Monday, 30 April 2012 21:40

Q&A with the New BAR Chief, John Wallauch

By Ed Attanasio

Wallauch, 75, is a long-time car enthusiast who currently owns four vehicles and a motor home. He is the newest Chief of the Bureau of Automotive Repair (BAR) replacing Sherry Mehl. We sat down recently with Wallauch to talk about his first month in the position, to assess his goals for the organization and what he’ll be doing in relation to the collision repair industry and the issues surrounding it.

Q: What have you learned about the job since being appointed on February 13th? In this position, you’ll be overseeing an enormous organization. How have you prepared during your career for this job?

A: First off, my enthusiasm for this job couldn’t be higher. I’ve learned that I’m basically young at heart. The appointment was quite a surprise and really a huge honor. The application process is basically called sit and wait. It took 12 months before I actually heard the news. I worked here many years ago, so being the Chief is a great honor. It’s the fulfillment of a lifelong dream—coming back home to achieve our goals for the Bureau. I’ve been working on the smog check program for the past five years, but I’ve been aware of what the BAR has been doing the entire time. The Bureau’s staff and I agree that we all are on the same page when it comes to serving the state and all of its car owners and the industry as a whole. It’s all about consumer protection, so that is our main focus in everything we do. By forging a team approach, we all feel that we can get things done in an effective way and timely fashion. I know that my predecessor made a lot of very beneficial changes during her time as the Chief, but my way of doing business is a little different. I strongly feel that any open position with the BAR should be put up to bid, with the jobs posted and made available to anyone who is qualified and wants to apply. That way it’s a open process and everyone has a chance. And hopefully that way we can get the best people available for each open position.
Overseeing a $20 million annual budget and 640 people, with 12 field offices is definitely a huge job. We oversee the activities of 5,177 companies in California that are registered with us as body shops. During my career, I’ve held several positions overseeing diverse companies that were spread out through a large geographical area, so I’ve been there and understand it .

Q: In the late 1990s, you served as the BAR’s interim Executive Officer for the Inspection and Maintenance Review Committee. And you also served as Bureau’s Deputy Chief of the Field Operations and Engineering Division and were instrumental in implementing California's first Smog Check Program. Do you believe that your familiarity of the BAR will make it easier for you to achieve your goals?

A: Most definitely. One of my main goals is to get the Smog Check Program in this state working like it should. I was working with CARB, but I was also the organization’s liaison to the BAR, so I’ve been in the loop for a long time. We met with the people from the BAR every week, so I was able to foster relationships during that process. This way I was able to get an ongoing look at what the BAR was doing and what programs and projects it was working on.

Q: Midnight Body Shops who aren’t licensed and operating under the radar still seem to exist in considerable numbers, according to body shop owners I’ve polled. How has the BAR dealt with shady shops and how can they be stopped?

A: Some people claim that there are a lot of these shady operators and they might be right, but a count is hard to find. We started going after these shops under Sherry’s watch and this project is continuing. It’s called Cite and Find, and when they find an unlicensed shop, they act quickly to either cite them or fine them, based on the situation. It can be anything to a body shop to a guy who fixes brakes in his driveway. All of these issues are covered by the Cite and Find program. When we find them, we normally give them a notice and then they get a window of time to get licensed. It’s a motivational thing, because if they don’t get it done within a certain time period, we will penalize them. It gives them a chance to get right and this way they have a heads up and spell out what they need to do to rectify it. During the recession, I think maybe some of these unlicensed operators were just trying to make ends meet during tough economic times. Much of it is driven by the economy. Many years ago, a kid with bondo and paint came to my door and wanted to fix a dent in my car. So, it will probably never go away, but hopefully we can keep it from becoming a huge problem in California. It definitely impacts those law abiding shops out there, and that’s why we need to pay attention to it, so that it does not get out of hand. The difficult part is that they’re underground so how do you identify them, so getting leads from legitimate, licensed shops is extremely valuable. If you know of such a business, please contact us, and we will look into it immediately.

Q: In a recession, do you see more body shops cutting corners to save and capture more revenue?

A: Within the past few years, the BAR has been noticing more and more salvage activity that isn’t within the law. Cars that are considered totaled by the insurance companies are bought by the salvage companies, fixing them up and re-selling them. These types of activities are becoming more prevalent and a lot of the unlicensed shops are doing this type of thing, we believe. We have ways to identify these “midnight shops”, but I don’t want to share our secrets for obvious reasons. A lot of these companies are in the used car business, yet they aren’t licensed to do so. They come up with a lot of ways to wash the paperwork and we’ve heard that many shop the cars’ titles back east and then register them out there and then ship it back to California. That way they lose the salvage title and suddenly it looks like it’s a regular, appropriately registered vehicle. Them, they can also advertise the car as a non-salvaged automobile. It’s an area we’re aware of, but the main question is how can we find these violators? And that’s why your help as body shops is instrumental to our efforts in this regard. We tell consumers this--If someone offers you a car and it is well below market price, be wary, because there is no lunch and if it looks too good to be true, it probably is.

Q: When your predecessor took the job, one of her main promises was that the BAR would be a kinder and gentler organization. Will you continue on this vein and how will you do it?

A: Installing a 100% open door policy is one of my first priorities, which is a significant change over the past. I know a lot about this business from a technical standpoint, because I am an engineer and have that background. So, I get involved in a lot of technical projects around here, because of my experience. But to stay connected to everyone who works here in some capacity, I have instituted an open door policy and that also applies to body shop personnel as well. I feel more comfortable doing things this way, because in the end it makes the Bureau much more effective. It helps morale and makes people more comfortable and contributes to us achieving our goals.

I’m not going to say that I’m definitely kinder and gentler. When Sherry Mehl cleaned house when she took over the position, the main issue was that some of the field agents might have overstepped their reach, I’m not certain. But if that was the case, getting rid of those agents was the correct move and needed at that time. But, I don’t see that happening at the BAR today. Our message is let’s have full disclosure within this industry and deal fairly with people at every level. Those who disregard the things we expect are going to be subject to action. In the early 1970s, the BAR was seeing 25,000 complaints per year and now we’re getting about 14,000 annually. I believe that full disclosure, including written estimates and putting an end to what we refer to as “five o’clock surprises” and getting authorization before raising the price have come a long way in reducing consumer complaints. It helps consumers and it benefits shops as well, because then everything is out there without any questions and uncertainty. I just feel like we’re all headed in the right direction with this industry and throughout the state, because full disclosure eliminates things such as “five o’clock surprises” and other issues that will lead to complaints.

I really don’t have anything on my agenda relating to body shops as far as problems I’ve seen. The issues concerning O.E. parts versus aftermarket parts are still up in the air, as we all know. We don’t know what the outcome will be, but full disclosure still protects both the shop and the vehicle owner, because if the shop uses an aftermarket part, they have to tell the consumer. It’s a hot potato right now, because it involves all four parties—the shops, the customers, the parts suppliers and the insurance companies as well. Just so you know, we received exactly 14,822 complaints in 2011 and only 252 led to any type of violation. Many of the complaints result from paperwork issues, such as not recording an odometer’s mileage, but some are very serious and relate to fraud. All of our complaints are proactively pursued and each is closed within 45 days of filing.

Q: Many people have suggested that the BAR should conduct industry rate surveys in order to guarantee objective surveys that can be trusted by both all parties involved. Is this plausible in your opinion?

A: We’re not really an accounting organization, but I guess we could probably play a role in this regard, because we know all the licensed shops out there and already obviously have a relationship with them.  If it involves creating new regulations, then we cannot go there. But, if we can get the authority to do it, we can discuss it further. Maybe this is the type of thing where we could sublet that to a private firm that does actuarial. We could take on the responsibility, but then farm it out to a company that is adept at something like this, that could be bonded and provide us with good, accurate numbers.

Q: What are your top three priorities overall as related to the collision industry?

A: The first thing for me to do is find out what they are. I need to educate myself better about the auto collision industry and what they’re facing right now. I don’t have any particular issues with them, but I will need more time to get a grasp on what’s out there. When I was first working with the BAR, auto body was not part of their jurisdiction, so I need to get up to speed on the collision industry rather quickly and that’s why I’m going to be meeting with the industry as much as I can.  As I become more familiar with it, we can then set up stated goals and objectives and of course, they can also change over time. Right now, one of our main objectives is to implement the changes in the Smog Check program, as a result of AB 2289, and in general just assuring people that we’re doing everything we possibly can to ensure that consumers in California are protected.


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