Thursday, 31 August 2006 10:00

Industry pros discuss implications of underestimating costs

State Farm's new Select Service DRP program, industry anti-fraud measures and estimating issues highlighted the discussion at the Collision Industry Conference, held in August at San Jose, California. CIC was held in conjunction with I-CAR's annual international conference - Getting Revved Up For Training. A power packed agenda filled the day for over 200 attendees. 

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 Gary Wano, Jr.

State Farm's Select Service

State Farm Claims Consultant George Avery updated the assembly as to the current status of the his company's new Select Service program. State Farm is implementing a Repair Advisory Council composed of shop owners working with State Farm. "All changes to date in the program are from our opportunity to interact with the industry," Avery stated.

Regarding rollout dates, Avery reported that the information has not yet been made public. "We are not releasing that information because the 13 zones are in control of their own timing. We do know that the rollout will be completed by 2007 unless another Hurricane Katrina hits - of course, then all bets are off."

One example of changes to the program is that when a Multiple Shop Operator has ten shops, State Farm will get the same rate at all those shops. Every shop is subject to 'favored nation status.'

"We want a level playing field," stated Avery. "The bottom line is that if it is insurance work, we will not be compromised on price." He recommends that shop owners go to local State Farm management to get the answers to their questions.

Auto body anti-fraud measures

"What's wrong with this picture?" was the question asked by the CIC Anti-Fraud Committee.

Gary Wano, Jr., G.W. and Sons Auto Body, Oklahoma City, Oklahoma, Com-mittee Chair started the presentation with the following disclaimer. "This report

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CIECA Executive Director Fred Iantorno introduces CIECA's new Membership Scholarship program.

is an introduction of non-scientific findings of actual occurrences reported from businesses around the country, showing that a pattern of underestimating the cost of repair occurs from coast to coast."

The Anti-Fraud committee was tasked in January with investigating nine issues: (1) getting paid to do the job right; (2-5) database manipulation - misleading or improper line estimates; (6) price restrictions and poor quality - how the two go hand-in-hand; (7-8) ignoring P-page logic: overriding database labor times, blending within repaired panels, changing mechanical and structural labor to body labor; and (9) arbitrary capping of materials or operations.

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 I-CAR Meeting Manager Pat Perren (r) is the person who keeps the rooms full by working on attendance, sending out e-mails to attendees months before the event. Here she is with an attendee from Europe.

Respondents, who unilaterally asked not to be identified, answered these discussion points. Here are some of their observations: there is wide-spread manipulation of the user-defined profiles; third-party "administrators" are making changes to estimates without inspection of the vehicle; insurers are saying operations are "included" when, in fact, they may not be; and insurers are trying to use market averages instead of book times for alignments, glass and A/C service.

Some of the economic and customer relations issues impacted by these practices were: tax revenue shortfall; increased cost to the insurance company; increased cost to the shop; if the vehicle is not repaired properly then the customer is the innocent victim; delays in cycle time for the consumer and the repair facility; and ultimately dissatisfied customers. "We don't want to point fingers at any one segment," concluded Wano. "When is it laziness or lack of skills; when is it fraud? We need to hold estimators accountable."


A lack of skilled estimators

A panel discussion addressed the Estimating Committee report on reducing the number of supplements written. Five panelists - Craig Griffin, Laney's Collision, El Dorado, Arkansas; Roger Wright, AIG Insurance; Aaron Schulenberg, Bill Denney's CARSTAR, Havre de Grace, Maryland; and George Avery, State Farm Insurance, Bloomington, Illinois - fielded questions from committee chairman Chad Sulkala, ACME Body and Paint, Boston, Massachusetts. The Estimating Committee addressed how supplements affected the consumer, the insurance provider and the shop. It was suggested by many that the lack of skilled estimators may be at the core of the supplement problem.

Stacy Bartnik takes over leadership of Collision Industry Council (CIC)

Outgoing CIC Chairman Rick Tuuri introduced his successor 2007 Collision Industry Conference Chair Stacy Bartnik. Bartnik is CARSTAR Director of Franchise Services for the Chicago area and a long-time participant in the conference.

"I have big shoes to fill and I'm following some of my mentors in this business," Bartnik said. "It is an awesome responsibility and I'm thrilled to do it. I will do my best to help everyone in this industry."

Bartnik is the second woman to hold this position. In 1993, Nikki McDonald, Perry and Terry's Auto Body, Denver, Colorado, chaired the conference. Bartnik's career is steeped in the collision repair industry. She has managed a multi-million dollar repair facility and worked as a consultant for the international company Carter and Carter.

In 2004, Stacy was recognized by Akzo Nobel as one of the "Most Influential Women in the Collision Industry." She also currently serves as vice president of the National Auto Body Council and secretary of the Society of Collision Repair Specialists.

Collision repair shop owners are reporting "out of control" accounts receivable due to supplemental repairs. One overall consensus is that technology is diluting the skill sets of estimators. Some of the panelists indicated that the industry needs to change training to meet the technological level of today's car, stating that today's estimating skill set is diluted and estimators should still be handwriting a few estimates.

The audience spoke out about the need to keep database prices updated and current; about shops wanting to order parts only once; whether we can blueprint the repair; and the core issue of trust and control. Sulkala asked if we have over-complicated the collision repair process, sharing this analogy: "NASA spent millions of dollars to develop a pen to write in space and Russia used a pencil."

Quick Start

Jerry Burns, Automotive Impressions, Albuquerque, New Mexico, introduced the Automotive Service Association's new OEM Web Site - Quick Start. Burns said the National Automotive Service Task Force (NASTF) is working to simplify the process of gathering OEM technical information. "NASTF is working to see that all repairers have OEM repair information," stated Burns. "ASA's OEM Quick Start will walk repairers through the complicated process of finding the correct information," he continued. Quick Start can be found at www. asashop.org.

Executive Director Fred Iantorno of the Collision Industry Electronic Commerce Association (CIECA) an-nounced a Scholarship Memberships initiative. The program offers an unlimited number of one-year scholarship memberships allowing companies access and use of CIECA standards.

Health alert - Hexavelent chromium

Hexavelent chromium, a product widely used by collision repairers in the past, has been linked to health problems such as lung cancer and asthma. The product is less prevalent today, however, stricter OSHA regulations have recently gone into effect. Air monitoring and employee medical screening will be regulated by OSHA starting November 27, 2006 for shops with more than 19 employees and May 30, 2007 for shops with fewer than 19 employees. For detailed information go to www.epa.gov/ dfe/pubs/projects/auto/index .htm.

To review all CIC committee power point presentations go to www.ciclink.com, click on Committees and click on Committee Reports. The next CIC will be at the Mandalay Bay in Las Vegas, Nevada on Tuesday, October 31.

Janet Chaney has been in many facets of the collision industry. She is serving the best interest of her clients through Cave Creek Business Development. She can be reached at janet_chaney@earthlink.net