Northeastern News

1HomePageMap small ne 0816Local news stories affecting the auto body industry in New York, New Jersey, Pennsylvania, Delaware, Connecticut, Maryland, Rhode Island, Massachusetts, New Hampshire, Vermont and Maine

The Allstate Corporation announced January 6 that the Superior Court of New Jersey has entered judgment in favor of Allstate New Jersey Insurance Company, a wholly owned subsidiary of Allstate Insurance Company, and dismissed all claims in the franchise lawsuits filed against Allstate New Jersey.

Last year, three exclusive agents filed lawsuits seeking to prevent the termination of their agency agreements for failing to meet certain business objectives. They alleged they had franchise relationships with Allstate New Jersey and were protected under the New Jersey Franchise Practices Act. The plaintiffs' application to stop their termination was denied.

The court determined that the agents were not franchisees and have no protections under the New Jersey Franchise Practices Act. The court noted in its decision that the "insurance industry has never been found by any court in New Jersey, or elsewhere, to be home to an insurance company franchisor, or agent franchisee."

Allstate has maintained that exclusive agents are independent contractor agents and not franchisees. The court decision affirms the company's position.

Please visit www.allstate.com or call 1-800 Allstate® for more information.

Congressman Mike Kelly (R-PA) introduced into the House of Representatives on December 30 a bill aiming to do away with the $7,500 tax credit for electric vehicle car buyers, titled HR3768.

Kelly, who owns a Chevy Car Dealership in Butler, Penn., has served in the House representing the 3rd District of Pennsylvania since 2010.

The bill, formally titled: "To amend the Internal Revenue Code of 1986 to repeal the credit for plug-in electric drive vehicles", would amend the IRS code section related to the electric car purchase tax credit, to terminate the tax credit.

The $7,500 tax credit came into being in the Emergency Economic Stabilization Act of 2008 (EESA), whose main purpose was the bailout of the financial industry following the meltdown of Sept 2008. The credit was put in place by former President George W. Bush, and continued by President Barack Obama.

Kelly's personal experience as a dealership owner is suspected to have fueled his introduction of this bill. Kelly's dealership, which was founded by his father, was almost axed during the GM bankruptcy. When the Obama Administration Auto Task Force announced plans to shut down more than 1,900 dealerships, including Kelly's own dealership, his response was to fight the decision to close his dealership, in which he was successful.

Reports are that after avoiding shut-down Kelly's own car dealership took extra steps to shun the Chevy Volt, even going to far as to fire an employee who consented to GM's request that they bring in a Volt.

"I can stock a Chevy Cruze, which is about a $17,500 car and turns every 30 to 40 days out of inventory or I can have a Volt, which never turns and creates nothing for me on the lot except interest costs," said Kelly in October. "There is no market for this car."

Kelly echoes the main argument espoused by many anti-EV advocates—-that electric cars are simply toys for rich people. Kelly says that subsidizing the purchases of upper-income individuals is not the correct course of action to take during these difficult financial times. According to Kelly, the $7,500 credit goes to the "few who can actually afford to buy an electric car."

Ron Ertley, founder of Ertley MotorWorld in Wilkes-Barre, PA, and operater of Ertley Dealership in Moosic, PA, passed away January 7 from cancer at 79.

Ertley, founder, owner and CEO of Ertley MotorWorld was remembered as an innovator in the automobile sales business by co-workers and friends at a service held January 12 at St. Stephen's Episcopal Church in Wilkes-Barre, according to the Scranton Times-Tribune.

After graduating from Duke University in North Carolina and receiving an honorable discharge from the Air Force, Ertley returned to eastern Pennsylvania to manage an Oldsmobile dealership with his father. Ertley grew to own the dealership after his father's retirement.

In 1991 Ertley became the first in the area to combine dealerships--founding Ertley MotorWorld in 1991 with the help of his friend and colleague, J. David Power of JD Power and Associates. Ertley MotorWorld was a powerhouse in the eastern Pennsylvania area and was considered the area's first auto mall with 12 dealerships in one location.

"Main thing I remember is his innovation and willingness to try whatever the latest and greatest technology and techniques were to move forward in the automotive industry," Rick Osick, who worked with Mr. Ertley at MotorWorld, told the Scranton Times-Tribune. "He was known as an innovator as far as technology and methods to move a retail business along."

Ertley eventually sold Ertley MotorWorld to investors, and it still exists today, as MotorWorld.

Ertley remained in the auto dealership industry, opening a Chrylser-Jeep-Dodge-Kia dealership in Moosic.

As a member of the board of the JD Power Superdealer Rountable, a director of the Pennsylvania Automobile Association, a commissioner on the state Board of Transportation and the president of several other automobile dealer boards, Ertley was very active in the Pennsylvania automotive industry.

Back in October Autobody News interviewed Joseph Carioti III about his NJ shop, McBride Auto Body, which had suffered flood damage from Hurricane Irene. (See Autobody News November 2011 Edition) The business was able to recover from the flooding and is back on track, but there’s more to the story.

A six-year long fraud case filed against Bedford Hills, NY’s North State Custom by Progressive Insurance seems to be coming to an end at last. Attorneys for Progressive in September notified the court and counsel for the shop that the company did not intend to proceed with an appeal.

“We don’t know exactly why they decided not to appeal, but I’m certainly happy they did,” said North State owner Greg Coccaro.

In 2005, the customer, a handicapped professor from Columbia University, asked Coccaro to repair her 6-month-old 2004 Mercedes E320 that she had rolled down an embankment and crashed into a pile of rocks. Progressive Insurance wrote an on-site initial estimate of $7,142. Once the car was taken to Coccaro’s shop—which was not a Progressive DRP (Coccaro has no DRPs)—he found far more damage in addition to mistakes on the original estimate. According to Coccaro, Progressive eventually wrote another estimate for $26,804, then a third one for $18,000 after a desk review reduced that second estimate, and then another. All told there were some 10 estimates done. Coccaro’s final carefully-documented invoice for the full repair came in at $34,091.

Progressive then tried to recall the car from Coccaro after repairs had commenced and steer it to one of their select shops but was unsuccessful in convincing the customer. When the second estimate came in at $26,804, the customer confirmed she wanted North State to do the job, she agreed to pay any expenses beyond the $26,804. Progressive finally agreed to pay Coccaro’s invoice after the customer’s son, who had a relationship of sorts with the insurer, became involved.

Once in smithereens, now ready for business, the old auto body shop at 703 Yates St. is rehabilitated and owner, Robert Savoca, is excited to see an auto body shop return to the Pine Hills neighborhood of Albany, NY.

The process to change the auto body shop back to a safe and functional establishment wasn’t quick, or easy. Since Savoca is also the owner of Central Crossings; a construction company on 5 Lombard St. in Schenectady, his arsenal is well-equipped to take on all kinds of structural challenges.

When he bought the garage from Mella Weaver for $55,000, he said it was a disaster. “The building was a complete mess. No heat, no running water, leaky roof, broken windows, uninhabitable that’s for sure,” Savoca said.

The property also had electrical issues, no exterior or interior lighting, perforated floors and walls, bad plumbing and the basement floor had to be resurfaced. According to Savoca, all of these structural abnormalities cost him an additional $50,000 to repair, and took about 90 days for his crew of carpenters, roofers, plumbers and electricians to finish all of the projects.

Savoca, who owns Fort Orange Motor Car at 551 Central Ave. in Albany, has experience in the auto repair business and was familiar with the old Yates Street garage.

He said that the Pine Hills is a great location for a new auto body shop because there is only one other body shop in the neighborhood limits —D & S Body Shop on 465 Jay St. Also, because an auto repair business has thrived there for so many years, whoever plans to reopen one is almost guaranteed business, he said. Savoca also mentioned that a shop in that location would directly benefit residents and students who might need to have their cars serviced.

“I drive an old 1996 Saturn that breaks down all of the time,” said Kayleigh Buboltz, a neighborhood college student. “If there was a shop closer to me, I could have saved a lot of money on towing costs.”

After the rehabilitation was complete, Savoca hired Brandon Bellamy, a licensed salesperson at IKON Realty Group, LLC to help lease the property. According to Bellamy the property has been available to lease since October 18. Ikon plans to lease the property for $1,550 a month. The garage includes a basement and first floor equaling out to about 1,368 square feet. Other features include an overhead garage door, 1 1/2 bathroom, and one office on each floor. The property also comes with a private parking lot that holds up to 10 vehicles.

Bellamy has encountered multiple customers interested in renting the property. Unfortunately these potential tenants all possessed ulterior motives to turn the building into something outside of the auto repair business.

According to Savoca, customers wanted to convert the garage into a hamburger hotdog stand, a fish fry and a hair salon. He declined their offers.

Since the day Savoca bought the debilitated property, he envisioned a new and improved auto body shop and has no desire to lease to customers who suggest otherwise.

“I don’t think I found the right person to sell it to, so I’ll just wait until they come along,” said Savoca.

Potential buyers, or those interested in leasing the property, can contact Bellamy via telephone, 518-456-5440 ext. 14. Or you can reach him online at: bbellamy@ikonrealtygroup.com.