Aftermarket collision parts

PARTS Act Hearing

From Repairer Driven News – RDN

The Courts, Intellectual Property, and the Internet Subcommittee of the House Judiciary Committee last week was weighing the PARTS Act, sponsored by Chairman Darrell Issa, R-Calif. The latest iteration of the law would prevent automakers from enforcing design patents on the appearance — but not the function — of replacement parts after only 30 months instead of the 15 years available today.

Click here to read more on the hearing

NISSAN INTRODUCES CERTIFIED COLLISION NETWORK CONSUMER REFERRAL PROGRAM

PRESS RELEASE

NASHVILLE, Tenn. (November 7, 2014) – Nissan today announced major new enhancements to the Nissan Certified Collision Repair Network program, launching a consumer-focused referral initiative that ties Nissan vehicle owners with Nissan Certified Collision Repair Providers.

To enhance relationships between Certified Shops within the network and Nissan Owners, Nissan North America is launching the first of its kind On-Demand-Marketing (ODM) tool. The tool simplifies marketing for certified shops through a one-stop-shop process that grants them access to Nissan owners geographically. Now, Nissan Certified shops can send marketing messages via mailer or email promoting their certified shop location directly to Nissan owners. The new marketing tool helps Certified Shops build awareness in their market.

The Nissan Collision Repair Network combines Collision Shop Certification, consumer awareness and education elements, along with shop locators to ensure that Nissan customers can locate the Certified repairer wherever and whenever they might need one. This program assures that Certified collision shops have the right tools, equipment, training and facilities to repair Nissan vehicles to the company’s exacting specifications for fit, finish, durability, safety and value.

“In some cases, Nissan customers have endured a collision repair experience – and the resulting repairs – that have been controlled by third parties who don’t necessarily have the customer’s best interests in mind,” said Mark Zoba, Collision Parts Manager, Nissan North America. “Nissan values our customers and is willing to do whatever we can to enhance our customer’s experience. With this program, Nissan is addressing this critical issue by assuring their vehicle drivers are able to select certified shops that are able to properly and safely repair Nissan and Infiniti vehicles.”

Nissan has teamed up with Assured Performance, a non-profit consumer advocacy organization and the third-party administrator for OEM Certification-Recognition programs.

Working jointly with Assured Performance to determine certification practices, the Nissan Certified Repair Network program is ongoing with focus on identifying and completing certification of the best-in-class body shops across the U.S.

“Nissan’s bold customer referral program is the ultimate payoff for shops who are willing to reinvest in their business and retool and train to ensure they are able to properly repair the new generation of vehicles being introduced by all of the major automakers,” said Scott Biggs, CEO, Assured Performance. “This is a positive step for the entire industry. No business or person should be able to touch a vehicle if they are not equipped and trained to do it properly, and customers and insurance companies should not be paying for substandard work.”
About Nissan North America
In North America, Nissan’s operations include automotive styling, engineering, consumer and corporate financing, sales and marketing, distribution and manufacturing. Nissan is dedicated to improving the environment under the Nissan Green Program and has been recognized as an ENERGY STAR® Partner of the Year in 2010, 2011, 2012, 2013 and 2014 by the U.S Environmental Protection Agency. More information on Nissan in North America and the complete line of Nissan and Infiniti vehicles can be found online at www.NissanUSA.com and www.InfinitiUSA.com, or visit the Americas media sites NissanNews.com and InfinitiNews.com.

GM’s New Parts Pricing Initiatives

Many of you may have heard about GM’s new parts pricing initiatives that were announced last week during SEMA. You may also have heard that the program has been temporarily halted. Below is the updated statement from GM. What I can tell you is that SCRS has been in contact with them much in the past week+ and are currently working on summarizing exactly what the program is – and what it is not. We should have that prepared shortly.

GM has been very clear that there are only three entities that are part of their focus; the repairer, the consumer and the dealers. To me, that is refreshing.

More information to come soon.

Aaron Schulenburg
Executive Director | Society of Collision Repair Specialists (SCRS)


Please direct any questions to Bob Wheeler.

Bob Wheeler
GM Communications
636-248-0064
robert.e.wheeler@gm.com

“GM remains committed to its consumer focused pricing initiative, MyPriceLink.com. The strategy is designed to provide a competitive price available when an estimate is being prepared resulting in the best possible repair for all GM vehicle owners. GM has received overwhelming interest and support for its best price forward pricing strategy from all constituents throughout the Collision repair industry. By providing our price up front in the estimating process, we continue to focus on helping our GM customer, allowing the vehicle to be returned to pre accident condition, with original parts, ensuring safety and appearance.

“Over the past week the workflow pressures on outside parties has brought to light enhanced solutions and the increased desire for integration opportunities. These efforts will improve the process and allow for a longer implementation lead time so the revised workflows can be absorbed to the benefit of all of our General Motors customers, dealers and body shops. To this end, GM has listened, and has agreed to pause and extend the implementation of MyPriceLink.com.

“In the interim GM will resume the publishing of list price until we implement MyPriceLink.com. The extended implementation time frame, allows for all parties to prepare and adjust as needed in order to begin getting GM list prices from the MPL.com price engine. We expect to have a fully functioning dynamic pricing process through MPL in market by early 2015.

“GM appreciates the interest and support MPL.com has received and looks forward to collaborating with all constituents in the collision repair industry to implement the new way in which GM list prices will be obtained.”

Ryndee S. Carney
Manager, Cross-Brand Communications
General Motors
Mail Code 482-A38-C91
100 Renaissance Center
Detroit, MI 48265-1000

313-667-7627
313-549-1524 (cell)

ryndee.carney@gm.com

State Farm Ordered to Pay Georgia Woman for Breach of Contract and Bad Faith

State Farm Ordered to Pay Georgia Woman for Breach of Contract and Bad Faith

From BodyShop Business

A Georgia state court has ordered State Farm to pay their policyholder $40,508 after a jury found the insurer had breached its contract and acted in bad faith.

The suit stemmed from the insurer’s denials and underpayment of approximately $4,000 in the costs for repairs being performed by Hernandez Collision Center in Savannah, Ga.; the shop was a witness in the case. The judgment included $5,508 for breach of contract, $5,000 as a bad faith penalty and $30,000 in attorney’s fees for a total verdict of $40,508.

“It’s refreshing to see the results in this case and know that a jury of our peers awarded Mrs. Roberts for the hardship caused by her insurer,” said April Hernandez, AAM of Hernandez Collision. “While Hernandez Collision Center gladly works with all insurers, our responsibility is to our customers to ensure all damages to their vehicle are repaired properly and thoroughly. We feel it is also our professional responsibility and moral obligation to help customers like Mrs. Roberts when they’re treated unfairly. We congratulate Mrs. Roberts on her courage and conviction and are thankful that we could help her in this endeavor.”

SCRS Examines Repairer Ability to Control Data Flow

Article details ways repairers may be able to manage how “data pumps” access file information

Many repairers are unaware of the breadth of data being extracted from their servers, where it is being extracted from, what settings they could employ to better control the flow of information, or even how that information may be used beyond its intended purpose. For years, the Society of Collision Repair Specialists (SCRS) has alerted its members about the potential risk and liability associated with inadequate control over estimate data and business information.

As one recent example, SCRS was notified of growing concerns relative to the collection of data through participation in the PartsTrader parts procurement program. As the program rolled out across the nation, more questions began to arise when end-users noticed key identifying information from non-State Farm estimate files populating their PartsTrader dashboard. The repairer concern surrounds the amount of non-voluntary information being provided through the data collection process which could offer valuable information surrounding market volume and shop volume, raising further concerns over the potential of violating agreements with non-involved carriers by sharing information with an unrelated third-party.

SCRS researched the issue with PartsTrader and each of the estimating system providers to identify the means and extent in which the data is being accessed and collected; and inquiring if repair facility end-users have options to restrict non-required data from being collected, accessed or shared. As a result of that research, SCRS issued an article outlining the resulting responses from each of the technology organizations. The article concludes that:

  • Technology has increased the ability to communicate information amongst businesses; however, the increase of applications that indiscriminately extract data in the background for unknown or unintended purposes is a concern for repairers who have obligations to protect data generated by their business.
  • There are advancements being made, or already in place, from some estimating system providers which allow collision repair facilities to maintain better control over the data files being exported from the estimating systems to other data collection sources.
  • The solutions and options for each estimating system vary, so it is important to compare capabilities of the software programs relative to features that allow greater control over unwanted data transfer, and to make any necessary profile changes in line with individual business practices.

To read the full article with responses click here.

Large Ford stores say cost of aluminum body shop will surpass $70,000

By Bradford Wernle, Automotive News

Michigan Ford dealer Ed Joliffe has been calculating the cost of getting his body shop ready for the 2015 aluminum F-150 pickup, and finds the numbers sobering.

“It’s going to cost anywhere from $50,000 to $100,000. That’s a hell of a chunk,” says Joliffe, who owns Gorno Ford in suburban Detroit.

“I don’t think it’s for the faint of heart. All the small shops won’t be able to touch it.”

He figures it could take five to seven years to recoup that investment, which he deems essential to stay in the body shop business.

Ford is targeting dealers with large body shops as it attempts to organize the F-150 aluminum body repair system. For those dealers, the investment will exceed the $30,000 to $50,000 Ford has cited for a single repair bay. Like Joliffe, many dealers say the cost could be $70,000 or more.

Ford’s effort is creating the Ford National Body Shop Network of dealers and independent shops capable — Ford shies away from the term “certified” — of large structural repairs. The network, whose members have the proper tools and training, will be Ford’s conduit for insurance company repair referrals.

Ford wants to assure customers and insurance companies that collision repair rates will be competitive with rates on the current steel-bodied truck. Those dealers and independent repair shops who invest in equipment and training can hang a Ford National Body Shop Network sign in their showrooms and will be listed on a body shop locator on ford.com.

By year end, Ford wants a network of about 1,500 aluminum-capable body shops, including its 460 dealerships and more than 1,000 independent shops.

Read the full story – click here.

 

Ford’s big aluminum show-and-tell

Ford engineer Gerry Bonanni says the construction of the 2015 aluminum F-150 will allow easier repairs. “The advantage to the technician and body shop is they have repair options they would not have had.”

By Bradford Wernle
From AutoNews.com

NADA pitch aims to reassure dealers on repair issues

It wasn’t your typical convention display: a color-coded body-in-white cutaway of the Ford F-150 pickup that looked like an oversized Fisher-Price toy.

But Ford Motor Co. was using the toy store approach to make a serious point to dealers: The economics of an aluminum truck – both the repair costs for the customer and the body shop operations for the dealer – make sense.

“We’ve made a lot of really significant changes for repairability,” Jim Farley, Ford global vice president of marketing, sales, service and Lincoln, said at the National Automobile Dealers Association convention here. “They will help save a lot of labor costs.”

For those with an engineering bent, the display provided a fascinating first look at how construction and repair of the nation’s top-selling vehicle will change with the aluminum redesign.

Read the full article at AutoNews.com

Florida Collision Repairers Seek Injunction to Stop State Farm’s PartsTrader Initiative

From CollisionWeek

Florida collision repairers, suppliers and vendors came together in Lakeland, Fla. on November 20 to discuss State Farm’s controversial PartsTrader program and identify solutions to combat “short-pay” trends in the industry.

Ray Gunder, of Gunder’s Auto Center in Lakeland, John Mosley, of Clinton Body Shop, Inc. of Clinton, Miss., along with several other Florida and Mississippi shop owners, joined attorneys John Eaves and Brent Geohagan to share their national efforts to stop State Farm’s attempts to impose a mandatory parts procurement program on an unwilling collision repair industry.

Mosley shared information regarding the recent CIC meeting at SEMA as well as discussions with State Farm’s George Avery. “The simple and clear message was, if you choose not to participate in PartsTrader, State Farm will immediately find you irrelevant,” said Mosley. “The message was clear that State Farm doesn’t care if the collision repair industry likes PartsTrader or not–they will continue to implement the program.”

“We’re in Florida with the purpose of filing an injunction to stop PartsTrader,” Eaves declared to the meeting attendees. “Our ultimate goal is to defeat this mandated parts procurement program and stop State Farm’s intrusion into the collision repair industry in Florida and across the country. We feel PartsTrader is a virus–it infiltrates and destroys long-term relationships between repairers and their suppliers–but we have the cure.”

Eaves added, “This issue isn’t just about you as individual repairers. This issue is about your responsibility to consumers around the nation who are relying upon you, the repair professionals, to look out for and to safeguard their best interests regarding their personal safety and economic wellbeing.”

Additionally, Eaves and Mosley spoke about repairers coming together and filing litigation for “Short Pays” on performed repairs. Mosley stated that their research has shown, on average, that insurance companies have shorted shops $625 to $700 on a $3,500 repair for necessary procedures. These processes included color-sand and polish, fill-block and prime, test drive, clean car for delivery, and others. The attorneys have developed a list of more than 60 necessary procedures that are commonly omitted by insurers.

“This is about taking back the monies insurers have taken from you for procedures and materials that the repair required, that you the repairers have provided, that the consumer received, and that the insurer has failed to pay for,” said Eaves. “That is considered “Unjust Enrichment” for the insurers, and our legal team is going to help participating shops get back the monies they were deprived of.”

Cathy Mills, Executive Director of the Florida Autobody Collision Alliance (FACA) announced during the meeting that FACA was in full support of efforts to stop PartsTrader.

Barrett Smith of Auto Damage Experts (ADE), who was on hand to start the meeting, stated: “There has never been a better time for repairers to step up and collectively be represented and to stop the abuses that they face every day throughout the collision repair industry. Repairers must ask themselves: If not now, when?”

SCRS Issues Position on Insurer Mandates of Vendors and Processes

The Society of Collision Repair Specialists (SCRS) has issued a position statement regarding insurer mandates. The position statement is as follows:

In representation of collision repair businesses across the United States, The Society of Collision Repair Specialists (SCRS) takes exception to business mandates that property and casualty insurers impose upon collision repair businesses; particularly those that specify required vendors, business platforms or internal processes that must be followed in order to be included in, or avoid being excluded from, certain lines of work. As an example, insurer mandates surrounding parts procurement platforms may inhibit independent collision repair businesses from utilizing parts vendors with whom they have an existing relationship, providing insurers with greater influence and control over the parts supply chain.

SCRS believes this control falls outside of the scope of the insurance business. Some insurers are stipulating agreement to these terms, as a condition of being recognized in Direct Repair Programs (DRP). SCRS supports efforts that rightfully seek to eliminate such intrusion into the collision repair business, and enforcement of existing laws, regulations and codes that currently prohibit such actions. It is the opinion of SCRS that voluntary agreements cannot include stipulations which violate existing laws, rules and regulations. SCRS believes that collision businesses are capable of establishing successful vendor relationships and internal processes that will best accommodate the needs of the consumer, and that service providers will continue to respond to the market with increasingly creative solutions that drive performance for their customers and the respective market entities. We believe that solutions with tangible value propositions will be utilized and supported by the marketplace without the undue influence of insurer mandate.

As an example of the concerns addressed by the position statement, SCRS used the elimination of the “fax-only” option in the PartsTrader electronic ordering system that State Farm’s Select Service repair facility participants are required to use. The elimination of the fax-only option effectively requires suppliers to fully participate in the electronic parts marketplace or lose business from Select Service repair shops.

According to the press release announcing the new position statement, SCRS explained, “The rules of the game are changing and it is apparent that maintaining the relationships and negotiated deals of participating repair facilities is only a priority, so long as all involved submit to do business in the manner prescribed by State Farm Insurance, and other carriers with similar programs. Today these mandates address parts sourcing and ordering, but there is valid concern that they open the door to future market manipulation and influence over other similarly critical collision businesses purchasing habits as well.”

PCI Special Report on Aftermarket Parts

In a January 2013 study from the Property Casualty Insurers of America (PCI), their own research shows that if Aftermarket parts were banned, this would result in a $24.00 overall increase in premium prices per insured car per year.

Excerpted from the report:

This PCI Special Report provides an update of the estimated cost impact resulting from the banning of aftermarket parts.

  • If non-OEM competitive replacement parts are no longer used, this may result in an additional $2.34 billion in insurance costs per year that could be passed on to drivers in the form of higher premiums.
  • The insurance premium reflecting vehicle damage coverages may increase by about 4.2 percent more per insured car. This translates into a 2.6 percent increase in the combined liability and physical damage premium per insured car if non-OEM parts could no longer be used. On average, this means about $24 added to the overall premium per insured car each year.

Is the friction, the argument and the concern over using aftermarket parts really worth $24.00 per year per insured vehicle?

Read the full PCI Special Report (PDF download)