Sunday, 26 October 2014 17:00

ARA and LA Attorney General Face Off Over “Junkyard Parts”

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After Louisiana Attorney General Buddy Caldwell filed a lawsuit in August against State Farm, accusing the insurer of illegally forcing LA collision repair facilities to install unsafe parts on consumers’ vehicles, his allusion to these parts as “nothing more than used junkyard parts” created quite a stir amongst professional automotive recyclers across the country who were offended by the derogatory term and connotations thereof.

Michael Wilson, CEO of the Automotive Recyclers Association (ARA), and David Gold, Secretary of ARA and co-owner of Standard Auto Wreckers, quickly took up arms to defend their profession while Caldwell clarified his position as being pro-consumer rather than anti-recycled parts.

In responses to Caldwell’s statement, Wilson says, “In this time of instant communication, sound-bites, and a 24/7 news cycle, it is imperative that public servants are well informed about the issues on which they comment or desire to influence. Attorney General Caldwell - whose responsibilities include serving as both the People's Lawyer and the State's chief legal officer -  was very ill-informed when he used his public office to issue a statement that hurts both Louisiana's consumers as well as several industry sectors dependent upon recycled automotive parts. ARA has reached out to Mr. Caldwell to express disappointment with his comments, and we urge him to rescind his statement so that consumers feel confident they can continue to access safe, affordable and environmentally-friendly repairs and upstanding recycled parts, and repair businesses can fully engage in the state's commerce. In contrast to Mr. Caldwell's comments, the West Virginia Supreme Court of Appeals recently affirmed the use of salvage/recycled original equipment manufacturer (OEM) crash parts in vehicle repairs and, moreover, applauded insurers for using measures to reduce premium costs for their customers. This ruling is a significant step forward for the professional automotive recycling industry and the increased utilization of genuine, recycled OEM parts. It is unfortunate that so soon after the West Virginia ruling, Attorney General Caldwell made his misleading comments. It is regrettable that not all state attorneys general have done their homework and educated themselves about our industry and the critical role that recycled OEM automotive parts play in the market.”

Speaking from a professional automotive recycler’s point of view, Gold finds it “very disheartening and discouraging to hear such negative views, especially in regards to the junkyard image which is untrue, particularly of ARA members. Reusing a part is the purest form of recycling, and hearing a government official say this shows a disconnect between the knowledge of senior officials and actuality.”

Both Wilson and Gold believe that the automotive recycling industry plays an important role in the collision repair industry by providing quality and cost-effective alternatives to new OEM parts, offering another option for consumers who may not be able to afford to repair their vehicles otherwise. Gold notes, “there is a lot of misinformation out there. Recyclers need to speak up and take a stand. We need positive advocates who understand our industry, are willing to learn, and will present accurate information to help us do a better job of educating the public.”

Wilson adds, “as our members’ business partners know, the highest commissioned part is not always the smartest choice. Offering the vehicle owner an alternative to new OEM parts and utilizing a recycled OEM part will help keep that vehicle on the road and returning to that repair shop for years to come. Utilizing recycled parts builds a strong customer base and promotes the environment all while using parts identical to new OEM parts. Professional automotive recyclers provide a crucial link in the automotive parts supply industry. Salvage or Green Recycled Parts ® are OEM parts, designed by the OEM and built to meet the OEM’s requirements for fit, finish, durability, reliability and safety. They are effectively the same parts, simply distributed to consumers through a different channel – new versus used versions of the same parts.”

When questioned about his statement on “junkyard parts,” Caldwell does not differentiate between the terms recycled, used or junkyard parts, but he notes, “whichever term you choose, those parts are only one element of the whole culture of business practices that led us to file our suit against State Farm… Our case is about protecting consumers. Consumers are not protected when they don’t know what types of parts are being used in the repair of their vehicles. Consumers aren’t protected when no one knows how many miles are on the used parts that are sent to the body shop to be placed on their car. Consumers aren’t protected when it is impossible to tell whether the parts have been stressed or cracked or damaged in some way in their prior life, and consumers aren’t protected when these parts aren’t being tested in any way for safety before they are put on their vehicles without their knowledge.”

In response to Caldwell’s objection to the use of unsafe parts, Wilson explains, “While I cannot speak to what other parts suppliers or industries have in place, ARA is confident in the strict quality control and inspection procedures employed by ARA member businesses. Professional automotive recycling businesses have quality control and inspection systems in place to ensure that the product they provide lives up to their customers’ expectations. Often, this includes an extensive inspection and evaluation of not only the automotive part, but the vehicle the part came from. A physical evaluation takes place, along with a review of the vehicle's history, build codes, build date, verification and testing of mechanical and electrical parts. Parts found to be of a substandard condition grade (Grade C or X, for example), rusted, or otherwise non-repairable, are not listed as available on estimates or sold to customers.  These are just a few examples of the quality control measures that are common practices of professional automotive recycling businesses.”

Gold believes that recycled parts sold by ARA members are safe and meet OEM standards for fit and functionality, and he asks, “why should we trash good parts and use more of our natural resources to make new parts? It’s only logical to reuse these parts. Professional recyclers aren’t looking to dictate or control the repair process; we simply make these parts available for collision shops to purchase and use in repairs. Recycled parts often save vehicles that would be declared a total loss otherwise. Speaking plainly, recycled parts make sense.”

Fortunately, Caldwell is not completely opposed to the option of using recycled parts in the repair process, provided the consumer is informed of and agrees to their use and that the quality of the parts can be confidently ascertained to ensure that their use does not pose a safety risk to his constituents.

“In the manufacturers’ professional opinions, and in the opinions of many body shops that are committed to good, safe and professional repairs, there are parts that cannot be re-used without inherently compromising the safety of a vehicle; however, if consumers are looking to be cost conscious and are thoroughly informed about these alternative repairs, they would seem to be viable options… pending proper disclosure and consent, this might be an understandable option for certain consumers. Our case is not just about junkyard parts - our case is about consumers and about any part, any repair process and any business practice that renders their vehicles less safe and less valuable than they were prior to an accident.”

Wilson notes, "We also support consumer choice regarding what part and repair process are utilized for their vehicle.  Recycled parts are quality alternatives that provide repairers the option of offering consumers significant additional benefits compared to new OEM parts.  When repairers use recycled parts, they are saving costs for consumers and helping them to keep their vehicles on the road. Today over 70 percent of vehicles aged 7-years and older are declared by insurance companies to be "Total Loss" after an accident -- many times this is due to the high cost of new replacement parts.  The highest commissioned part is not always the smartest choice.  Offering the vehicle owner an alternative to new OEM parts and utilizing a recycled OEM part will help keep that vehicle on the road and returning to that repair shop for years to come."

Gold agrees that consumer safety is a top priority which is why ARA has established standards and grading systems as a means of describing the recycled parts in the most appropriate way possible, with an emphasis on any imperfections, in order to allow the consumer to make a choice. He hopes to see all recyclers join ARA and adhere to these standards to ensure that all recycled parts being utilized in repairs are safe for consumers.

Wilson adds, “ARA is known throughout the different sectors of the automotive parts industry as a dynamic organization that, for over 70 years, has provided valuable parts standards and certification programs in order to better quantify recycled automotive parts and ARA member businesses' level of performance to consumers and auto repair professionals. With programs such as the Certified Automotive Recycler (CAR) and Gold Seal programs, ARA members continue to provide consumers with quality, low-cost alternatives for vehicle replacement parts, while preserving the environment for a ‘greener’ tomorrow.”

Looking to the future, “ARA hopes to move the industry to a point where recycled parts are listed in all relevant business platforms and that the market be truly allowed to determine which parts are utilized.”