Boston was established in 1630 by Puritans seeking rights they had been denied in the old world. It is a city renowned as a leader in innovation, and the large population of teachers and students who congregate in its plethora of educational facilities has caused many to dub Boston as the “Athens of America.” The Boston Tea Party is just one example of Bostonians overthrowing the tyranny of a ruling third party who wanted to dictate costs that were none of their concern. With such a reputation, it is fitting that collision repair professionals chose Boston as the place to gather and discuss current trends and concerns in this ever-changing industry.
Held in conjunction with I-CAR’s meetings in the same location, the Collision Industry Conference (CIC) met on Tuesday, July 23 and Wednesday, July 24 at the Westin Boston Waterfront, located at 425 Summer Street. Over 200 collision repair professionals gathered in the hotel’s Grand Ballroom to hear what’s been going on at CIC and throughout the industry as a whole.
After Chairman George Avery called the meeting to order on Tuesday afternoon, CIC opened with the national anthem, accompanied by a video which depicted a collage of American scenery and symbolism. This was followed by a general welcome, antitrust guidelines and finally CIC’s mission statement which establishes the meeting as “a forum where collision industry stakeholders come together to discuss issues, build broad understanding, find common ground and communicate to the industry at-large, findings and possible solutions.”
John Van Alstyne, President and CEO of I-CAR, briefly advertised Thursday’s Collision Repair Education Foundation (CREF) golf tournament with which I-CAR is affiliated, and then Dan Risley, Executive Director of ASA, announced that I-CAR, CIC, NACE and CREF are collaborating to put on an Industry Week at the Cobo Center in Detroit MI during the week of July 28 through August 2, 2014. (See related article on cover.)
After CIC’s Technical Committee briefly submitted their findings regarding an increase in technical issues and the need for assistance with logistics, John Petrarca from the Auto Body Association of Rhode Island (ABARI) took the stage to discuss the recent approval of House Bill 5263 which redirects the ability to deem a car a total loss apart from the insurer. Petrarca emphasized the importance of legislation: “the only way to correct our industry is through legislation… [we must] never stop informing and simply never give up.” He said it is imperative that this industry persists with informing and educating consumers for the betterment of the industry at large.
This update preceded a presentation by the Governmental Committee, led by Janet Cheney and Steve Regan, entitled “Our Government: More or Less, What Works Best?” which began by sharing the feedback from CIC’s last panel discussion in Phoenix. The first question asked whether the government should prohibit insurers from recommending a repairer to the consumer. Shockingly to some, the majority of participants responded in the negative, as they did to the question asking if the government should regulate the use of aftermarket parts. When asked their opinion about the level of government involvement regarding environmental and safety laws, 56% believed it to be too much while 32% felt the government is involved a sufficient amount.
As the committee moved on to the second part of their presentation, Regan introduced the panel: Colette Bruce of Team Safety, Darrell Anderson of ASA, Randy Hanson from Allstate Insurance, Rick Tuuri from Audatex and Ron Reichen, Chairman of SCRS. When asked if the laws and regulations governing the collision repair industry are working, Anderson stressed the importance of being aware of what’s going on in Washington, while Bruce believes the laws are working when they protect workers and the environment. Regan then asked the audience if more laws are needed to which 69% of respondents answered “no.” The majority of respondents said they do not believe that current laws are adequately enforced.
The panel then discussed whether federal or state governments should have primary jurisdiction over the insurance collision repair industry. Tuuri feels it is not a great idea to involve the government, yet he also recognizes that sometimes it is necessary to ask for help. Anderson believes that both entities should be involved, though state regulations tend to be convoluted and should require some consistency. Attendees were about equally divided between these two options when polled.
Asking if the collision repair industry could do a better job of governing itself, Regan shared his opinion that it’s “incumbent on the industry to do as much as it can to govern itself.” Tuuri prefers this option to involving the government, while Reichen agrees that the industry could do a better job. Bruce would prefer to see the industry govern itself also, but he cannot envision the federal or state governments relinquishing such control. When polled, 87% of respondents replied affirmatively that the industry could do a better job of governing itself.
This conversation raised several additional questions: Who would have primary responsibility? How would they determine the appropriate conduct and/or standards that individual stakeholders would abide by? How would they enforce actions against violators? These questions were tabled for future committee discussion.
The conference continued with Ron Guilliams, Chris Evans and Rick Tuuri from the Definitions Committee whose mission is to “clarify and bring universal understanding to the terminology used in the automotive damage repair and refinish process.” Their project consisted of reviewing and updating their Class A shop document which they renamed “Recommended Equipment and Capabilities for a Collision Repair Facility” and which is meant to provide a definition of minimum shop requirements. In order to enable the subcommittees to focus in their areas of expertise, the document was divided into the following three categories: Equipment & Capabilities, Training & Certification, and Compliance & Sustainability. They pointed out that a great deal of effort has gone into creating this document with lots of active participation from the CIC body, leaving Evans convinced that this is a comprehensive document which represents the next generation of the Class A Repair Standards document which has existed for many years. The information gathered will now be transitioned over to the Standards Committee to use in their work.
As soon as attendees were given the opportunity to respond, the body was eager to learn what will happen to shops that do not meet these requirements since many shops do not meet these standards, to which Avery responded that the topic should be postponed until November, after the Standards Committee has the chance to see where and how the document fits into their work. Evans stressed that this document is mostly just updated with current technology from previous documents with improvements and enhancements as appropriate for what exists in the industry now.
Schulenburg then repeated the title of the document, “Recommended Equipment and Capabilities for a Collision Repair Facility”, asking “to do what?” He said he does not believe that these requirements necessarily translate into being able to fix a car or to be considered a viable collision repair facility. Though he sees the benefits of many of the items on the list, including some of the systems, he does not agree that anyone other than the shop owner should be able to decide what is needed. Schulenburg questioned if this document is indicative of requirements mandated by insurers to participate on their programs.
The Definitions Committee again defended their document, pointing out that they are trying to define a baseline for a topic that contains many variables. Additionally, Jeff Hendler reminded attendees that the document is only a document; it does not have authority unless the government mandates its authority or insurers require these recommendations in order to participate in their DRPs. Hendler believes it is necessary to develop something “to distinguish between those that do and those that don’t, those who almost get there and those who actually do.”
Michael Quinn, former CIC?Chair now of uParts, Inc., then led the presentation by the Standards Committee which began in 2006 and is scheduled to close after they submit their research on the inspections and verifications aspects of repair standards at SEMA in November. The Standards Committee is in agreement with the various repair trade association and their position that OEM repair procedures are the default standard. The questions they seek to answer by November, as gathered from the CIC body at previous meetings include: Does this include OEM recommendations? Does it apply to body repairs and paint procedures? Is this OEM Part Replacement Procedures? What is procedures aren’t available? What resources are available?
Van Alstyne then lead discussion on the lack of clarity on positions regarding OEM procedures. Though he believes OEM repair procedures should be the standard, they are not available from all manufacturers, leaving repairers to do their best to safely repair vehicles. I-CAR plans to work with OEMs to determine these standards and to institute best practice procedures in order to add to I-CAR’s curriculum.
Van Alstyne noted that I-CAR’s Repairability and Technical Support Program has been approved by their Board and is proceeding with the intention of instituting an industry technical knowledge portal, repairability summits, an industry/OEM repairability linking pin and a technical industry segment advisory council. They also plan to expand their technical team through an increased load of courses, including new classes. Van Alstyne said, “we are serious about this and believe we can add value for the benefit of the industry.”
Tony Molla, Vice President of Communications for the National Institute of Automotive Service Excellence (ASE) presented their position statement. ASE recognizes OEM service procedures as the primary guide to repairs, but where no such procedures exist, ASE recommends using the National Automotive Service Task Force (NASTF) to collect and identify gaps in repair information; ASE is prepared to cooperate with any segment of the industry to provide individual technician certification credentials where appropriate.
After a brief history of CIECA, which was founded in 1994, Executive Director Fred Iantorno noted “change is happening all the time.” The pace of this technology began in 2000, and the BMS standard, which was first published in 2004, has expanded into 19 versions to keep pace with the growth of information and technological requirements. Now, technology is moving into a new revolution of mobile and cloud technology. Iantorno believes that collaboration and representation are the keys to success with each industry segment being represented in the Board and on committees. Still, he reminded attendees, standard development isn’t a “once and done” environment; the industry is constantly changing, so standards work never ends unless the industry is dying.
Michael Condon, Principal of Condon Consulting LLC, presented the Repair Standards Entity Research Executive Summary, explaining that research was conducted via 42 anonymous interviews with industry professionals, broken down into 43% repairers, 17% associations, 14% insurers, 7% OEM, 12% suppliers and 7% research training certification programs. The questions explored the importance and expectations of success, scope of CIC’s rule, level of support by the industry, value of certifications and valuations, the standards “gap” and possible preferred business models, comparing the GAAP model, the licensing model and the institute model.
Results indicated that insurers and OEMs are less enamored by the initiative than other segments of the industry, and while CIC’s role is viewed as somewhat important, there were many dissenters. Most respondents agreed that there is a gap in the repair standards procedures which needs to be filled, but success is viewed as questionable because of its complexity, a lack of leadership and the absence of a compelling value proposition. The consensus reached by all segments of the industry appeared to be that insurers should not be involved in establishing repair standards. All of the proposed business models demonstrated strengths and weaknesses, indicating that a hybrid of the three proposed models should be considered.
Based on the results, in order to move forward, CIC and their committees must develop industry consensus on the mission and the scope of the effort, plus develop compelling value propositions for select segments as required, and finally, they need to aggressively address the issue of independence for the technical bodies responsible for repair standards. Before the Standards Committee closes in November, their agenda is to explore possible solutions and to determine what the American National Standards Institute (ANSI) does and how other industries have embarked on creating standards, according to Paul Krauss, CEO of Craftsmen Auto Body.
Jeff Hendler announced that the next CIC meeting will be held at SEMA in Las Vegas and will begin with the Collision Industry Awards. The first day concluded with George Avery’s message that it’s time to visit some of the issues addressed so that the industry can take the next steps.
On Wednesday the meeting resumed with Cheryl Boswell of the Collision Industry Foundation (CIF) explaining their mission to collect and distribute funds to shops in need, sharing how they donated $2000 to two different Staten Island shops after Hurricane Sandy. CIF has also raised over $25 million for disaster assistance following the deadly tornadoes in Oklahoma. The Foundation will hold their annual fundraising event on Thursday, January 16, 2014 at 6 pm at Lulu California Bistro during the spring CIC meeting in Palm Springs.
The Parts and Materials Committee then gathered a panel to present on their Electronic Parts Procurement Survey. The panel was composed of Mike Kunkel of Team PRP, Michael Quinn of uParts Inc., Mary Lou Lubrano of Car-Part.com, Aaron Lofrano of Lofrano & Sons Collision Centers, and Karen Fierst of KerenOr Consulting. Asking that only repairers respond, they questioned the relevance of the seven categories of questions included in their survey of 30 questions. Their goal is to develop a document that repairers can use to compare the features of various parts procurement systems.
Audience comments indicated that questions should be as specific as possible, but attempts to discuss free market competition were brushed aside for the moment as Avery suggested that the topic be resumed at the November meeting where it could be facilitated by a committee of past Chairs. Returning to the matter at hand, attendees presented questions about integration, profit margins and business models. The committee’s next steps will be to evaluate responses, then finalize and conduct the survey so that they can analyze their findings to be reported at SEMA.
Next to take the stage was the Insurer-Repairer Relations Committee which consisted of Ti Adelmann of ABRA, Doug Irish of VeriFacts, Ron Vincenzi of Oakland Auto Body, Aaron Schulenburg of SCRS, Jeff Peevy of I-CAR, Randy Hanson of Allstate Insurance, and Mark Allen from Audi. Since their focus is on training as it relates to insurer-repairer relations, they asked the audience “who has taken a training program in the past 12 months of their own volition?”—64% of attendees responded in the affirmative with 45% of them saying they did so because it improves their ability to ensure a safe repair.
Peevy discussed the current collision training landscape, noting that 69% of facilities have no consistent tech training. He believes “the work of the future is going to be different because technology is changing at such a rapid rate.” This is why training is so important; consistent training has been proven to improve cycle time, touch time and CSI scores across the board. Furthermore, CynCast Ratings indicated that I-CAR Gold Class shops outscored other shops by 32%, suggesting that the accomplishment of receiving the Gold Class certification is a predictive indicator of success. Peevy believes that the shops that will survive the changes coming in the industry are those with proper equipment, consistent training, access to OEM information and continuous operational improvements which comply with regulations.
When Vincenzi was asked why he was one of the shops to become Gold Class certified, he noted that he wanted to do the right thing to ensure he was correctly repairing vehicles for his customers’ safety. “It wasn’t a business decision; it was a moral decision. I’ve found that if you make a moral decision, it ends up being a good business decision.”
Hanson agreed that education and training provide an effective way to address many of the industry’s concerns. Schulenburg also agrees that training is a good thing, but in reference to relationships between insurers and repairers, he noted that much friction arises from pricing models because many shops that invest heavily in training are paid the same as those that do not, yet it’s imperative the investments yield returns in order to run a successful business.
Though Irish does not foresee a pricing schedule based on training, mainly because insurers don’t want to be responsible for addressing whether repairs are done properly and efficiently, training offers many other value benefits and affects recruiting, retention and morale. Schulenburg’s rebuttal emphasized the inequality of stating insurers cannot be expected to change while simultaneously insisting repairers change, suggesting there’s a need to “discuss how to incentivize repairers for training.” Vincenzi suggested that insurers should make sure to do business with shops that are properly trained and equipped, recommending that adequate training should weigh more heavily in how a shop is rated than other factors, such as cycle time.
CIECA’s Fred Iantorno then led the Education Committee’s presentation on “The Value that You Can’t See in BMS,” explaining that the BMS is a collection of 146 data exchange formats which support an equal number of business functions, allowing companies to transmit only necessary data without compromising confidentiality. CIECA developed the BMS for use by all facets of the collision repair industry to facilitate the increasing data flow caused by progresses in technology. The BMS also serves another important business function: providing responses to the messages received.
The next step will involve taking this data content and implementing it for mobile and cloud computing as these technologies are assuming a monopolizing role within the industry. The project has already been initiated with three messages being selected to develop and pilot so that CIECA can review and refine their results in order to select and prioritize existing BMS messages in order to add the mobile and cloud versions of their packages. CIECA’s comprehensive suite of business messages is intended to improve the industry’s efficiency as these messages cover a wide range of business functions that include something for every segment of the industry.
Toby Chess then lead a Technical Presentation entitled “Everything You Wanted to Know about Glass and More.” reminding attendees that the main functions of windshields in modern vehicles is the vehicle structure, to be part of the frontal air-bag system, and to restrain passengers in the vehicle. He continued to discuss the types of vehicle glass, indicating that the labels, or “bugs,” on the glass indicate the type of glass used; only A1 glass should be used for windshields as it is laminated and provides at least 70% light transmission, making it the clearest automotive glass used.
Chess reviewed the differences between laminated and tempered glass and suggested that since modern vehicles are designed with the windshield bug being a key structural component, it is imperative that it be constructed and repaired accordingly for consumer safety. He discussed the differences between OE and aftermarket glass, noting that AFM glass cannot duplicate OE glass; it must possess a different curvature, thickness or composition. After discussing the differences between adhesive and cohesive failures, he raised attendees’ eyebrowsl by stating that there are no federal specifications about the type of glass used as federal regulations are based only on the process of installation and performance in an accident.
After ascertaining interest in having a panel investigate these issues with automotive glass, to be shared in November, Avery adjourned the meeting.