Proprietary Repairs - BodyShop Business

Proprietary Repairs

“Do you think that in the near future, other car manufacturers will follow Jaguar’s lead and require repair shops to be ‘certified’ to fix their vehicles?”

— Terry Smith, body shop manager
Shepherds Chevrolet-Cadillac
North Manchester, Ind.

Question answered by: Charlie Barone

Before OPEC, the energy crisis and the CAFE mandate ever existed, aluminum to some extent has been present in automotive construction. Typically found in bumper rebars, hoods and deck lids, aluminum parts can yield as much as 40 to 50 percent weight savings, which translates to better performance as well as increased fuel mileage.

Today we have aluminum-intensive vehicles, which are cars built with aluminum inner structures as well as outer body panels. The familiar Jaguar XJ sedan is one of these, as is the Audi A8 sedan, the new Audi TT and the Range Rover SUV. These are only a few of the aluminum cars coming at us at an ever- increasing rate.

Aluminum is one of the more readily available elements in the world and is relatively inexpensive to process from bauxite ore. When aluminum processors create alloys with the addition of varying amounts of magnesium, silicon and copper, the material becomes incredibly strong and versatile.

The most common aluminum alloy application in autos is in the construction of wheels, which are strong enough for racing use and reduce the unsprung weight of a car or truck.

The challenge to body shops in the repair of aluminum car bodies is that aluminum doesn’t react like steel in terms of straightening, heating and welding. Because aluminum is a great conductor of electricity, it cannot be welded with STRSW (squeeze-type resistance spot welding). Unlike steel, which becomes red hot and will become molten when high currents are applied to sandwiched panels, aluminum doesn’t offer the resistance to create that heat.

Metal Inert Gas (MIG) welding, however, is the recommended method for some repairs, although many car makers direct shops who repair their aluminum cars to use a combination of rivets and structural adhesives.

Because of the special handling required when repairing aluminum cars, their manufacturers are at times very protective of their customers and their products. In fact, some manufacturers will only sell structural parts to those body shops that have been certified as aluminum repair centers (see article entitled “Jagging Rights” in May 2005 BodyShop Business). The effect of this is that many independent body shops have been cut out of the picture, with only a few favored.

While there are no manufacturers that have gone to this extent to ensure that their customers’ cars are repaired according to their strict guidelines, the appearance of factory-certified body shops has a way of changing what was previously an entirely open market to one of proprietary repair networks.

Mercedes-Benz, BMW and Audi also have their certified body shops, both dealer-owned and independently operated. While their network of body shops does not restrict the sale of structural body parts to those shops exclusively, the dealers are given telephone scripts with word tracks to use for referrals to their customers in need of collision repair, structural damage in particular. In fact, the referral process to their certified shops doesn’t wait until the unfortunate occurrence of an accident, but is presented to the owner of the new car at the time of purchase.

To get their response to the development of these proprietary repair networks that have a way of cutting out many of their franchisees, I contacted CARSTAR, the largest group of independently-owned auto body repair shops in North America. The privately held company currently has 270 locations in 25 states and the District of Columbia, and 110 locations in Canada.

“As vehicles become more complicated and as repair standards change, manufacturers have a responsibility to publicize updated repair information freely, and should have the right to designate the criteria by which they will recommend repair shops to customers,” says Dan Bailey, CARSTAR’s president and chief operating officer.

“All shops should have equal access to repair information and equal opportunity to invest in training and technology to service the changing nature of our work and to strive to meet manufacturers’ criteria for recommendations.

“But customers must continue to have the right to choose freely the shops to repair their vehicles. Restricting their choice, by exclusionary certification or parts distribution practices by manufacturers, is unnecessary – and works against the foundational principles of entrepreneurship and free enterprise in America.”

What the OEs Say…
In an effort to see what the auto makers have in store for the independent body shops in the U.S., I contacted many of them for their views on who should be repairing their cars, what types of certifications are offered, what restrictions there are on parts sales and any limitation on which shops may be certified.

Honda, Acura
With respect to the Honda and Acura brands, their spokespeople said there are no restrictions on parts sales or recommendations for repairs. While that statement was not unexpected by any means, it was somewhat surprising because the Acura NSX is an all-aluminum body and also requires special handling in terms of collision repairs. American Honda didn’t respond to my follow-up questions on aluminum-bodied car repairs. I do know, however, that they do have a certification for body repairs to the NSX. However, due to the NSX’s limited sales numbers, the certification won’t have an appreciable effect on the independent body shops.

Ford Motor Company
Steve Nantau, who’s the Collision and Light Repair Engineering Supervisor for the Ford Customer Service Division’s Aftermarket Engineering and Remanufacturing Operations, had this to say in response to my questions regarding certification and the restriction of parts sales:

“Ford Motor Company does not have a program like Jaguar, nor are we planning one. We do not limit part sales to body shops.”

Volkswagen
Volkswagen’s public affairs person Keith Price says:
“Volkswagen has no such certifications or restrictions of this type. I checked with our product planning group, and we even contacted the body shop under contract to do repairs on our corporate vehicle administration fleet, and they knew of no such policies for the VW brand.”

BMW
I conducted an interview with Greg Marks, manager of BMW’s aftersales business development and marketing, and Walter Malec, body and paint technical and training manager.

BSB: What models does BMW sell that require special training to perform structural repairs?
Malec:
“Quite honestly, all models require proper training to do structural repairs. But specifically, the 5 series and 6 series, which would be engineering code E60. [Also] E61, E63 and E64, and we just launched a new X5, which would need similar repair technology (engineering code E70).”

BSB: Why do those particular models require proper training?
Malec: “On the 5 and 6 series, we use an aluminum front structure, the frame rails are extruded aluminum, the strut towers are cast aluminum, the upper rails are made from stamped aluminum and so is the firewall (cowl). And it’s riveted and bonded to the steel structure. On the new X5, we use an aluminum strut tower along with a steel frame rail, so there is some bonded and riveted technology on that
vehicle.”

BSB: Could you expand on the requirements for the certified body shops?
Malec:
“The requirements for those repairs are no different than any other model, i.e., you would need an approved frame machine…but we have some tools and equipment we use for aluminum repairs. There’s a special welder that’s used for welding steel pins to the self-piercing rivets used to hold the steel structure to the aluminum structure.”

Marks: “Our certification program for body shops is one in which we offer training and support as far as how to run the business for a dealer-owned body shop. And if they meet certain standards and buy the specific tools we ask them to and attend the training, then we’ll call them a certified BMW Collision Repair Center. In exchange for that, there are some qualifiers for parts rebates that we [return] to those dealers. But as far as aluminum repairs, we offer training to any dealer-sponsored or owned paint and body facility. Basically, an independent repair shop could, if they bought the right tools and equipment, become a shop that’s approved to do the aluminum repairs on those vehicles.”

BSB: Where is the training provided?
Marks:
“We have a couple of different locations: one here in Montvale, New Jersey, one down in Spartanburg, South Carolina and another one in Oxnard, Calif.”

BSB: If one of your customers has an accident with a 5 or 6 series car, and it’s repairable, how does the dealer from which he bought his car handle the referrals?
Marks:
“We provide them with marketing materials to give to the customer when they sell the car, and we talk about the benefits of taking the car to a certified collision center. Obviously, we don’t control that 100 percent, but we would hope that that’s the case with our dealer network.”

BSB: Are sales of the aluminum inner structure parts restricted to certified repair shops?
Marks:
“No, they’re not. We have had situations in which repairers bought parts to repair a 5 series and got themselves into trouble, in which case we had to help – which we do.”

The BMW spokesmen said that there’s a difference with a certified BMW repair center, which is owned by a dealer. When we talk about other, non-owned shops that have attended all the training, they’re referred to as “trained.”

BSB: Does BMW or its dealers require that the specific cars be repaired by certified or specially trained technicians and shops?
Marks:
“We have a certification program in which we offer training and support for dealer-owned body shops…we call them BMW certified training centers. We offer training to any dealer-sponsored shop.”

BSB: How many shops have been certified and how many have gone through the training?
Malec:
“We have 50 certified repair centers that are dealer-owned. We can’t track the number of shops with certified technicians because they tend to bounce around so much. I know we’re knocking on the door of over 2,000 technicians, or close to it.”

The BMW spokesmen couldn’t offer an opinion as to what rates shops were charging for repairs to those vehicles that require certification, but acknowledged that a premium is traditionally charged for aluminum repairs. They also couldn’t say how the insurance underwriters have responded in terms of higher premiums for those cars. However, they assured me that the labor times for the R&R of the structural parts for the aluminum cars are nearly the same for their steel counterparts.

BSB: How does the damage to the front inner structure on the 5 or 6 series BMW affect the warranty coverage?
Marks:
“If the repairs are done to factory specifications, there is no effect at all on the warranty. On a CPO (certified pre-owned) vehicle, which is one of the highest standards we have, any car with structural damage is not allowed to be certified under the program.”

In closing, they added that, from a business perspective, BMW is looking to collision repair in the future as a strong avenue for dealer profitability.

“In the past, [new car dealers] didn’t want to get involved in paint and body, but it can be a profitable business,” says Marks. “Our 50 certified shops are doing well, they’re making money and we’re teaching them how to run [their shops] more as a business. Our goal in the U.S. is to have about 150 dealer-owned certified shops. Cars keep getting into accidents and somebody’s got to fix them, and we think that our dealers being trained are the right ones to do that. At the same time, we can really satisfy our customers and they get a good product back.”

A person who prefers to have his name withheld is the owner of a shop that specializes in the repair of BMWs and related some of his views on the subject. For the purposes of this article, we’ll refer to him as John Smith. A local BMW dealer sponsored several of his technicians, who’ve been certified by BMW for the aluminum body repairs. According to Smith, his experience in the marketplace has not been a walk in the park.

“We spent the money on the capital investment and the training and getting ourselves geared up to do the work the way the manufacturer calls for it to be done,” Smith says. “The fact of the matter is that once we posted the rate, which is based on the capital expense and the training, the insurance companies did everything it could to find other places to have the work done…or it pretended that it knew nothing about any such sensitive aluminum issues or having the work performed by a certified technician with specific equipment. As a result, we’ve only seen two of the 5 series cars since we’ve put all this equipment in place.”

Smith said that one of his techs he paid to have trained and certified went to work for one of his competitors, which happens to be someone who will perform the specialized work for the prevailing body labor rate – which, by the way, is still under $40 an hour.

“What it comes down to for the insurance company is to keep the cost of the claim down to a bare minimum,” Smith says. “They don’t care how a car is fixed. Period.

“Even after you’ve got the mechanical component removed, you’re still performing a repair that has not been well-engineered with repairability in mind. BMW says that if the car gets hit and there’s any structural movement, the parts must be replaced because of the glue bond being broken. That’s the rule. I guarantee you that these insurers are settling claims with shops that need the job – and certainly aren’t going to tell the customer that they can’t do the job – and they’re pulling the aluminum over and putting the cars on the frame machine and doing the best they can to make a dollar. It’s being directed away in many cases by unscrupulous insurers to shops they have arrangements with and whom they control. The work is being done at the customer’s expense for the benefit of the insurance company.”

Smith also related the difficulty he has in getting reimbursed for fixture rentals required for repairing the cars on his dedicated bench. The fixtures cost him $65 per day to rent, and the time involved is sometimes as long as a week. “The insurance company does not want to reimburse for fixture rentals…maybe 20 percent of them will pay the rental costs. State Farm’s policy on the fixture rental is that it’s not the exclusive remedy and that there are remedies that others utilize that conform to the manufacturers’ requirements. So there are those shops that are not charging for the fixture rental, therefore reinforcing State Farm’s position that they don’t owe it.”

Smith says that State Farm is resolving the issue of fixture rental by adding unnecessary parts to their bids, such as a $3,000 wiring harness.

“They know exactly what they’re doing. It keeps them from establishing a written precedent,” Smith says. “Any aluminum automobile needs be fixtured because it’s going to be a glue and rivet repair.”

Smith concluded by saying, “If you can generate the work to the door, [the investment] becomes justified and gives you walk-away power.”

Mercedes-Benz
Mercedes Benz is a car maker with a network of dealer-owned and independent certified body shops. Their corporate spokesperson Rudolf Pfeiffer also responded to some questions via
e-mail.

BSB: What is your process for certifying body shops in the U.S.?
Pfeiffer:
“The Certified Collision Repair Program has been developed by Mercedes-Benz as a dynamic program to certify and distinguish body shops that meet or exceed a defined set of standards for repair work, training, equipment and delivery of customer service. These body shops are either Mercedes-Benz dealer-owned facilities or Mercedes-Benz dealer-sponsored facilities. In either case, a Mercedes-Benz dealer must initiate the certification process.”

BSB: How does one certify a business for repairs to Mercedes-Benz cars?
Pfeiffer:
“After submission of the application to Mercedes-Benz, a third-party independent auditor reviews the application and schedules a visit to the collision facility. During the audit, the auditor makes sure the facility meets or exceeds Mercedes-Benz standards for customer service, sound business practices, workspace and organized facility layout, training, tools and workshop equipment. If all certification guidelines are met, the facility is approved.”

Some of the specific equipment a body shop must have in order to qualify for certification by Mercedes-Benz includes:

  • A dedicated aluminum repair kit and a dedicated aluminum working area
  • Approved MB downdraft spray- booth/drying oven
  • Approved MB welding equipment
  • A dedicated Fixture Bench and Chassis Measuring System (Celette or Car Bench)
  • Two-post vehicle lift
  • Use of an approved paint vendor
  • Paint equipment approved by MB
  • Approved MB alignment system
  • Approved MB refrigerant equipment


Pfeiffer:
“Shops may purchase tools and equipment from our Standard Service Equipment Program (SSEP). The SSEP catalog combines a catalog, specific notes/information on the requirements, prerequisites for equipment use and general useful information concerning workshop equipment. The SSEP catalog is intended to provide a convenient source for obtaining approved equipment. 

“Certified Collision Facilities are required to commit to a Basic Repair Course. This course is approximately two to three days of training per employee.

“In addition, personnel are required to attend collision training on any new models as they’re released for sale. This averages three to four days per employee. Painters are required to remain current with paint training. Training is provided through Mercedes-Benz approved paint vendors. Collision technicians must also complete training in aluminum repair methods. This training will be provided in new model training.”

BSB: Are there certain cars, such as your C class autos, that require repairs to be performed by certified shops only?
Pfeiffer:
“Due to innovative materials and assembly techniques that are used in Mercedes-Benz vehicles, we strongly recommend that any paintwork or body repairs on any Mercedes-Benz models be performed only by those repair facilities which have been certified by Mercedes-Benz. Clients are encouraged to exercise their right to insist that these types of repairs be performed by only those repair facilities which are certified by Mercedes-Benz.”

BSB: Will the customer be penalized for having structural repairs done to certain Mercedes cars by non-certified body shops, such as having the factory warranty voided?
Pfeiffer:
“While vehicle owners may elect to have repairs performed at non- Mercedes-Benz Certified Collision Facilities, damage or malfunctions caused by body repairs not performed in accordance with Mercedes-Benz specified repair procedures or otherwise not properly performed are not covered by the Mercedes-Benz New Car Limited Warranty.
“We recommend that only Certified Facilities undertake paintwork or body repairs on our vehicles. Certified Collision Facilities understand the unique features and particular needs of our vehicles and they have the tools, equipment and training needed to repair paint and body damage properly.

“One benefit customers receive by having their vehicle repaired at a Mercedes-Benz Certified Collision Facility is that genuine Mercedes-Benz parts are used in the repair. Our exacting standards help restore the car to its pre-accident condition, so that it will react as intended in the event of a subsequent accident. Another benefit is that the customer can count on proper fit and accurate measurement. That’s because each facility employs a dedicated fixture bench developed exclusively from factory blueprints, ensuring repairs are made with assembly line accuracy. Each facility receives training to ensure that the vehicle is properly repaired in accordance to MB standards.”

BSB: Are the certifications open to any willing and properly equipped body shop in the U.S.? Or are there restrictions on the number of shops in a given market area?
Pfeiffer:
Certification is limited to Mercedes-Benz dealer facilities or Mercedes-Benz dealer-sponsored facilities. Independent facilities which are not sponsored by an authorized Mercedes-Benz dealer are not eligible to participate in the program.

BSB: Do you know of a premium charged for labor in the body shops certified by Mercedes?
Pfeiffer:
Mercedes-Benz does not dictate labor rate charges. Dealers and sponsored body shops are free to set their own labor rates for their markets.

BSB: Are there restrictions of sales or structural parts to certified body shops only, or can anyone purchase the parts?
Pfeiffer:
Mercedes-Benz does not restrict the sale of collision parts.

Toyota
While Toyota, the one to beat in terms of new car sales worldwide, does have factory-certified body shops, they build no cars that require special handling in terms of collision repair. Their response from Senior Wholesale Collision Parts Administrator Karl Krug was:

“Toyota does not plan to restrict the sale of components. All parts will continue to be available through Toyota dealerships as they are today.”

Brad Brahe, Toyota’s body shop development manager, described their certification program:
“The Toyota Certified Collision Center (TCCC) program was developed to support Toyota dealers in the collision repair industry. Of Toyota’s 1,218 dealers, approximately 450 have body shops. Currently, 157 dealers have enrolled in Toyota’s certification program and, in 2006, the program was expanded to include Lexus. TCCC dealers are encouraged to market their services to Toyota owners through the collision center, service department, parts department, new/used vehicle sales departments, as well as all dealership events including new owner clinics. In addition, TCCC dealers also market to local insurance companies.
“The TCCC program is being expanded in 2007 to support those dealers interested in entering the collision repair industry. In addition, this year Toyota will be studying the feasibility of enrolling independent shops in a referral type program to support dealers who are not in the industry.

“Regarding training, managers, estimators and technicians utilize training offered through the University of Toyota. As far as technicians go, Toyota brand-specific training is offered to Toyota dealer collision repair/refinish technicians.”

The following is a list of the courses:

  • Non-structural body repair techniques
  • Structural body repair techniques
  • Color matching for painters
  • Advanced painting techniques

Toyota technician certification specific I-CAR courses and paint vendor equivalent courses are accepted by Toyota. Independent body shop technicians may also attend Toyota training classes if sponsored by a Toyota dealer. 

Audi
Audi does have certification for the collision repair of its aluminum intensive cars. Company spokesman Patrick Hespen had this to say about their program:

“As far as A8 collision repair is concerned, vehicles are returned to the dealer to be sent out for repair. Audi has approved aluminum repair shops all across the U.S., and the vehicle can be delivered within a day of its arrival at the dealer. These shops are certified by Audi for repair of aluminum vehicles.”

Specialization Ahead
While there are other car makers – General Motors, Hyundai, Mitsubishi, Suzuki, Nissan and Land Rover, to name a few – they didn’t respond by press time as to whether they’ve set up a certified body shop program. To my knowledge, none have. With that being understood, the cars and trucks in the marketplace today are becoming increasingly complex with respect to passenger restraint systems, high strength steels, aluminum construction and electronic management systems – so much so that the number of average shops that have been accustomed to taking on all cars of all makes and models may be on the decline. Specialization may be the way to go.

One of the benefits of specializing in a brand of vehicle or specific model is the return on investment one may realize as a result. Audi, Mercedes, BMW and Jaguar cars clearly yield much higher dollars with respect to labor. What’s more, the labor databases haven’t entirely kept up with the new specialized repair procedures, so the specialized professional may find himself back in control again in terms of pricing his work. It’s not likely that the shop down the street can meet the requirements to do the repairs. Of course, this means the customers must be educated as to what constitutes a proper repair.

Writer Charlie Barone has been working in the body shop business for the last 35 years. He’s an ASE Master Certified technician, a licensed damage appraiser and has been writing technical, management and opinion pieces since 1993. He can be reached at [email protected].

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