Retro News: DRPs 20 Years Ago, Early CCRE, ADP Revises Labor Times
Written by John Yoswick, Autobody News
Published October 27, 2014
20 years ago in the collision repair industry (November 1994)
Recently I read an article that was critical of industry leaders who had not taken a stand against DRPs. It brought to mind a discussion I once had with (a member) who said there are things associations can do that make some members happy, but that don’t mean anything. He called it “feel good stuff.”
For association leaders to denounce all DRPs when half or more of their membership participate in direct repair programs would be nothing more than “feel good stuff.” It feels good to those who are not DRP shops, but what about those member shops who chose to go DRP?
It’s very easy to criticize associations that have a neutral position on DRPs, but what would happen if they came out against them? The best any association can do is to rally against the abuses where they exist; to support legislation that protects a consumer’s right to choose the repair facility; and to do what it can to advise its members on how to determine if DRPs are a wise business decision for them. There are a number of individuals, some of them leaders, who continue to yell about DRPs without offering any real solutions. But regardless of what they have said, it’s the collision repair professionals who have voted by making the business decision whether to participate in these programs. All the yelling in the world won’t eliminate DRPs. Those of you who can’t accept that reality can keep yelling, or your can roll up your sleeves and go to work on the 65 percent of business that will never be DRP. Learn how to better market your business and sell collision repairs. Bury the DRP bogeyman and get to work. It’s in your best interest.
– From an editorial by John Loftus, then the executive director of the Society of Collision Repair Specialists (SCRS), published in Collision Expert. Loftus retired from SCRS in 2000.15 years ago in the collision repair industry (November 1999)
Mike Melfi said the Coalition for Collision Repair Equality (CCRE) was founded about three years ago as an organization to help like-minded shops owners around the country “take back control” of their businesses and reduce insurer influence over the industry. It was incorporated as a for-profit company so that it would never have to divulge a list of its members (which the organization refers to as “sponsors” or “clients”). About 80 people – including about a dozen attorneys – attended the group’s recent meeting in Phoenix.
“These attorneys are just now realizing that there’s money to be made in property damage litigation,” said Ann Spink, a Louisiana shop owner and vice president of CCRE. “We believe that legislation and education is part of the answer but litigation is the bottom line. The reason CCRE exists is to try to put together the documentation and the expert witnesses to help these attorneys understand how to litigate for us. And because they’re class action attorneys, we don’t have to pay them, just help educate them.”
Shop owner Melfi told CCRE participants he had predicted the first non-OEM parts lawsuit “victory” would take two years. “It took three years,” he admitted. “But now I have another prediction. If steering continues, one day on the 6 o’clock news, you’re going to see an executive of an insurance company in handcuffs being put in a federal marshal’s car being charged with federal racketeering.”
– As reported in Parts & People. The non-OEM parts lawsuit victory Melfi referred to was the $1.1 billion judgment against State Farm in 1999, which the Illinois Supreme Court overturned in 2005. A class action lawsuit filed in Illinois earlier this year alleges that seven of the Top 10 insurers violate federal racketeering laws by illegally conspiring to use their direct repair programs and other means to enforce “an artificial market value for collision repairs.”10 years ago in the collision repair industry (November 2004)
A widespread and significant drop in ADP refinish labor times discovered in recent weeks will be corrected in ADP’s November CD update release, which the company says has been sent to ADP customers.
“The operational issues with the refinish times in the October CD are revised in the November CD,” Scott Jenkins, senior director of “Estimating Solutions” for ADP said. “The November CD is consistent with the September CD. If the user did not load the October CD, they were not impacted. We are instructing our customers to load the November CD immediately upon receipt.”
The October CD included many decreased refinish labor times of 10 percent or more. Refinish times for 2000-2004 Ford Taurus hood, for example, dropped from 3.9 on the September ADP CD to 3.4 on the October CD. Times for a 1999-2004 Pontiac Grand Am fender dropped from 2.4 to 1.9, and the front door time for a 1999-2004 Chevy Cavalier dropped from 3.1 to 2.8. Although some have looked for some sort of intent behind the widespread reductions, ADP, while avoiding using the term “mistake,” maintains that the problem was an “operational issue,” not an attempt to shave labor times.
“Some of our clients have experienced an operational issue regarding refinish labor on hoods, doors, fenders, roofs, decklid/tailgates and back doors,” Peggy Adams, operations manager for client services for ADP, wrote in an email response to questions about the October CD. “All new estimates created with the November CD reflect the updated refinish labor. We apologize to our clients for any inconvenience we may have caused.”
The issue has resulted in a flurry of email activity between shops and industry organizations since it came to light in early November. Part of the concern was fueled by the fact that various ADP personnel were giving conflicting - or, at a minimum, ambiguous - responses to questions about the labor time changes. An ADP tech support employee, for example, told one ADP shop customer in the Pacific Northwest that the revised times were based on “new time studies” ADP had done.
– As reported in Autobody News. Prior to shops accessing the estimating database information over the Internet, the system providers sent monthly updates to the data to shops on compact discs. ADP’s Claims Services Group (including its estimating system) was acquired by Audatex (now AudaExplore) in 2006.5
years ago in the collision repair industry (November 2009)
In the transcript of a small claims appeal trial involving two of customers of G & C Auto Body of Santa Rosa, Calif., California Superior Court Judge James Bertoli took State Farm to task for its rate survey process and arguments regarding reasonable repair costs.
Shop owner Gene Crozat’s customers had won after filing small claims court cases against State Farm insureds when the insurer refused to pay all of G & C’s charges. The insurer appealed both cases, and the court heard the two appeals together over two days. Bertoli said State Farm could use whatever method it specified in the insurance contract to determine a reasonable price in first-party claims, even if they determined that price, “by reading chicken entrails, and consulting with the three witches from MacBeth (which is) just about as accurate as the survey itself is. I think that survey from a statistical standpoint would get a first-year college student a flunking grade.”
But in a third-party case, the judge said, a reasonable charge “implies a range of charges” and “no particular charge can be said to be the only reasonable charge.” He said State Farm did not try to establish that G & C’s rate was unreasonable, and it appears to fall within a reasonable range of prices.
“Quite frankly with regard to the third-party claims, this Court does not believe they should have been litigated,” Bertoli said in finding for Crozat’s customers. “I think the answer is clear, and I quite frankly see it as an effort on behalf of the insurer to try and suppress the price charged by someone outside of their range.”
– As reported in CRASH Network (www.CrashNetwork.com), November 16, 2009.