models also predictedthat the smaller the nanostructure, themore significant the improvementwould be. In practice, people weren’tseeing the gains they thought theyshould when they designed thermo-electric devices with nanoscale com-ponents, which indicated to us thatthere might be an issue with the inter-pretation of the original models.”

Cornett and Rabin have pre-sented a revised thermoelectric per-formance model that confirms thatsmaller is not always better. Using ad-vanced computer modeling to investi-gate the potential of thermoelectricnanowires only 100 to 1000 atomsthick (about 1000 times smaller than ahuman hair), they demonstrate that inthe set of the tiniest nanowires, meas-uring 17 nanometers or less in radius,decreasing their radii does result inthe increased thermoelectric perform-ance previous models predict. Innanowires above 17 nanometers in ra-dius, however, an improvement isseen as the radius increases.

“The surprising behavior in thelarger size range demonstrates that adifferent physical mechanism, whichwas overlooked in previous models,

is dominant,” said Cornett.“People were looking for solu-

tions in the wrong places,” saidRabin. “We’ve created a better under-standing of how to search for the bestnew materials.”

Thermoelectric devices are cur-rently used in a few consumer prod-ucts, including refrigerators and CPUcoolers in computers. They couldeliminate the need for fluorocarbonrefrigerants, giving rise to fluid- andcompressor-free cooling systems thatpose fewer health and environmentalhazards.

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ForMore Information: See “Ther-moelectric figure of merit calculationsfor semiconducting nanowires.” JaneE. Cornett and Oded Rabin. AppliedPhysics Letters 98(1), 182104 (2011)or visit http://apl.aip.org/resource/1/ap-plab/v98/i18/p182104_s1.

The Clark School of Engineering,situated on the rolling, 1,500-acre Uni-versity ofMaryland campus in CollegePark, Md., is one of the premier engi-neering schools in the US, with gradu-ate and undergraduate educationprograms ranked in or near the Top 20.The Clark School garnered researchawards of $171million in the last year.

Toyota to Face First US Sudden-Acceleration Test Trial in 2013Toyota Motor Corp. will face the firsttest trial in February 2013 of lawsuitscombined in federal court that claim adefect causes the company’s vehiclesto speed up uncontrollably, a judgesaid according to Bloomberg News.

U.S. District Judge James V.Selna in Santa Ana, California, saidin a “tentative order” that the firstbellwether trial would be of claims bythe families of two people killed in aNov. 5, 2010, crash in Utah. Paul Van

Alfen died when his 2008 ToyotaCamry crashed into a wall. PassengerCharlene Lloyd died the next day.

Toyota, the world’s largest au-tomaker, recalled millions of U.S. ve-hicles starting in 2009, after claims ofdefects and incidents involving suddenunintended acceleration. The recallsset off hundreds of economic-loss suitsand claims of injuries and deaths.

“The conduct of a trial in the firstquarter of 2013 will markedly ad-

vance these proceedings,” said Selna,who is overseeing most of the federalsuits. Abellwether case is used by thecourt and lawyers for both sides totest evidence and liability theories be-fore moving on to other trials or lim-iting future litigation. Selna pickedthe Van Alfen case from six submit-ted by lawyers for the company andplaintiffs.

In February, the NationalHighway Traffic Safety Adminis-

tration said their probe of possibleelectronic defects found no causesfor unintended acceleration otherthan sticking accelerator pedalsand floor mats that jammed thepedals.

“We are pleased that the initialbellwether will address plaintiffs’central allegation of an unnamed, un-proven defect in Toyota vehicles,”Celeste Migliore, a Toyota spokes-woman, said in a statement.


Sometimes I wonder if the things Ifind wrong with some cars are therefor me to find out how ridiculoussome people can be. I’ve got to ques-tion the thought process and not-so-brilliant ideas that some people have,just before total stupidity takes over. Igotta ask … “What were you think-ing?”

The other day I had a late 90’sGM in the shop. The owner had re-cently bought it from a small car lot,and had no idea of the history of thevehicle. It was one of those “greatdeals” that he couldn’t pass up. Whyis it these great deals always havesome sort of catch to them? Maybe itwould be a good idea to have itchecked out before you buy it. Afterlooking at it, I might tell you to “passit up.” Honestly, I’ll never understandwhy someone will buy a used carwhen they know nothing about it, ordecide after they buy it to finally have

it checked out … but they do.This particular creation had some

strange problems. It had a strange bat-tery drain. At first glance all the in-strument cluster warning lights,interior lights, and all the electricalfunctions seemed to be working cor-rectly, but there was a drain strongenough to drain the battery in a day orso. Finding the solution was going tolead to an even bigger problem.

Narrowing it down by watchingthe amp meter for the parasitic drawvalue, and pulling fuses till the num-bers dropped back into factory specswas the next procedure. Of all things,it ended up back to a crossed up cir-cuit between the air bag system andthe charging system. I decided tocheck the air bag system for codes.

This was interesting, it was of-fline. No communication with thecrash box. Hmmm, I’m a little con-fused, because I know I saw the air

bag light come on and go off when Ipulled it into the shop. Turning thekey off, and then restarting the cardidn’t help me much, because the airbag light was on and then off. Butthen again, maybe it did help. Like Isaid, the light came on, and then wentoff … Hey, wait a minute isn’t theresupposed to be a few seconds beforeit goes off? Isn’t this how it verifiesits systems are functioning properly?So, what’s going on here?

As a technician I’m trying to fol-low the codes, the diagnostic charts,and the operating description of thesystem I’mworking on. This particularproblem wasn’t following any typicalscenarios. Take into account this wholething started off because of a batterydrain … I’m really starting to scratchmy head over this one.

I had a lot of different ways to gowith this one. I could try and followthe draw a little further, or I could

chase the problem from the air bagside of it. Maybe, it will all lead to thesame problem. I think I’ll work on itfrom the air bag side of the problem.

The air bag fuses were all good,and the light did come on in the dash.So, I decided to pull the air bag diag-nostic module out and pin check theleads to see if that would go any-where. My first check on any systemis the positive signals and then thegrounds. Why? Because a loss ofground can be seen as an open lead,and if the positive signals are there,you’ll actually find a voltage signalon the open ground. That’s what elec-tricity wants to do: find ground, andtake the shortest path back to thesource of the voltage.

In this case they were all there,but when I checked the leads to the in-strument cluster the voltage was com-ing towards the crash box rather than

A Homemade Air Bag Light—Brilliant Stupidity

See Airbag Light, Page 27

with Gonzo WeaverGonzo’s Toolbox This is a new story by Scott “Gonzo” Weaver as posted on his website, www.gonzostoolbox.com.

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

Sport utility vehicles are now saferthan cars of the same weight, thanksto anti-rollover technology, accordingto a recent study.

The Insurance Institute for High-way Safety said in a report issued June9 SUVs in the 2006-09 model yearshad a driver fatality rate half that ofcars.

“The rollover risk in SUVs usedto outweigh their size/weight advan-tage, but that’s no longer the case,”thanks to electronic stability control,said Anne McCartt, the institute’ssenior vice president for research, ac-cording to the Detroit News. “Poundfor pound, SUVs have lower deathrates.”

In assessing risk, the study countsthe number of years that each modelhas been on the road and multipliesthat by the number of that model’s ve-hicles. SUV driver deaths totaled 28per million registered vehicle years,compared to 52 for trucks and 56 forcars.

Among all vehicles, minivansagain had the lowest driver fatalityrate: 25 per million registered vehicleyears, according to the new report.

The last time the institute con-ducted a similar study, in 2007, largeminivans had 66 deaths per 1 millionvehicle years, while very large oneshad 39, the lowest overall fatality ratesamong mainstream vehicles.

Researchers say minivans tend tohave the lowest fatality rates in partbecause drivers are more likely to becarrying young children and are morecareful.

The relative risk of different typesof vehicles has changed, as automak-ers have worked to make SUVs morestable and less prone to rollovers.

When the insurance institute con-ducted its 2007 study, for 2002-05models, car death rates were lowerthan SUVs in every weight class butone. In the latest study SUVs in allweight classes had a lower driverdeath rate.

In 2007, the National HighwayTraffic SafetyAdministration requiredall vehicles to be equipped with elec-tronic stability control, or ESC, by the2012 model year.

By the 2008 model year, ESC al-ready was standard on 65 percent ofcars, 96 percent of SUVs and 11 per-cent of pickups. The technology helpsavoid skidding, as well as maintaincontrol when drivers swerve.

ESC senses when a driver maylose control and automatically appliesbrakes to individual wheels to helpstabilize the vehicle and avoid arollover. Motorists often have no ideaESC has kicked in to protect them.

The Alliance of AutomobileManufacturers, the trade associationthat represents Detroit’s Big Three,Toyota Motor Corp. and eight otherautomakers, said the new study showsthat ESC has become extremely valu-able.

“As automakers, safety and inno-vation are two of our most importantvalues, and our actions back that up:Automakers were introducing ESCbefore the government rulemaking onit,” alliance spokesman Wade New-ton said to the Detroit News. “ESC isconsidered so effective that NHTSAhas previously estimated that the tech-nology can potentially prevent 71 per-cent of passenger car rollovers and 84percent of SUV rollovers.”

NHTSA estimated the cost to theautomotive industry of adding ESCwill total $985 million, $111 per vehi-cle with antilock brakes and $479 forthose without ABS.

But the benefits far outweigh thecosts, according to NHTSA.

“Thanks to this technology, weanticipate the number of rollover fa-talities to drop by thousands every sin-gle year,” NHTSA AdministratorDavid Strickland said in a statement.

Rollover crashes, he said, are thedeadliest of all wrecks.

When it adopted the ESC regula-tion in 2007, NHTSA predicted thetechnology could reduce rollovers by84 percent, preventing between 5,300and 9,600 deaths and as many as238,000 injuries a year. Rollovers,which had exceeded 10,000 for years,fell to under 8,300 in 2009.

The insurance institute study saidESC reduces the risk of a fatality in asingle-vehicle crash by 49 percent and20 percent in multiple-vehicle crashes.It also lowers the risk of a deadlycrash by 33 percent overall, and cutsthe risk of a fatal single-vehiclerollover by 73 percent.

Federal rules require ESC sys-tems to prevent oversteer and under-steer.

In January, NHTSA issued addi-tional regulations intended to protectmotorists in rollover wrecks.

Those rules, to reduce the num-ber of people partially or completely

ejected through side windows duringrollover crashes, will begin phasing induring 2013.

NHTSA issued new rules inApril2009 to toughen roof strength duringrollovers. Rollovers account for lessthan 2 percent of all crashes, but 40percent of all fatalities.

The rules doubled the roofstrength requirements for vehicles to6,000 pounds.

Heavier vehicles from 6,000 to10,000 pounds, which have neverbeen regulated, must now meet roofstrength standards.

The phase-in schedule, which be-gins in September, will be completedfor all affected vehicles by the 2017model year.

Least Deadly Vehicles (Driver deathsper million vehicles)• Audi A6 four-door 4WD (0)• Mercedes E-Class four-door 4WD(0)• Toyota Sienna (0)• Ford Edge 4WD (0)• Nissan Armada 4WD (0)• Land Rover Range Rover Sport (0)

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Most Deadly Vehicles (Driver deathsper million vehicles)• Nissan 350Z (143)• Nissan Titan crew cab 2WD (126)• Chevrolet Aveo (119)• Chevrolet Cobalt (117)• Nissan Titan extended cab 2WD(111)• Kia Spectra5 (102)• Chevrolet Malibu Classic (99)• Hyundai Tiburon (96)• Nissan Versa (96)• Chevrolet Colorado extended cab2WD (93)• Nissan Titan crew cab 4WD (92)• Kia Rio (89)• Kia Spectra (87)• Mazda Miata MX-5 (83)• Subaru Legacy (83)


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APATHY – absence of passion, emo-tion, or excitement.

I hate to say this, but this wordseems best to describe the attitude ofmany parts managers I have spokento. It’s not their fault, just their re-sponse to their daily input of negativeinformation. Every day they get an-other dose of pressure, criticism, anddoom. They worry about the dealer-ship’s future, loss of customers, ris-ing costs and falling profits. All thison top of the daily stress of filling or-ders, creates the natural response,“please just let me survive.” Theyexist on a short term basis, hour byhour, day by day, and month bymonth. This is how it has been forover three years, since the start of thelast economic crash.

We have lost 15% of our dealer-ships. The weak have perished, andthe strong have survived. Here is thegood news… things seem to be get-

ting better. According to the L.A.Times, we’ve had a 20% increase inauto sales so far this year! This is thestart of a new growth cycle. Smart sur-vivors are taking this opportunity toshed their fears and expand their op-erations. I say smart because this is thebest time to get aggressive and goafter new business. The survivorshave less competition, and should seesteadily increasing sales.

We will always have a minimumlevel of business. Our customer’slifestyle demands transportation. Ourcommunities are designed with sepa-rate living and commercial areas, andwalking between them is not an op-tion. We must have our cars! Main-taining and repairing a modernautomobile requires trained techni-cians and expensive equipment. Verylittle work can be done by the averageowner. Money for maintenance is stillshort, but repairs are a necessity. That

means steady work for all of us.Now is the time to be positive.

Shake off that dull, negative attitude.Aggressive solicitation of new cus-tomers will pay off for those dealersthat move now. Take some time andvisit your best customers. Congratu-late them for their tenacity and tellthem you will be with them for thegood times ahead. Partners who sur-vive hard times always find theirbonds stronger. Keep an eye out forcustomer opportunities that you mayhave overlooked. Be ready to servethe new customers that will be callingyou.

There is another major negativeassumption to overcome. Severalparts managers have told me of theirloss of interest in the wholesale mar-ket. The main reason for this is thelack of profit. It seems that there isconstant pressure to reduce costs,starting at the corporate level. I amtalking about the insurance companiesthat cover most of today’s repair costs.In a never-ending search for investorearnings, quality, care, workmanship,and pride are considered to be unnec-essary. The only thing that matters tothese corporations is their bottom line.They constantly push the repair shopto reduce the cost of the repairs. Theshops cannot reduce their labor costany lower; employees are already atthe poverty level. The only place tocut is the cost of materials. The solu-tion for some shops is the use ofcheaper parts. These shops adopt thepractices of the corporations, and con-sider only the cost of materials. Save adollar, no matter what method youuse.

We need to fight back! Quality inboth parts and service needs to beworth more than a 5% discount. Forexample, sheet metal has been a cen-ter of concern for several years. Cheapreplacement imported metal has foundcustomers, at the cost of quality. Nu-merous organizations have come outto support the use of original partsonly. We all agree on the value ofquality in this area. How about the restof the operation? How about qualityof service?

I have never advocated sacrific-ing service and quality for cost. I be-

lieve if you pay less, you get less.There is a minimum everyone mustpay for quality service. The competi-tion should be for better service, notcheaper prices. I believe that servicingthe wholesale market is still a reward-ing job. Our final goal, happy cus-tomers, is a worthy goal and customersatisfaction brings us our own happi-ness.

Autobody News has always sup-ported quality in our industry, pro-moting the best products, materials,and service, never “less for less.” Inkeeping with this philosophy, I wouldlike to offer an opportunity for thosedealers who believe in the quality oftheir service to speak out. I would liketo promote those dealers who still be-lieve in customer satisfaction.

Strong, optimistic leaders de-serve recognition and support. Any ofyou that believe as I do, and want tospread their message of quality serv-ice; contact me at [email protected] will include you in my column, andpromote you as a truly distinctivedealership, a good partner in the autobody repair industry.

Take an active, aggressive rolenow in your local community. Attendas many local business meetings ofthe auto industry as possible. Take astand for quality service above allelse. Our customers deserve our bestefforts, and our best efforts will bringus more customers. This is an oppor-tunity for a “win-win” for all.


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Apathy, the Real Opponent in the Wholesale Parts Business

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In the Middle Ages, civilians didn’thave computers, television, radio,Pong, or even ping-pong. So whatdid they do for entertainment? Onetradition was story-telling. The greatthing about telling such tales wasthat you were forced to use yourimagination. Although it’s importantto note that you weren’t expected tobelieve everything that was beingsaid.

Fairy tales often have a happyending and tell us about a world where

anything is possible. The tale I’mabout to tell you is about the “neutralinformation provider.”

This tale begins in the 1980s,around the time of the first electronicestimating system. For decades priorto the advent of electronic estimating,shop and insurers slaved away prepar-ing handwritten estimates. Alongcame a brilliant man named Maximil-lion. He believed that there was afaster and more accurate way to pre-pare an estimate. He thought he couldequally help body shops and insur-ance companies through the use oftechnology. Because this new ideawould benefit both parties, he thoughthe would be able to sell this newproduct to two different customers. Infact, he could charge the same amountto each. It was the beginning of thenow over-used term “win-win.” Allhe had to do was find a way to takethe data from printed estimatingbooks and put it in an electronic for-mat.

In a matter of three weeks, hecreated a robust software application.He spent the next few months sellinghis product to insurers and repairers

alike. Everyone in the country adoredhim. He was a hero living the Ameri-can dream. He was making far moremoney than he ever dreamed possible.Life was grand. Who would haveimagined that putting a book into acomputer could make so many peopleso happy?

If we were in Medieval Times,our story would have ended there andthe hero would ride off into the sunsetwith a beautiful maiden on the back ofhis horse. But because we’ve wit-

nessed computers,television, radio,Pong and ping-pong (and evenBeer Pong, anewer non-tech-nology-driven ver-sion of Pongfueled by alcohol),we have some-thing else theydidn’t have in theMiddle Ages: “re-ality.” It’s difficultto use your imagi-

nation and dream big when you knowit’s virtually impossible to have ahappy ending with an informationprovider.

Our story resumes with our su-perhero Maximillion looking to ex-pand his very profitable business. Thechallenge is that he now has competi-tion. As a result, he is losing cus-tomers. Max is faced with making hisfirst big decision since deciding to gointo business. Does he sell his productone at a time to 60,000 body shopsspread all across this free and beauti-ful country, or does he sell it to a hand-ful of insurance companies? I thinkwe all know which route Maxtook—the path of least resistance, ofcourse.

The insurance companies pur-chased the estimating system and re-quired shops to buy the program as aprerequisite to be on their direct repairprograms. Maximillion’s profitssoared and so did the insurance com-pany’s leverage.

Here the fairy tale ends and thenightmare begins for the shops. Max-imillion is trying to serve two masters.Unfortunately, it’s not possible. Shops

and insurance companies have differ-ent interests and needs. The once-neu-tral information provider is beingpulled in two different directions.

I think everyone knows who pre-vailed. Maximillion could lose mil-lions if he chooses to side with theshops. Right or wrong, he is heavilyinfluenced by the insurance compa-nies. Although he attempts to remainneutral, it’s nearly impossible in aworld where cost drives most deci-sions.

Now let’s use our imagination asto what happens next. Over the next30 years, the strong influence of theinsurance companies is evident in allthree major estimating systems.We’ve witnessed and experienced theso-called enhancements to the sys-tems, enhancements that were clearlydesigned for one purpose—to appeasethe demands and suggestions of insur-ance companies.

This isn’t a fairy tale. It’s the re-ality of what has transpired. Shopsshould be outraged. They should besending a strong message back the in-formation providers and take actionwhere appropriate. For the informa-tion providers, being neutral shouldnot be a choice but a requirement.

Shops and insurers alike pay a lotof money to the informationproviders. The estimating softwareshould not be influenced by any onegroup or groups. These companiesshould provide information—not aservice where the highest bidder de-cides what’s added or modified to thedatabase or system.

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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with The Insurance InsiderInside Insurance The Insider is a corporate-level executive with a Top 10 auto insurer

in the U.S.. Got a comment or question you’d like to see him addressin a future column? Email him at [email protected]

Telling the Tale of the “Neutral Information Provider”


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Chatham Parkway Collision Centerhas been serving Savannah, GA, forthe last seven years. The body shop

is owned by the nearbyChatham Parkway Sub-aru/Lexus/Toyota/Sciondealership but is run inde-pendently so they are able toservice all makes and mod-els.The body shop partners withthe dealership, taking in cus-tomers that have been re-ferred to them for service.

“We get a lot of business thatway, but we do all makes and mod-

els,” said Joanie Iaco, Body ShopManager. Chatham is able to see anaverage of 180 cars per month.Chatham employs 16 people in their

11,000 square-foot space including; 5body men, 5 painters, 3 estimators,one office manager, one body shopmanager and one porter who assisttechnicians on the shop floor.

Chatham is also a Toyota Certi-fied Collision Center, meaning theyhave to meet certain Toyota bench-marks and standards in 10 differentareas, including training and shop ma-terials. Body shops must qualify an-nually for this certification.

“From a customer’s point of viewit’s great—they know all the techni-cians have been trained to Toyota fac-tory standards as well as ASE andI-CAR,” said Iaco.

Part of the requirements for thecertification are for the body shop tohave the most cutting edge equipment,

including welders, spray booths andlifts. Chatham uses two Blowthermultra-mix down-draft spray booths.

Iaco said Chatham is the onlyToyota Certified Collision Center in

the low-country Savannah area. Theirequipment and level of technicalknowledge is what sets them apartfrom their competition.

Chatham switched to PPG water-borne paint in 2009.According to Iaco,the paint distributor for PPG made the


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Chatham Parkway Collision Center in Savannah, GA, is All About Dealer Partnershipswith Erica Schroeder

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

Chatham Parkway Collision Center on Park of CommerceBlvd.

Painter Jeff Cooper

The whole crew at Chatham stands outside the building

change very easy by providing on-sitetechnical support throughout the tran-sition from solvent-based paint.

“We always welcome the oppor-tunity to use a “greener” product andimprove quality at the same time,”said Chatham’s Fixed Operations Di-rector Tom Ryals.

The distributor provided on sitetechnical support for Chatham as long

as necessary, ac-coding to Iaco.

The paint tech-nicians really likethe new water-borne system.Lead painter JeffCooper said “thepaint match is a loteasier than with

solvent-base. You don’t get dye backor shrinking like with solvent-basedpaint.”

Painter Bob Emiry added “Whatyou see is what you get—a qualityfinished product.”

“These guys here really love it,”Iaco said of the waterborne paint sys-tem, “they had a really easy time mak-ing the switch.”

Iaco also believes the collison in-

dustry is a great career route for womenthat is often overlooked; she workedher way up through the ranks at JMLexus in Margate, FL, for 17 years be-fore moving up to Savannah about 6months ago. She originally wanted towork as a title clerk for the dealership,but got hired in the body shop instead.

“I really enjoy it; this is a greatshop, a great area and the techniciansare all wonderful,” said Iaco.

The technicians work in teams onthe shop floor at Chatham, making

finishing theheavy work loadthis shop brings ineasier for every-one.“We do a lot of

Lexus work here,so that quality justhas to be there,”

said Iaco. Chatham focuses on qualityand they believe that starts with theirtechnicians.

Chatham Parkway Collision Center41 Park of Commerce Blvd.Savannah, GA 31405912-443-4443www.cpbodyshop.com


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to the cluster. What now? (Here it’shelpful to remember: I love my job, Ilove my job, repeat as necessary.) Iguess I better pull the cluster and checkthe wiring from there back to the crashbox and see if that goes anywhere.

After pulling the dash it didn’ttake a rocket scientist to see what theproblem was. On the back of the in-strument cluster somebody had cut thecircuit board line to the air bag light,and then added a soldered-on wire tothe charge light. So when the chargelight was on, so was the air bag light.Once the car started (provided thecharging system is working correctly)the charge light would go out, and sowould the air bag light. Huh???

You can imagine my “mechani-cal language” was not for the faint ofheart when I found out what wasgoing on. It seems some genius did-n’t want to replace the air bag mod-ule, so they invented their own airbag warning light instead. Brilliantstupidity… I think that’s the bestway to explain it. I can’t imagine

somebody went through all the trou-ble to deceive the buyer of this carfor a safety issue such as air bags. Itshould be a criminal offense and it isin some states (see related storypage 8.)

After undoing the homemadeairbag light, the draw was completelygone. Now the only thing to do was toreplace the air bag module to bring itback up to working order.

Leave it to some unscrupulousdork out there to try something likethis. I’m not saying anybody wouldhave caught the problem at firstglance. It was a well thought out de-ception. If you were not intentionallylooking for an air bag light delay, Idon’t think you would have caught theproblem. But, I still think it is a goodidea to have any car checked out priorto buying it. Maybe, just maybe, youcan spot problems like this before youown the problem.


Airbag Light


on Facebook

Body Shop ManagerJoanie Iaco

Painter Bob Emiry

Earlier this year (Autobody News,February, 2011) I wrote a shop sav-ings article (Credit Card ProcessingFees—Dings, Dents, and Crashes atYour Bottom Line) for ABN readerswarning about credit card host pro-cessing fees which could significantlyding their bottom lines. My Februaryarticle pointed out that these fees canbe very substantial for body shops.

If you missed the article, you canread it along with my other columnsin my column section www.autobo-dynews.com/columnists/danalevich-walter.html.

Now I would like to re-emphasizethe importance of taking extreme cau-tion with authorizing Credit Card host-ing agreements and specifically theircancellation fees. A body shop ownercontacted me to share his story involv-ing a nightmarish experience pertain-ing to a cancellation fee he got suckedinto compliments of his prior Mer-chant Credit Card processing Host.

This body shop owner read myABN article and phoned me to expresshis frustration during the past fivemonths as a result of his shop can-celling a merchant credit card hostservice. His shop had recently signeda service agreement, based on thecredit card host’s friendly telemarket-ing sales pitch: “we will give you thelowest credit card processing fee rateson Earth.” Here’s what happened.

The shop’s bookkeeper was con-tinuously aggravated by the creditcard host’s customer service depart-ment. When she called with questionsthey were consistently tossed backand forth between service reps. Nonecould provide adequate explanationsof the reason for transaction fee de-ductions from their business checkingaccount.

Soon afterward, the owner andbookkeeper accepted an offer fromanother Credit Card host, who also of-fered “the lowest processing fee rateson earth.” The new credit card hostsweetened the deal by agreeing to paythe cancellation fee up to $400.Sounds good, right?

The shop owner proceeded tosend an e-mail to his existing creditcard host giving written notice for can-cellation of service. A couple of

months later the bookkeeper perform-ing account reconciliation noticed anunfamiliar automatic withdrawal ontheir business checking account andinformed the shop manager. He as-sumed the fee was taken by the priorcredit card host which he had can-celled months ago. The shop owner in-quired with the Credit Card Host andwas told they have not received a can-cellation notice and were continuing toactively withdraw monthly minimumusage fees as per the user agreement.

The shop owner had fortunatelykept a hard copy of the cancellation e-mail and read it to the credit card cus-tomer service rep. The credit card repmade it sound as if fault was with thebody shop and not the credit card host,and wanted the shop to send a “signedletter” of cancellation of services.Shop manager complied and sent thesame e-mail letter previously sent andattached his signature.

About a month later the shopmanager received a phone call fromthe fast talking credit card host repre-sentative indicating that a new cancel-lation fee of nearly $1,000 was due.The shop owner told him he was crazy(using some colorful language) andthat he wasn’t responsible for their in-adequate customer service. The creditcard host rep acknowledged that cus-tomer service changes had takenplace. The manager requested a break-down of the proposed cancellation feecharges and was told he would receivethem that very same day. No cancel-lation fee invoice was received thatday.

A couple of days later the shopreceived a copy of the initial serviceagreement, signed by the manager,which stated in tiny size 6 print thatthere was a $900 minimal cancellationfee if service was terminated beforethree years had elapsed. There wasalso a cancellation fee of $250 dis-closed in the terms and conditionsmanual. This was the fee the shop wasplanning on forwarding to the newcredit card host for reimbursement.

Also received was a cancellationform invoice for $1,235 which had ab-solutely no explanation attached.

By now the shop owner was notfeeling any love for the self-pro-

claimed “lowest credit card process-ing fee on Earth” company. He wasworried that the credit card host hadpossession of his business checkingaccount bank routing number andknowing the credit card host couldeasily insert a large “dent” into hisbusiness checking account balance atany time.

The body shop owner had ameeting with his bank manager to dis-cuss the best solution and some peaceof mind. The bank manager said a stoppayment could be placed that wouldprevent any future unauthorized with-drawals. However he cautioned thatthere are common ways the credit cardhost can easily get around this secu-rity tool. The bank manager recom-mended that the body shop ownerpermanently close his bank accountand open a new account. The shopowner followed his bank manager’sadvice and now sleeps without the

worry of having automatic with-drawals made to his account withouthis authorization.

This story is a cautionary tale foravoiding crashes to your bottom lineand a reminder for us all to be carefulwho we allow access to our bankingand other financial information. Ohyeah, watch out for the #6 or smallersize print before you sign anything.

Ed—Anyone considering a newcredit card processing provider shouldstart with a review website comparingfees like that at credit-card-processing-review.toptenreviews.comand proceed with due diligence fromthere. Your mileage may vary.


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stuffed with concealable materialssuch as rags, foam or paper towelswhile the insurance company isbilled for actual airbag parts; and re-fund scams, where a body shop ac-tually orders a new airbag for acustomer but never installs it. In-stead, the shop bills the customer forthe part and returns the airbag to themanufacturer.

Unfortunately, there are no hardstatistics detailing the prevalence ofairbag fraud, but insurance officialsare concerned about the warning signsdriving this trend. Jim Quiggle, Di-rector of Communications for theCoalition Against Insurance Fraudsays, “Airbag fraud is a black hole fordata,” and, “Nobody knows howwidespread it is, but the warning sig-nals are everywhere.”

The coalition’s executive direc-tor, Dennis Jay, is concerned with on-line sites selling nonconformingairbag parts in violation of state law.He explains that there are enough in-stances for consumers buying used

cars to be concerned, because there isa potential for a vehicle to not have afunctioning airbag.

California Passes Automotive RepairAct, Doubling Fraud PenaltiesTo address this growing concern, theCalifornia Senate recently passed theAutomotive Repair Act (Senate Bill869), which established the Bureau ofAutomotive Repair. Among the manyregulations the Bureau will enforce,auto repair shops would now be re-quired to return airbags to their origi-nal operating condition when replacedduring collision repair.

Under the new statute, a repairshop or dealer who prepares a writtenestimate for the replacement of a de-ployed airbag, and who fails to repairand fully restore it, is guilty of a mis-demeanor that is punishable by a$5,000 fine, by one year imprison-ment in a county jail, or by both thatfine and imprisonment.

A number of automakers, includ-ing Honda, Mitsubishi, Hyundai andToyota, applauded the legislation.They found it clarifies repair shops’responsibilities, reduces fraud, andpromotes driver safety.

Check the Vehicle HistoryEven with the new law in place, driv-ers should take the following steps tomake sure that airbag repairs are prop-erly completed.

For used car buyers, checking avehicle’s Carfax or Autochex historyis an important step. This report willindicate whether a car has been in anaccident, which would lead buyers todo a VIN number check on each ofthe car’s airbags. A technician couldeven check the airbags to see whetherthe same airbags are still in the vehi-cle.

For owners having cars re-paired, checking the airbag indicatoris essential. When the car starts, anairbag indicator should appear in-stantly and then go out. A continuousflashing light may indicate an airbagsystem malfunction. If the lightnever turns on, the airbag may bemissing.

Consumers who believe they arevictims of airbag fraud should contactan experienced attorney to learn moreabout their rights and options.

Information in this article wasprovided by the Venardi Law Firm.Visit www.vefirm.com.


CA Airbag LawGeorgia House Bill 388, which aimsto create a sales tax on services ofmany small businesses including autorepair shops, is still alive in the Geor-gia Legislature.

If passed, the bill could havenegative repercussions on the auto-motive service industry. The Auto-motive Service Association (ASA)and the Georgia Collision IndustryAssociation (GCIA) oppose this leg-islation.

Despite the fact that no actionwas taken on Georgia H.B. 388 be-fore the Georgia Legislature ad-journed, the legislation could beconsidered during the special sessionlater this summer.

The ASA and GCIA are askingGeorgia independent automotive re-pairers and consumers to contact theirrespective representatives in opposi-tion to the legislation.

Visit gacollisionindustry.word-press.com or www.takingthehill.comfor more information.

Georgia Auto Repair Tax BillStill Alive in House

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liminary survey findings from McK-insey & Co.

The survey analysis authors toldAuto Insurance Report that the per-centage of consumers who got a quotefrom another insurer was up 23 per-cent last year, and the percentage ofthose who actually changed to anotherinsurer was up 56 percent. Only 48percent of consumers have been withthe same insurer for six or more years,down from 53 percent in 2008.

The economy is certainly prompt-ing some of this trend. Many peopleare looking to shave household costs,and may be willing to switch for farless in savings than it may have takenthem to bother just a few years ago.

But another reason for the shop-ping may be that auto insurance adver-tising soared 22.6 percent to arecord-high $5 billion last year, ac-cording to analysis by Dowling andPartners Securities. That reversed a 4.2percent decline in advertising in 2009.

Prior to 2009, the industry had in-creased advertising spending forseven straight years. In the pastdecade, insurance industry advertising—the vast majority of which focuseson auto insurance—has grown 211percent from $1.6 billion in 2001. Thebiggest jump in advertising last yearwas by Farmers Insurance, whichspent $505 million, up 125 percentfrom the previous year.

Insureds are confused. Althoughmotorists may be shopping for insur-ance, they don’t necessarily knowwhat they are buying. More than one-third of U.S. drivers who have read atleast part of their auto insurance poli-cies have had trouble making sense ofthem, according to an online HarrisInteractive poll commissioned by In-suranceQuotes.com.

About 87 percent of the 2,079 in-sured drivers surveyed said they hadread at least some portion of their poli-cies, but 36 percent of those driverssaid those policies were somewhat orvery difficult to understand.

Insurance rates outpace laborrates. Increases in auto shop rates arenot quite keeping up with overall in-flation—but pricing for auto insuranceis rising faster.

The national average for bodyand paint labor rates has risen onlymodestly year-over-year since 2006,according to figures from CCC Infor-

mation Services. The average bodylabor rate rose from $41.42 in 2006 to$44.67 in 2010, up an average of 2.1percent per year (paint labor rates rosesimilarly). The national averagehourly rate for paint materials roseslightly faster, from $22.26 in 2006 to$25.37 in 2010, an average increase of3.5 percent per year.

Overall, according to the U.S.Bureau of Labor Statistics, the Con-sumer Price Index (CPI) for autobodywork rose an average of 3.44 percentper year for that 5-year period.

By comparison, the CPI for allproducts rose an average of 2.2 per-cent per year. The CPI for auto insur-ance rose an average of 2.6 percentper year, and the CPI for vehicle partsand equipment (other than tires) rosean average of 3.92 percent per year.

But data for the first four monthsof 2011 tells a different story. Theoverall CPI seems to be rising fasterthan that for autobody work, and theCPI for auto insurance is staying evenabove that.

State lawmakers consider insur-ance-related bills. As legislative ses-sions wrap-up for the year in manystates, bills regulating insurers in waysthat impact shops continue to bepassed, considered or rejected.

A bill approved by the Nevada As-sembly to establish a program to helplow-income drivers get low-cost autoinsurance coverage died in that state’slegislature in late May because it failedto come up for a vote in the Senatewithin 110 days of introduction.

North Carolina Insurance Com-missioner Wayne Goodwin is urgingmotorists to oppose three bills in thatstate that would strip his office of itsability to cap auto insurance rates.“We hear the insurance companiescalling it auto rate modernization,”Goodwin said. “Well, if making yourrates skyrocket is modern, then youcan just call me old-fashioned.”

Wisconsin Gov. Scott Walkerhas signed a law cutting the minimumproperty damage coverage that driv-ers in that state must carry from$15,000 to $10,000.

And in appointing insurancecompany executive Kevin Clinton asthe new insurance commissioner ofMichigan this spring, Gov. Rick Sny-der made clear his priorities for Clin-ton. Snyder, a Republican, saidClinton must “make sure consumersare protected by making sure financialinstitutions are sound,” and will “leadour effort to eliminate burdensome

regulations that are preventing the (fi-nancial) industry from growing.”

More federal oversight coming.The U.S. Department of the Treasuryin May announced plans to create aFederal Advisory Committee on Insur-ance to provide guidance to the newFederal Insurance Office created aspart of federal Wall Street reforms.Half of the committee’s members willbe reserved for state and tribal insur-ance regulators; other members will bechosen from the various insurance in-dustries, the agent and broker commu-nity, public advocates and academia.

Allstate looks to change a down-ward trend. Allstate’s acquisition ofEsurance (and Answer Financial, aninsurance quote service) from WhiteMountains Insurance Group is widelyviewed as a good move for the insurer,which has seen its marketshare dropthe past two years. The buy shouldhelp Allstate, as the country’s second-largest auto insurer, better competewith No. 3 GEICO and No. 4 Pro-gressive which, like Esurance, sell di-rectly online and which have beengaining marketshare ground as All-state has faltered. GEICO’s 5 percentgrowth in total premiums last year

puts it on track to catch Allstate (ifAllstate’s rate of decline in recentyears continued) by 2013.

Esurance, founded in 2005, sellspolicies in 30 states and has seen itstotal premiums grow on average by 20percent a year for the past five years.

Anti-texting effort continues.With Indiana recently becoming the32nd state to approve insurer-sup-ported bans on texting-while-driving(Pennsylvania lawmakers are consid-ering a similar ban), State Farm offersa free widget for the Android phonethat it hopes will help drivers avoidthe urge to read or send a text whilebehind the wheel.

The “On the Move” widget al-lows users to compose and reload cus-tomized messages—such as, “I can’trespond right now because I’m driv-ing”—that are sent as automatic re-sponses to incoming text messages.

Collision repairers needn’t beoverly considered with such efforts,however. Research by the HighwayLoss Data Institute showed last yearthat accident rates aren’t reduced bylaws prohibiting drivers from tex-ting or from using hand-held cellphones.


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by Janet Cheney

What happens when two brainiacsspend time together? At AutocraftBodywerks in Austin, Texas the resultswere a custom Light Inspection Tun-nel, used to find defects in the paintingprocess and perfect the standard oftheir work in this high end collisionrepair facility. Owner John Borek andhis IT guy, Dan McLaughlin, of NextTechnologies, designed and built thisLight Inspection Tunnel.

The Light Inspection Tunnelcame about through John Borek’s con-tinual quest for improvement in hisbusiness. He believes that if OEM’sare manufacturing automobiles, andcollision repairers are in the businessof remanufacturing automobiles thencertain technology should apply.Borek realized it was becoming moredifficult to find imperfections in refin-ish. He also recognized the challengesfor paint buffers to reach the lower halfof refinished panels to properly cut andpolish cars. He thought through theprocess; how do the manufacturersbuild, refinish and examine the cars?

A Light Inspection Tunnel, simi-lar to the OEM’s would work well inthis high end collision repair center,helping deliver customer perfection.

The information Borek was look-ing for was not available from the man-ufacturers, (tunnel lighting technologyis not revealed to the public), so he de-veloped a plan. He went to iTunes anddownloaded all National GeographicChannel’s ‘Ultimate Factories’ andstudied the auto manufacturer seg-

ments. He joined SAE, the Society ofAutomotive Engineers, and exten-sively researched and found several ar-ticles on automotive paint defects and

paint inspection lighting. Informationfrom various sources were gleaned toperfect the project. Borek found manyarticles on the subject, one written byCharles Lloyd, “An Objective Meas-ure of Severity for Small Topographi-cal Defects in Automotive Paint,” whoworked with Ford Motor Company. Hefound Ford has done extensive researchon paint inspection lighting and has im-plemented by managing and measuringthrough baseline tests.

After a careful and long discoveryprocess, The Light Inspection Tunnelat Autocraft Bodywerks started tocome together, taking over a year todesign and build.

Everything was custom designedand built to order. Nova Verta USAbuilt the frame of the inspection tun-nel. LDPI Lighting Solutions designedand built the lights, which include mir-rors in the lights, delivering the tech-nology for defect free refinish. TheTunnel is controlled by a computerizedlow voltage touch-screen panel de-signed by Next Electronics. It also hasa 3 foot lift built into the floor to bringthe cars to a better position for inspec-

tion, buffing and polishing. The fin-ished product is working well in thisshop and is also a handsome piece ofengineering and does what it was de-signed to do—deliver the best productto Autocraft Bodywerks customers.

Autocraft Bodywerks is a well es-tablished Austin, Texas collision repaircenter. They specialize in Lexus andHonda, however, work on all models.The quality of repair and customer serv-ice at John Borek’s shop is First Class andthe distinctive offering of the Light In-spection Tunnel is a tool used to deliverthe best repair to his valued customers.

The Light Inspection Tunnel is justone of John Borek’s innovative cre-ations. If you drive by his house duringthe Halloween season you will see a lifesize flying saucer that looks like it ‘justlanded’ and Klatu from ‘The Day TheEarth Stood Still’ will be stepping outto join the Trick or Treaters.

Borek, who has been in the busi-ness since high school in 1984, is aninnovator and ongoing student of col-lision repair, “Everyday I learn some-thing, when you think you know it allis when you need to get out.”


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Inspector Gadget—Making a Custom Light Inspection Tunnel to Find Paint Defects

The Light Inspection Tunnel designed by JohnBorek, Autocraft Bodywerks in Austin, Texas

In my neighborhood, several shops aresaying they’re having a “summerslump.” Maybe it’s the economy.Maybe people have gone on vacationignoring needed repairs. With gasprices sky high people are driving lessand having less accidents. Whateverthe case, it can come down to less busi-ness for the moment. What can a shopowner do to survive this down time?

Perhaps one bright spot is all ofthis is the fact that with less jobs to do,you may have more time to improvemarketing and sales and maybesqueeze more profits out of the jobsyou do get. This could be an ideal timeto take a closer look at previous esti-mates (and estimators) to see if rev-enue and profits were slipping throughthe cracks. Today we have computersoftware to go through an estimate tofind missed opportunities for revenue,but not every shop uses it, or takes thetime to use it even if it’s available. Pe-riodically a wise manager will reviewa few estimates to see how his or herestimators are doing. A summer slumpcan be a perfect time to get this done.

When business is slow, less moneyis coming in. It’s also a good time tolook for costs that can be cut withoutharming the bottom line. Since person-nel pay is usually the largest expense ata shop, laying people off is often thefirst choice in cost cutting, but it maynot be the wisest. Cutting back on ad-vertising and marketing during a slowtime is not a good idea, but this can bea good time to get more bang for your

marketing buck. Today Yellow Pagelistings and ads are outrageously ex-pensive—unless they’re really bringingin customers. One shop did an inven-tory of Yellow Page ad responses to seehow many calls actually produced busi-ness. The largest percentage of callswas from vendors trying to sell the shopsome service or product. Hardly anycalls produced even an estimate. This isa good place to start cutting costs.

Another area to examine whileyou have the time is closing ratios.How many estimates are resulting inwork orders? Are your estimators cap-turing every possible job? I recall oneshop I visited that often had a poten-tial customer walk through some se-lected areas of the shop to look athighly precise repair operations likeframe measurement and color match-ing. I was told that a little sales talk onthe superiority of the shop’s expertiseoften convinced the customer that thiswas the best place to leave the car forrepairs. This down time could also bea good time to get a couple of displayareas highly polished for customerviewing.

Reviewing prior marketing ef-forts may also produce some unex-pected opportunities. One shop I visithas repaired police vehicles for years,but he says when the sergeant incharge of repairs changes, there is al-ways a danger of that individual hav-ing his own favorite repair facility.Losing that repair business could bevery costly so he makes it a top prior-

ity to get to know a new sergeant im-mediately. A change in personnel atany key business source can representeither a danger of loss or an opportu-nity for gain. During this summerslump there may be time to call onsome dealerships, commercialprospects or potential governmentagencies to get to know the person re-sponsible for outsourcing vehicle re-pairs. It can be a good time to makechange your ally.

Another good use of extra timecan be checking out your neighbor-hood for ways to get more visitors toyour shop. Schools, churches, healthclubs and gyms and other organiza-tions where a substantial number ofpeople come can provide an opportu-nity to host an event at your shop. Oneshop offered a teacher at a churchschool an opportunity to bring herclass to the shop for an educationaltour to see what collision repair is like.

Many shops have a large open spacethat isn’t used on a Saturday or Sun-day afternoon. Offering a space for abake sale or group meeting can getlocal people familiar with the shopand its activities. Most people preferto patronize a familiar business.

Another way to benefit fromchecking out your neighborhood isnoticing what signs are eye-catching.Many business owners are proud oftheir display efforts and would bewilling to share information on whatsigns and displays have been most ef-fective for bringing in new customers.Although these are reaching cus-tomers for a different kind of business,the odds are good that this informationmay open your eyes to a new way toreach local people. It’s unlikely youwould ever try these outreach effortswhen business is good, but taking ad-vantage of this time to reach out mayhelp you survive the “summer slump.”


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Kia To Boost Capacity At West Point, Georgia PlantKia Motors Corp. said June 2 it willincrease the production capacity of itsWest Point, GA, assembly plant by20%, to help the company keep upwith demand for its vehicles, accord-ing to the Wall Street Journal.

The Korean car maker says itwill begin expansion projects at itsGeorgia factory that will raise its totalannual capacity to 360,000 vehiclesby the beginning of next year.

The boost follows an announce-ment earlier this year at the New YorkInternational Auto Show that the au-tomaker would begin producing itsOptima mid-size sedan at the US plant.

The planned expansion includesthe plant’s stamping, welding, paint

and general assembly shops.The expansion will make room

for the 2012 Optima to join the com-pany’s Sorento crossover utility vehi-cle which is already built at the plant.

Kia and its parent companyHyundai, who have long fought to betaken seriously by rivals and con-sumers in the US, have hit their stridewith efficient attractive and desirablevehicles that appear to be bargainscompared with competitors’ products.

The company has also been ableto step ahead of other foreign au-tomakers due to the shortages ofJapanese vehicles resulting from theMarch earthquake and tsunami in thatcountry.

How to Survive a Summer Slump

Custom Cornerwith Rich Evans

On Creative Marketingwith Thomas Franklin

Action Countswith Lee Amaradio Jr.

with Sheila LoftusYour Turn

Opinions Countwith Dick Strom

Shop Showcasewith Janet Chaney

Industry Overviewwith Janet Chaney

Industry Interviewwith Janet Chaney

Industry Insightwith John Yoswick

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

sions, without agreement to take con-certed action.

Please note that in these excerpts,“Exchange” refers to Farmers Insur-ance, and “Vendor” refers to the DRPrepair facility:

5.2 DISPUTED AMOUNTS. If Ex-change in good faith disputes any por-tion of a Vender invoice (“DisputedAmount”), Exchange will timely payVendor for the undisputed amounts ofthat invoice. Unless otherwise specifiedby federal or state laws, statutes, codes,rules, or regulations, within thirty (30)days of receipt of an invoice from Ven-dor on which a Disputed Amount ap-pears, Exchange will (i) notify Vendorin writing of the specific items in dis-pute; and (ii) describe in detail Ex-change’s reason for disputing each suchitem. Within thirty (30) days of Ven-dor’s receipt of such notice, the Partiesagree to negotiate in good faith to reachsettlement on any items that are the sub-ject of such dispute. Vendor will not ter-minate this agreement on the basis of an

alleged breach involving Exchangesfailure to pay a Disputed Amount un-less the Disputed Amount exceeds fif-teen percent (15%) of the total amountpayable under this Agreement or thesum of twenty five thousand dollars($25,000), whichever amount is greater.

(SCRS Note: DRP facilities wouldseemingly have agreed that the carriercan dispute their charges 30 days afterthey are invoiced, and the repair facil-ity can’t terminate their agreementbased on a breach of contract if they failto pay unless it is a $25k short-pay.)

11.4 Vendor shall ensure that its GeneralLiability, Workers Compensation,Garage Liability, Coverage for GarageOperations, and Physical Damage insur-ance policies allow Vendor to waive itsrights of recovery prior to a loss and thatthe carriers furnishing such insurancepolicies shall be required to waive allrights of subrogation against Exchange,its officers, agents, employees, and othervendors and subcontractors. To the ex-tent permitted by law, Vendor shall looksolely to its insurers and not to Ex-change’s insurers for loss or damagearising from Exchange work performed.

(SCRS Note: How many business car-riers will allow their clients to waivetheir rights in this manner through thisagreement? Will a collision repair busi-ness still have coverage if they signthis? How many of the shops have takenthe time to forward this provision totheir carriers to ask if they approve oftheir unilateral waiver of rights to sub-rogate against the carrier in question?What if a staff re-inspector injuresthemselves on the shop property due totheir own negligence? It appears plainand simple; the liability falls on theshop for their repair approach andchoices.)

12. MOST FAVORED CUSTOMER.During the term of this Agreement, ifVendor enters into a written contractualrelationship with an insurance companyor organization pursuant to which (a)Vendor provides services substantiallysimilar to those provided to Exchange,and (b) Vendor provides pricing orother commercial terms that are morefavorable than the pricing or commer-cial terms being provided to Exchangefor work performed by Vendor, thenVendor shall offer to Exchange in writ-ing, within thirty (30) days of Vendor

entering into such agreement, the sameor better pricing and/or commercialterms to Exchange. On a quarterlybasis, Vendor shall provide a writtencertification executed by an officer ofVendor of Vendor’s compliance withthis Most Favored Customer provision.

(SCRS Note: “Most Favored” pricinglanguage is currently being challengedin the healthcare industry. Is it interest-ing that the repair industry is constantlyasked to be “competitive” and thosesame parties now want the industry toguarantee pricing given to anotherparty, which by virtue is not competi-tion.)

16. SUBCONTRACTING16.1 (ii) Sublet repairs reflecting a re-tail price within the local market shouldbe written without a mark-up. Subletitems reflecting a wholesale price maybe considered for a mark-up not to ex-ceed 25% of the sublet charge. All in-voice mark-ups combined may notexceed $200 for the entire repair.

17. INSPECTION OF BOOKS ANDRECORDS. Vendor agrees to maintain


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and preserve its books and records inaccordance with generally accepted as-sounting procedures (“GAAP”) for aperiod of three (3) years or for a longerperiod if required by applicable law orregulation. Any time prior to the termi-nation of this Agreement and for a pe-riod of two (2) years thereafter,Exchange shall have the right to inspectand audit such portions of the Vendor’sbooks and records as is necessary forpurposes of verifying amounts payableto Vendor or its authorized subcontrac-tors and to verify compliance with theterms and conditions of this Agreement.Vendor agrees to make such books andrecords available for inspection by Ex-change, its designee, or any insuranceregulatory authority immediately uponrequest.

(SCRS Note: Are business owners, will-ing to open internal accounting booksto a party outside of the business?There are concerns voiced regularlythroughout the industry regarding datathat is shared through electronic mech-

anisms. Now this program appears torequire businesses to open up all theirbooks, P&L statements and proprietarybusiness information to another party.)

27. BACKGROUND CHECKS.27.2 In no event will Vendor in the per-formance of this Agreement use theservices of an individual who has beenconvicted of a felony, including but notlimited to any convictions involvingdishonesty, a breach of trust or moralturpitude.

(SCRS Note: Language in this sectionis similar to requirements in other pro-grams, requiring complete backgroundchecks, and no shop can employ indi-viduals who have ever been convictedof a felony; in some states that maymean a DUI. How many of businesseshire good, decent employees—from de-tailers, technicians to office staff - whomay have made mistakes in the past, buthave earned their employers trust andrespect for the work they do today? Is itnecessary to allow another party to in-terject who is employed in a privatelyrun business? Is the requirement recip-rocal to the representatives who will in-terface with repair facilities in the

field?)There is lots of information in this

agreement. SCRS’ decision to release alink to this document is in no way to beconstrued as legal or ethical advice or

opinion; however, it is our hope that theindustry finds the information useful inmaking educated business decisions,and discusses the material responsibly.

— SCRS Staff


Farmers COD DRP

South Korea’s antitrust regulator hasbegun a probe into allegations thatHyundai Motor Group forced its autoparts suppliers to lower product prices,a person familiar with the matter saidJune 9 according to the Detroit News.

The Fair Trade Commission thismonth visited the offices of HyundaiMotor Co., Kia Motors Corp. andHyundai Mobis Co. after sending thecompanies, all members of theHyundai Motor Group, notice of theprobe, the person said.

It wasn’t clear which auto partsand which suppliers are involved.Hyundai Motor Group, the world’sfifth-largest car maker by sales, de-clined to comment.

Hyundai Motor and Kia Motorsusually have price-setting negotia-tions with around 2,000 subcontrac-tors twice a year.

Given their size, Hyundai andother South Korean conglomerateshave enormous leverage in setting

prices during negotiations with theirsubcontractors.

Last month, a Seoul court uphelda decision in 2006 by the Fair TradeCommission to fine Hyundai Motorabout 1.6 trillion won ($1.48 billion)for forcing its parts suppliers to re-duce component prices.

The antitrust watchdog’s latestmove comes as the government is ex-pected to place more emphasis onsupporting small and midsize compa-nies, many of which continue to ex-perience tough times even as thenation’s conglomerates power thecountry out of the 2007-2008 globalfinancial crisis.

With South Korea recoveringquickly from the crisis, President LeeMyung-bak, whose five-year singleterm ends in early 2013, has urgedSouth Korea’s conglomerates to try toshare the “warmth of the economic re-covery” with their smaller peers andprosper together with them.

Hyundai, Kia Face South Korean Fair Trade AntitrustProbe on Auto Parts Pricing After Allegations


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When William Penn gave Philadel-phia its motto as the City of Broth-erly Love, he wasn’t thinking aboutauto body shops. It was 1682 afterall. But I don’t know of any otherbusiness in Philly that has embracedthat motto to the degree that Nigro’sAuto Body has. Located at 939 Wash-ington Ave, Nigro’s Auto Body hasalways felt the importance of givingback and fostering the communitythat surrounds them.

This shop continuously proves itsdedication to community by donatingtime, money and energy to improvethe daily lives of their customers,

neighbors and the city in general.Aniello Nigro founded Nigro’s

Auto Body in 1983 after working atseveral local shops and deciding toprovide customers with the qualityworkmanship he had learned while anapprentice at his uncle’s shop in Flo-rence, Italy. He adopted his ownmotto: “Old World Craftsmanship,New World Technology.”

Aniello had an auto body shop ata smaller location for about sixmonths before moving to his currentlocation on Washington Avenue. Hisson and co-owner of the shop,Domenico Nigro, tries to follow thesame code of standards and ethics ashis father. His goal is not only to makehis customers happy but also to pro-vide them with knowledge about theirautomotive repairs, including a life-time guarantee on the work done at hisshop.

Domenico Nigro explained thatthe shop’s goal is to help the industryand provide customer satisfaction, andhe believes one important way to dothis is by helping people and dissemi-nating information to other shops. Byshowing customers that they care,Nigro’s plans to build their brand by

helping people so customers knowthey can trust the shop to do what isbest for them and their vehicles. Byuniting with other shops, even nation-wide, difficult situations become sur-mountable as another shop hasencountered it and can share their ex-perience, whether it be a technical, in-surance or customer situation.

Nigro’s Auto Body is very activein their community in Philadelphia.Besides donating money to manycharities, such as the Childrens’ Hos-pital of Philadelphia (CHOP) andthrough setting up fundraisers forHoly Spirit Church and their PadrePio Foundation, they also contributeto Italian-American organizations,churches and rehabilitation centers.One such center is De La Salle Voca-tional for youths on probation whereNigro’s assists with revitalizing theauto body program in particular aswell as participating in the program ingeneral.

The family has also establishedthe Nigro Family Foundation whichbenefits women, children and rehabil-itation. Nigro’s takes the consumersneeds seriously, becoming one of thefirst shops with “Green Technology”and most recently, becoming an ‘AskPatty’-Certified Female FriendlyShop.

Recently, Nigro’s Auto Bodybegan selling AutoTex Pink wiperblades which allow customers to fol-low the shop’s example of giving backas the proceeds benefit the National

Breast Cancer Foundation. The bladesalso have a motto: “Change A Bladeand Change A Life.”

The shop participates in fundrais-ers and charity walks, as well as vari-

ous food, phone and blood drives.They also are in the process of estab-lishing sponsorship for annual awardsfor those who help the community and

are often underappreciated, such asteachers, firefighters, police, doctorsand so forth, in addition to offeringscholarships for children’s education.Experts at restoring antique and exoticcars, the shop has also contributed ef-forts to restoring vehicles for theSimeone Foundation Museum.

Additionally, the shop workswith a company to install equipmentfor disabled drivers, and the proceedsof this effort are donated to the Bon-nacotti Fund. The shop has received acar seat certificate from Safe Kids sothey can teach parents how to properlyinstall their child’s car seat, and theyplan to participate in a Child Safetyprogram with CHOP to test car seatsas well. They are also involved withthe Boy and Girl Scouts, allowingchildren to earn auto body badges atthe shop. Nigro’s hosts an Ask Patty-certified course to teach women abouttheir vehicles, as well as driving safetyclasses.

They are also currently develop-ing three phone applications. The firstallows the user to contact medicalcare, the police and emergency con-tacts as well as sending informationdirectly to the insurance company tohelp process their claim and show li-ability in case of an accident. Theother two applications are focused onteen driving safety; the first monitorsspeed and emails parents speed andlocation information when the teenexceeds a specified speed limit, andthe second blocks teens from texting

while driving, responding to incom-ing calls and texts that the recipient isdriving and will return the call whenavailable.

Nigro’s also reveals a feeling ofresponsibility toward the environ-ment. Besides being one of the firstshops in the area to go green, they alsosell Passchal handbags which aremade from recyclable materials, theproceeds of which benefit the UnitedWay, DuPont Hospital and the NigroFamily Foundation. They participatein the effort to preserve nature by re-cycling everything possible, includingmetals, plastic and fiberglass. Theyalso use Sikkens waterborne paints,by AkzoNobel, and they are currentlyin the process of researching how theycan adopt solar energy power sources.

The shop shows that they care forall aspects of the customer’s well-being by offering auto financing anda deductible program to help savemoney.

Additionally, the shop is workingon participation in a third-party pro-gram called Don’t Pay Us to Fix YourCar which basically allows cus-tomers, subject to credit approval, touse their insurance check to pay offhigh-interest, long-term debt, givingthem up to a year to repay the loanwithout interest for a small upfrontfee.

Visiting the shop’s website, po-tential customers can see further evi-dence that Nigro’s Auto Body trulycares about their needs. The site offersinformation about their many pro-grams as well as resource articles withuseful information such as the steps to

Nigro’s in Philadelphia Exemplifies the City’s Brotherly Love Motto

with Rick WhiteShop Management

with Stefan GesterkampPaint Management

with Gonzo WeaverGonzo’s Toolbox

with Richard ArnoldJobber Journal

with Dale DelmegeAsk Dale

Mainstream Media

Automakers’ Actions and Analysisby Autobody News Staff

Shop Showcaseby Autobody News Staff

with Ed AttanasioShop and Product Showcase

with Ed AttanasioConsumer Callout

with Walter DanalevichShop Strategies for Savings

with The Insurance InsiderInside Insurance

with Ed AttanasioCustom Corner

with Chasidy Rae SiskCompany Connections

with Chasidy Rae SiskNortheast News

with Chasidy Rae SiskShop Showcase

with Erica SchroederShop Showcase

with Erica SchroederShop Snapshot

Chasidy Rae Sisk is a freelance technical writer from Wilmington, Delaware, whowrites on a variety of fields and subjects, and grew up in a family of NASCAR fans.She can be contacted at [email protected].

(left to right): Joseph Coulter, Aniello Nigro, Domenico Nigro & Raffaelle Mele

AutoTex’s PINK Wiper Blades, on sale atNigro’s, benefit the National Breast CancerFoundation. For more information, visitwww.autotexpink.com or call (800) 692-3962

See Nigro’s, Page 38


URG, the United Recyclers Group,hosted a Body Shop Panel Discussionat their 2011 annual conference in En-glewood, CO, April 15. A lot of com-mon ground was discovered in thisURG panel discussion, which was ac-knowledged by everyone in the room.The hour-long panel discussion waseffective in its goal of honest dialoguediscussing needs and opportunities be-tween these two industries. All stake-holders want to do better business andthe repairers and recyclers would like

to do business better, together. Over800 recyclers attended the two-dayevent.

“We have grown (our indus-tries) together from mom and poporganizations to the large conglom-erates we are today,” said ClarkPlucinski, Executive Vice-Presidentof Sales and Marketing at True 2Form—which recently became apart of the Boyd Group/Gerber col-lision repair chain. Plucinski re-minded everyone in the room that“We are now all inter-connected inbusiness-to-business relationships.”In resolving difficulties, Plucinskiasked for patience. “These processesare working, but it is like pushing arock up a hill [which keeps rollingback]. We just have to be patient andkeep doing the same thing.”

Gary Boesel, owner and operatorof two CARSTAR collision repaircenters in the Denver area, concurred.“[Things have evolved] over the yearsand are different than they used to be,”

saying that somewhere, somehow,collision repairers and recyclers quiteffectively communicating.

Facilitator Don Porter, of StateFarm Insurance opened up the discus-sion, asking panelists to introducethemselves and say a little about theirbusiness. Porter made sure the audi-ence of recyclers was involved, say-ing “You don’t have to be nice tome—just be nice to these people,” re-ferring to the collision repairer pan-elists.

Everyone on the panel shared al-most the same story about the ‘condi-tion’ of parts and on-time deliverydates. In today’s collision repair mar-ket, shops are measured (by insurers)by what proportion of alternative partsthey use, cost effectiveness, and mostimportantly—cycle time. Cycle timewas recognized by this panel as themost critical component in their busi-ness operations today. If a used part isdelivered to a shop that is expectingan undamaged part and they receive apart with undisclosed damage, that isa significant cost to everybody.

Bill Abold, of A&P Auto Recy-cling in Cicero, New York, shared thefrustration he and other recyclers ex-perience. “We work with our collisioncustomers, train our staff, but whenparts are found electronically and theprice is the lowest common denomi-nator, then the shop is going to get thatcheapest part and they are not goingto accept it. We then have to workthrough the price difference with the

shop and the insurance company. Thatdoesn’t work for anyone.” This state-ment triggered an ovation from the300 attendees in the room.

There is the beginning of a solu-tion available that could reduce the‘condition’ problem. The AutomotiveRecycling Association, in concert withCIECA, has developed a standard setof damage codes to be used by repair-ers and recyclers. They are establishedand accepted, through CIECA, byboth industries. However, the panel

came to the conclusionthat no one is usingthem.

The participatingpanelists, who repre-sent a very large seg-ment of the collisionindustry, reported thatthey found no one ac-tually using the dam-age codes and fewpeople knew aboutthem. Repairers notedthat condition codes onparts found throughthird party locaters hadno meaning to them atall. The Damage Codeinformation discussion

was positive for both groups, recog-nizing that they have something towork towards.

Gary Wano, owner/operator ofG.W. and Son Auto Body in OklahomaCity, OK, said, “Have a little patiencewith us please, sometimes our conceptof a usable part may be different thanyour sales staff’s, but we are workingon this.”

Tim Adelman, Executive VicePresident of Business Developmentfor ABRA Auto Body and Glass,shared these first quarter 2011 statis-tics from 100 ABRA locations. On ascale from 1–10, 10 being the highest,measuring overall CSI, OEM scored 9and Recyclers scored 7.5. For overallquality of parts received, Recyclers:7.4, Accuracy of the Part, Recyclers:8.2 and On-Time Delivery, Recyclers:6.8. “We survey parts people for sup-plier improvement opportunities,” ex-plained Adelman.

For the shops on the panel, rela-tionships with a good quality recycler

was the most important criteria. Shopsare looking for a good product andwant it to be delivered on time. “Thegoal at our shop is to spend less timeon the phone and on email,” said DanStander, General Manager of FixAuto Highlands Ranch. “It is moretime effective and we don’t have anyconfusion about descriptions.”

The formal panel ended but dia-logue continued throughout the hallsmost of the day. Bob Jones, owner-op-erator of R Jones Body Pros, in DesMoines, Iowa, put it succinctly, “Youguys want to sell us the correct partand we want to buy the correct part.”

The inter-industry communica-tion initiated at the April meetingshould help collision repair and autorecycling industries start working forthe common goal: better business foreverybody.

More on the Panelists’ CredentialsThe credentials of the panelists broughttogether by the URG was impressive.

In 2010, Boesel was selected asSmall Business Person of the Year bythe Aurora, CO, Chamber of Com-merce and he sits on the CARSTARNational Advisory Board.

Wano’s family owned business isa Mercedes Benz, Jaguar, and VolvoCertified shop. He is Immediate PastChair of the Society of Collision Re-pair Specialists (SCRS) and in 2008was Body Shop Business’ Executiveof the Year.

Dan Stander is ASA’s NationalCollision Division Director.

Both Bob Jones and Clark Plu-cinski are Collision Industry Confer-ence, “Hall of Eagles” members.

Jones is a founding member andpast Chairman of SCRS. Plucinskiserves on numerous Industry Boards andwas voted Body Shop Business’ Colli-sion Shop Executive of the Year in 1996.

Tim Adelman now leads ABRA’sindustry relations and serves on nu-merous industry advisory boards.

Auto Recyclers Host Prominent Collision Repairers in Panel Discussion

Custom Cornerwith Rich Evans

On Creative Marketingwith Thomas Franklin

Action Countswith Lee Amaradio Jr.

with Sheila LoftusYour Turn

Opinions Countwith Dick Strom

Shop Showcasewith Janet Chaney

Industry Overviewwith Janet Chaney

Industry Interviewwith Janet Chaney

Industry Insightwith John Yoswick

Janet Chaney has been involved in the collision industry as shop owner and businessconsultant. She serves her clients through Cave Creek Business Development.Contact her at [email protected].

United Recyclers Group hosted its first Auto Body Panel Discussion in April: (l-r) Facilitator, Don Porter, State FarmInsurance; Gary Boesel, CARSTAR, Denver, CO; Gary Wano, G.W. and Son, Oklahoma City, OK, Dan Stander, FixAuto, Jerry Standers Collision; Bob Jones, RJones BODYPROS, Des Moines, IA; Clark Plucinski, True 2 Form/Ger-ber; Tim Adelman, COO ABRA Body and Glass


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take if involved in an automobile ac-cident and how to save money on gas,among others. Adding to the site’scomprehensiveness is the option oftranslating it into English, Spanish orItalian, the three languages spoken inthe shop.

Though Nigro’s typically utilizesstandardized equipment, such as MIGwelders, a Chart frame machine andmeasuring systems, one unique pieceof equipment that they rely on is theirhandmade downdraft spray booth.Aniello Nigro hand-crafted his boothusing a design from his uncle’s shopin Florence, Italy.

The inside of the booth is coveredwith white ceramic tiles, and accordingto manager Wayne Simmons, their“multi-filter downdraft design providesa perfect airflow, virtually eliminatescontaminants, and is heated for bakingfinishes, basically allowing our painterto create near-flawless finishes.”

Nigro’s Auto Body employs sixworkers and encompasses 3000

square feet where they complete ap-proximately twenty-five cars eachmonth. The shop has been certified I-CAR Gold, and by PPG, ASE, ASA,BASF and ADP, in addition to beingEsco Institute EPA Certified. In addi-tion to auto body work, Nigro’s alsoengages in some towing and accident-related mechanical repairs.

Domenico Nigro concedes that thisis one of the toughest times he has seenin all the years of Nigro’s existence. Theeconomy, price of parts, tougher insur-ance and adjuster relations and regula-tions, combined with customer demandsand the technology of the automobilesall add up to tough times.

However, Domenic maintains itdoes not all have to be doom andgloom. He has compiled several pam-phlets specifically for fellow shopowners and is very willing to sharethem along with other thoughts, ideas,and questions.

He urges shop owners to contacthim by email at [email protected] and place Body Shop MagazineArticle in the subject line. He regrets thatphone calls cannot be handled due tovolume.

Nigro’s is determined to helpunite the body shop industry and sharesome of the wealth of informationthey have gleaned from doing busi-ness throughout the decades.

Nigro’s Auto Body939-41 Washington AvenuePhiladelphia, PA 19147215-925-0910www.nigrosautobody.com


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More than 2,000 volunteers at 140 ofCARSTAR's stores across the US andCanada washed cars to raise funds forthe Make-A-Wish Foundation® andKids with Cystic Fibrosis.

On June 11, thousands of volun-teers across the United States andCanada washed vehicles atCARSTAR locations in hopes ofbreaking the Guinness World Recordfor “Most Cars Washed – MultipleVenues” the franchise set in 2009 bywashing more than 4,000 vehicles ineight hours. In the process,CARSTAR hoped to raise funds tohelp grant wishes for the Make-A-Wish Foundation of America andserve children with cystic fibrosis inCanada. Themed “Wash for a Wish”,the third annual Soaps It Up! CarWash was held on June 11, 2011 andtickets were sold at participatingCARSTAR stores in the U.S. for $10,with 100 percent of the ticket pur-chase benefiting the selected charities.

While stores across North Amer-ica participated, the host for therecord-breaking attempt was atCARSTAR Collision Care of Milford,OH, owned by Cincinnati nativeKeith Foster. The repair facility, lo-cated at 731 State Route 28, in Mil-ford, OH, held special eventsthroughout the week in Cincinnati and

led the countdown on washing the carthat broke the record.

“Over the first two years, theSoaps It Up! Car Wash has been ableto unite the CARSTAR family acrossNorth America to help thousands ofchildren in need,” said David Byers,CEO of CARSTAR Auto Body Re-pair Experts. “Now, we are ready tocontinue the tradition and make the“Wash for a Wish” Soaps It Up! CarWash the biggest and best ever. Wewant to break our Guinness WorldRecord for world’s largest car wash –and bring even more support for theMake-A-Wish Foundation®.”

“We’re grateful that CARSTARis doing so much to help us improvethe quality of life for our wish kidsand their families through a wish ex-perience,” said David Williams,Make-A-Wish Foundation of Americapresident and chief executive officer.

CARSTAR stores in Canadahave been conducting the “Soaps ItUp!” Car Wash for the past sevenyears, and this is the third time theprogram has been done in the US. The2009 event was the first attempt forany group to set the record for thelargest car wash across multiple loca-tions. For more information on the“Soaps It Up!” Car Wash, visitwww.CARSTAR.com.

CARSTAR Auto Body Repair Experts Hold Third AnnualSoaps It Up! Car Wash for Make-A-Wish Foundation


Nigro’s


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autobody news july 2011 southwest edition

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