Sunday, 31 July 2005 17:00

Legislators continue efforts to improve parts competition

In an overwhelming 22 to 5 vote, members of the National Conference of Insurance Legislators (NCOIL) Property and Casualty committee agreed to continue their effort to protect consumers from both the "car company parts monopoly" and "poor quality aftermarket parts." After hearing testimony from both sides, the group created a special committee to address the issues necessary to develop a model bill on certified aftermarket crash parts that could be introduced in state legislatures around the country. 

Testifying in favor of the model bill were CAPA Executive Director Jack Gillis and Eileen Sottile representing Keystone, the nation's largest distributor of aftermarket crash parts.

Among those opposing the bill were Chad Sulkala of the Society of Collision Repair Specialists (SCRS); David Snyder (AIA); Erica Eversman, an Ohio attorney who specializes in collision repair issues; Stephen Regan from the Massachusetts Autobody Association; Mark Cobb, a Maine collision repairer; Steve Behrndt, a Pennsylvania repairer; and Automotive Service Association (ASA) Collision Division Director Darrell Amberson.

Status quo just fine?

Clearly, the members of the committee were not swayed by the fears and claims alleged by the car manufacturers, dealers and body shops who all said the status quo was fine.

"Of course it is just fine," said Jack Gillis, executive director of the non-profit Certified Automotive Parts Association (CAPA). "With the current parts monopoly, car companies, their dealers and body shops can charge outrageous prices for simple stamped sheet metal and plastic parts.

"In spite of opponents tortured arguments, incredible claims and convoluted reasons why the simple steps incorporated in the NCOIL model bill are impossible," said Gillis, "the committee agreed that the issue was important and needed to be resolved. So much so that they called upon the hearing attendees to submit suggestions to improve the bill."

NCOIL's efforts are following some positive state action to improve competition and quality. New York, New Jersey and Iowa have regulations or laws favorable to certification and The District of Columbia is considering certification. In California, a bill that would have declared CAPA-certified parts to be the equal of OEM parts failed to make it out of committee earlier this year.

"In the midst of all the rancor and accusations, CAPA continues to be the one and only organization working hard to successfully resolve the quality and market issues. We have set standards, listened to the industry, addressed problems and continue as the one, positive force in the market. The result - parts are better than ever before," proclaimed Gillis. "Which is no surprise, as certification has been embraced by the world for thousands of products."

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Gillis told the committee:"As you listen to the car companies and their compatriots - the dealers and shops - think back about the big drug companies and their partners, the drug stores when they fought like crazy against generic drugs. Just substitute car companies and their dealers with the drug companies and the body shops with the pharmacies and the arguments are the same. Remember them saying: 'It's impossible to make safe and effective alternatives, that drug companies have huge investments that need to be protected, and how in the world can generic drugs be effectively distributed.'

"In a few minutes you'll hear all these arguments again. But this time from the car companies and their partners, the body shops. Only now it's about simple stamped sheet metal and molded plastic car parts -- not the drugs that we depend on for our health."

Gillis also told the committee about recent GM and Ford activities. Gillis claimed that when GM recently implemented a multi-million dollar campaign to promote the fact that they tested an aftermarket bumper and a GM bumper and found that the GM bumper was better, they used the wrong aftermarket bumper in the tests.

He claimed that when Ford originally produced fenders for its controversial Explorer, it used aluminum. Later, after they achieved their fuel economy goals, they started selling steel fenders as replacements. "They are substituting steel for aluminum and claiming that their parts are of like, kind and quality. That would never happen with a CAPA-certified aftermarket part," Gillis claimed.

"The bottom line," said Gillis, "is that forward thinking body shops and, most importantly, the American consumer need and want quality competition. NCOIL has taken a positive step forward to insuring that this will happen."


ASA testifies to the contrary

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Automotive Service Association (ASA) Collision Division Director Darrell Amberson, AAM, also testified before the committee. ASA submitted written comments in opposition to state aftermarket parts certification legislation at the NCOIL Spring Meeting earlier this year.

"ASA does not believe that the aftermarket parts certification legislation under consideration adequately protects consumers or repairers. Vehicle owners deserve notice as to the types of parts used in the repair of their vehicles after an accident. The use of any replacement crash parts should follow only after written consent by the vehicle owner," Amberson stated.

"Before establishing state-sanctioned certification bureaucracies, I ask that you first allow our federal policymakers to get their house in order at the National Highway Traffic Safety Administration (NHTSA) in relation to aftermarket crash parts. Crash parts policy at NHTSA has a long way to go, but the law is in place to address safety concerns. If not, Congress should bear the burden of establishing expanded authority for NHTSA."

In 2001, the General Accounting Office (GAO) released a report on replacement crash parts as requested by the U.S. House of Representatives Committee on Energy and Commerce. The GAO concluded that existing studies of the safety of aftermarket crash parts and recycled airbags showed mixed results. The GAO also highlighted the inefficiencies or limitations of NHTSA's ability to determine aftermarket crash parts defects and recall system.

SCRS strongly opposes bill

The Society of Collision Repair Specialists (SCRS), a long-time critic of CAPA, took strong issue with the proposal in a number of areas. SCRS said in testimony through spokesman Chad Sulkala and in a later press release that legislation is not the answer to the aftermarket parts use issues, and regardless of language, is opposed in principle to any type of legislation mandating the manner or products in which a collision damaged vehicle is repaired. SCRS believes that the decision on what type of parts to be utilized should be that of the professional repairer, not outside influences.

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One of the areas SCRS is most opposed to is the identification of aftermarket parts as "equal to or better than" the original equipment parts they are replacing. The Original Equipment Manufacturer (OEM) part specifications utilized to manufacture the parts are not available to the aftermarket parts manufacturers. As a result, they are forced to reverse engineer the parts.

SCRS noted that the proposed legislation offers a weak definition of a "Third Party Certifier;" but one that resembles the credentials of CAPA. "This entity (CAPA) has proven time and time again to be rife with inconsistency and inferiority," said the SCRS press release.

SCRS also notes that "the entity certifying the quality, fit, finish and performance of these parts is omitted from offering or standing behind the warranty of the parts they certify."

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"Besides bringing forward issues that reflect negatively on quality, this is in direct conflict with the certifier's goal which is greater aftermarket parts acceptance," states SCRS Chairman Tom Moreland. He further added, "It's a process without adequate checks and balances."

Written objections presented

SCRS compiled an in-depth 23-page overview of the issues that had been summarized in the previous letter and sent it to the Committee in anticipation of the hearing. "We were given the opportunity to speak at the meeting, but only for two minutes," states SCRS Executive Director Dan Risley. "That being the case, we felt it important that our objections be submitted in detailed written form to adequately convey our message and substantiate our position, The document represents the core of our strategy to date."

"Although we felt the written testimony was the most critical component," says SCRS's Sulkala, "orally presenting our position in front of the legislators proved quite a positive experience. The Committee members appeared well-versed on the subject and based on the questions they asked, it was apparent they had taken the time to read our written testimony."





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