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Antitrust, Lawsuits, Labor Rates and More Discussed at Northeast Forum

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Jason Stahl has 28 years of experience as an editor, and has been editor of BodyShop Business for the past 16 years. He currently is a gold pin member of the Collision Industry Conference. Jason, who hails from Cleveland, Ohio, earned a bachelor of arts degree in English from John Carroll University and started his career in journalism at a weekly newspaper, doing everything from delivering newspapers to selling advertising space to writing articles.

Representatives of various state associations met at the
Meadowlands Exposition Center on March 18 in Secaucus, New Jersey to update the collision
repair industry on various legal and legislative goings-on in their respective
states.

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California

I-CAR Southwest Regional Manager Gene Lopez talked about
how OSHA is cracking down on shops in the Golden State. In one case, six
inspectors visited a shop for six hours and found only one violation: a faulty
light switch. Still, the shop was written up.

Current legislative efforts, he said, include getting
more funding for vo-tech schools and one bill that would require shops, if
they replace a tire, to include a note on the final invoice detailing what the PSI
was on all the tires before releasing the vehicle.

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Hawaii

Dale Matsumoto, general manager of Auto Body Hawaii, said
the 70-plus members of the Automotive Body & Paint Association of Hawaii
were instrumental in defeating a bill on salvaged airbags. According to the
bill’s language, the use of salvaged airbags will now be banned.

The state also went from having no I-CAR instructors to
having four, thanks, Matsumoto said, to I-CAR Southwest Regional Manager Gene
Lopez.

Indiana

Newly elected chairman of the Society of Collision
Repair Specialists Aaron Clark reported that the state association will be
holdings it biannual regional show April 27-29.

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Also, they have posted a labor rate survey on the Indiana
Auto Body Association (IABA) website (www.iaba.info) which is open to any Indiana collision repairer, not
just IABA members, to note their paint and material reimbursement rates as well as other rates. 

Iowa

Janet Chaney of the Iowa Collision Repair Association
(ICRA) reported that members have been working on getting reimbursed for sales
tax on paint and materials.

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Also, ICRA stopped mobile collision repair and refinish
franchise Color All from getting licensed to do business in Des Moines.

Chaney also announced ICRA’s trade show, Iowa Collision
Industry Day on May 3 at Prairie Meadows in Altoona.

Massachusetts

The Alliance of Automotive Service Providers-Massachusetts (AASP-MA) Executive Director Peter Abdelmaseh rehashed the
merger of all three associations. The following week after the
Northeast Forum, he said they were kicking off a program called "Education
Matters" with technical information and business operations classes for
repairers.

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He also talked about the association’s initiative to
classify shops and affix a certain labor rate to each class of shop – in a
state that currently has the lowest labor rate per hour in the country.

"We could see an ‘A’ shop go from $35 and change to
the low $50s," he said.

He said the insurance companies claimed that would
result in $26 more per consumer policy. But according to the collision contingent
in Massachusetts, about 200 shops would get the "A" rate, which would
result in $6 more per policy. Shops would see $26 million more from insurers.
And Abdelmaseh says they have also emphasized that this could create 350 new jobs,
in addition to 150 to 200 construction jobs, and $3.5 million in sales tax,
too.

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Montana

Janet Chaney described how the Montana Collision Repair
Specialists (MCRS) is more than 20 years old, and even though most members have
to drive a long to way to the meetings, about 50 percent of them do twice a
year. They’ve been working hard at improving their estimating skills, and now
they’re moving into lean concepts.

Chaney relayed that MCRS played an integral role in
getting an anti-steering bill passed a couple years ago. Currently, there are
two bills in session, one on database manipulation and the other concerning the
Department of Insurance, specifically making it possible for anyone, not just a
consumer, to file a complaint.

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Chaney’s final note: a body shop owner, Max Yates, now
represents his industry colleagues at the capitol as a state representative.

New Hampshire

Tony Lombardozzi of the Coalition for Collision Repair
Excellence (CCRE) remarked that another licensing bill is on the table, but
lamented on how the industry is still discussing the same issues it did 20
years ago.

"We need a different business philosophy," he
said. "Government and legislation will not solve anything. We need to
look at a different solution rather than fighting or suing insurers.
You win little battles but continue to lose the war. You need to look in the
mirror if you want to know who can change the industry."

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He mentioned that CCRE is having its next meeting in
Cleveland, Ohio April 8-9. It’s there, he said, that repairers can learn a
business philosophy that works.

"All the control insurers have we gave to
them," he said. "Stay away from legislation. Watch your local
government and see what legislation will affect your shop, but don’t put in new
legislation."

Lombardozzi also cautioned repairers about assignment of
proceeds.

"It isn’t a save-all for everyone," he said.
"It’s very powerful, and so if it’s misused, it will come back and cost
you a ton of money. Get documents written up, give them to an attorney and ask
them whether this will work in your business environment."

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New Jersey

Charlie Bryant, executive director of the AASP-NJ, detailed the association’s fight
against mobile repairers, citing a 1983 law that states that an auto body shop
can only be located in a place that’s properly zoned for collision work and the
work has to be conducted inside a building, among other things. Every two
years, shops are required to renew their licenses, and this year was a renewal
year.

"The Motor Vehicle Commission decided to attempt to
license mobile auto body repairers, and we objected to it strongly because the
issue is already covered in the current licensing law," Bryant said.

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According to Bryant, the state’s argument was that these
mobile repairers only repair small chips, but after some research, AASP-NJ was
able to prove they in fact do heavy hits valued at $8,000 to $9,000. He then
informed the crowd that the state has decided to indefinitely withdraw the plan to license these mobile
repairers.

Bryant said the winter was good for repairers in New
Jersey, but the economy there is still in a state where if a car is driveable,
consumers are electing to not fix collision damage.

New York

Ed Kizenberger, executive director of the New York State
Auto Collision Technicians Association (NYSACTA), did not describe a pretty
picture for the Big Apple.

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"The whole system is collapsing on itself," he
said. "The pension burden on the tax base is unimaginable. Waste and
spending has run amok, and we’re having a meltdown."

Still, he praised NYSACTA for being a very active association
that has been able to implement rules and laws.

"But we need to do a better job of enforcing what we
have," he said.

Other goings-on include a material restrictions bill
where anything labeled for professional use cannot be sold to amateurs, labor
rate surveys, and numerous lawsuits over tortious interference using the
appraisal clause and assignment of proceeds.

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Oklahoma

Gary Wano, owner of GW & Son Auto Body in Oklahoma
City, said that hail storms stimulated the industry in his area in 2010 and, as
a result, stunted participation in the Oklahoma Auto Body Association.

Their newly elected insurance commissioner informed the
association that the previous commissioner left 122 open investigations on
fraud. Wano said repairers now feel they have a commissioner who believes he
should be regulating the insurance industry.

Oregon

Ron Reichen, owner of Precision Body & Paint in
Beaverton, informed the crowd of repairers that insurance carriers in his
state are trying to lower the total loss threshold to well below 50 percent and package it as a consumer issue to the Attorney General’s office.

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"People are having their cars totaled and they’re under water," Reichen said, noting that the Portland metro area has a
population of 4 million. "We know insurers are getting premium dollars for
salvage."

The Oregon Collision Repair Specialists are trying to
educate repairers on P-page logic and business techniques to combat material
capping, feather prime and block, and the blocking of sublet mark-ups, among
other things. They’re also trying to promote lean standards in shops.

Tennessee

Adding to the membership of the Tennessee Collision
Repairers Association has been slow going, said Executive Director Tony Nethery, especially because
repairers haven’t forgotten a meeting of shop owners in the early 1980s that
resulted in several repairers violating anti-trust laws. He said some went to
prison, and others received $20,000 to $30,000 fines.

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"We only have 40 members, and we haven’t tackled
legislation yet because they remember what happened," he said. "We’re
going the consumer education route."

They’ve expanded their annual event to two days,
however, and managed to secure a retired Congressman to speak. Insurers will
also be present to offer training on cycle time. Also, he said they were quite
proud to get their name as a sponsor on a car running at the Bristol Motor Speedway.

Vermont

Mike Parker of Parker Classic Autoworks in Vermont said
he used the state’s "contract law" to sue Nationwide on behalf of 31
insureds for breaching its contract. He represented his customers in court through
assignment of proceeds and filed three separate dockets, each under $5,000, so
the case would be heard in small claims court versus Superior Court which
he says is where Nationwide wanted it heard. He ended up winning a little over $11,000 for the insureds,
plus interest assessed.

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"It was my final invoice versus Nationwide’s
estimate," Parker said.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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