The Year In Quotes: What the industry was talking about throughout 2014 compiled by John Yoswick
There was no shortage of topics for collision repairers to discuss this past year, from gearing up to work on the aluminum Ford F-150 to the nearly two dozen lawsuits filed in which shops accuse of insurers of conspiring to manipulate labor rates and other shop charges to reduce costs. There were election battles, discussion of requirements placed on shops by insurers or automakers, and movement in the long-standing effort to get access to more OEM repair information.
Here’s our annual look at some of the most important, interesting or entertaining quotes within the industry during the past 12 months.
“We’re sitting amongst a lot of people with a map in their hands saying they don’t have directions. No one is bothering to look these things up. If you don’t go look for those procedures, it’s like you’re building that bicycle on Christmas Eve without looking at that little sheet of paper about how to put it together. Shame on you. You shouldn’t be repairing cars.” – Mark Allen of Audi of America, on the failure of many shops to acquire the OEM collision repair procedures that are available.
“We have OEMs who have written sectioning and repair procedures, saying this is how it should be done, and then we have insurance carriers who will say, ‘I can get it done cheaper down the street.’ That’s a major issue.” – Oregon shop owner Ron Reichen, chairman of the SCRS board of directors.
"I am so tired of coming up here with facts and figures and having to defend against lies.” – Jina Petrarca-Karampetsos, attorney representing Auto Body Association of Rhode Island, after a contentious state legislative hearing on several bills backed by the shop association but opposed by the Property Casualty Insurers Association of America.
“It’s really critical when you get the box, don’t just throw it away. Pull the instruction sheet out and make sure the tech has it, that it goes with the work order.” – Ford Motor Company’s Paul Massie on the fact that replacement parts for the aluminum-intensive 2015 Ford F-150 will be packaged with instruction sheets for installation.
“That means in Year 1, in a major metro area, in a single month there might be nine pick-ups of that particular model that might require some type of repair. By Year 5 in a market, it might be as many as 300, but in a major market area, that’s obviously still not significant.” – Susanna Gotsch of CCC Information Services, saying her research based on the roll-out of the current F-150 indicates it will take some time before most shops will be seeing many of the new 2015or newer aluminum F-150s.
“There’s no way, even though I’m one of the leading shops in the community, that I can purchase and afford all the equipment from all the manufacturers. If [an automaker] doesn’t have the wherewithal to test all these tools, how is a small business like mine able to buy all these manufacturer-specific tools to fix all these different cars?” – Minnesota shop owner Roger Bonn, saying at a meeting last spring that the various OEM equipment requirements make it challenging for shops that want to earn multiple automaker certifications; one automaker representative at the meeting had said his company requires specific equipment it has tested to ensure repeatable results, and that it can’t crash-test vehicles repaired with 20 different versions of equipment.
“Automobile repair parts are similar to toner cartridges in that the original design of the automotive exterior and original design of the automotive parts dictates the exact design of the automobile repair part.” - The Automotive Body Parts Association (ABPA), which represents manufacturers and distributors of non-OEM parts, in its legal argument against the validity of Ford Motor Company’s “design patents” on certain crash parts.
“We got there and told him, ‘Hey, you’re really going to affect our business. This is how many jobs we have in your district.’ He was absolutely embarrassed for introducing this bill, and he actually pulled it from the agenda.” - Ray Colas, director of government affairs for LKQ Corporation, telling attendees at the ABPA convention about an Iowa lawmaker that needed to be “re-educated” after he introduced a state bill that would have mandated that insurers pay for new OEM parts for vehicles five years old or newer.
“It is unfortunate that the driving public is bombarded daily with billions of dollars of advertising the insurers are spending to convince them that they are a "good neighbor,’ or ‘on their side.’ But once this action begins to unfold, the real nature of what has been happening will certainly be revealed.” – Tony Passwater, executive director of the Indiana Auto Body Association, after the association joined with a number of shops in that state to sue insurers who they say “improperly and illegally control and depress the automobile damage repair costs."
“We have not noticed a lower return rate on [parts ordered through] PartsTrader versus phone calls versus faxes versus anything. Our return rate is higher than it’s ever been in the history of the company.” – Bob Petty of Collins Collision Products, a non-OEM parts distributor in Loveland, Colo., after a PartsTrader representative told a gathering of distributors that one of the benefits of PartsTrader is fewer parts returns.
“Making that decision in a silo has some consequences that maybe are not going to be the best for everyone in the long run. It shows the validity of having a forum like CIC where the disparate parts of the industry can get together and talk and come up with some potential solutions.” – Incoming Collision Industry Conference (CIC) chairman Randy Stabler, speaking at November’s CIC meeting at which General Motors surprised many in the industry by announcing it was switching to a new real-time pricing system for crash parts, discontinuing the publication of traditional list prices.
“State Farm has created a culture of unsafe business practices in which consumer vehicle repairs are performed with cost-savings as the primary goal rather than safety and reliability.” - Louisiana’s Attorney General James “Buddy” Caldwell in announcing his state’s lawsuit against the insurer alleging that State Farm’s practices and its Select Service program result in manipulation of shop labor rates and compensation, and strong-arms shops into using unsafe parts (State Farm has denied any wrongdoing).
“At the end of last year, the United Kingdom Competition Commission came out with its preliminary findings of its review of the insurance industry in the U.K., and there was one sentence that I think succinctly sums up the biggest industry issue we have: 'Competition between repairers to obtain business from insurers is focused on low cost rather than high quality of repair. That is, repairers are insufficiently rewarded for offering a high quality of repair.' I think if the consumer market were to demand [an end to] the practice of indemnifying losses based on low-cost principles rather than high-quality of repair, the market would provide the necessary incentive for more of the industry to focus on quality adherence and consumer experience. – Aaron Schulenburg, executive director of the Society of Collision Repair Specialists (SCRS)
“We really want to put this information into technician’s hands. They may not walk up to the front of the shop to ask a technical question. But if they have the answer in their pocket, maybe they are more likely to take a look to see what they can find on the website.” – Jason Bartanen, director of industry technical relations for I-CAR, in unveiling the new “Repairability Technical Support Portal,” I-CAR’s effort to put OEM repair procedures and vehicle information as close to technicians as the nearest computer, tablet or smartphone screen
“A majority of autobody repair shops and insurance companies are reputable [and] honest…However, my office will hold accountable any shops or insurance companies who would seek to defraud Oklahomans through the illegal practice of steering.” – Oklahoma Attorney General Scott Pruitt in a warning his office issued about the practice of “steering,” in which he said “insurers strongly push consumers to autobody repair shops that may provide substandard service to consumers.”
“At that point, it may become competitive for [insurers seeking] repair space in attractive and well-equipped, top performing shops. You may see some of the Tier 1 and Tier 2 insurance companies changing their programs. Those programs have become so hard to manage that those insurers may find they have to be more competitive in order to get the repair space that they need.” – Torie Mahnke, chief financial officer for Mahnke Auto Body, which has four locations in Colorado, on a shift she envisions once an MSO reaches the 1,000-shop mark, something she predicts will happen in 2018.
“Then when we’re not open, it’s spinning backwards and selling energy back to the grid. We’re making somewhere around $30,000 just for the energy we’re selling back.” – Mike LeVasseur of Pennsylvania-based Keenan Auto Body, on his company’s installation of a solar power generating system at one of its locations.
“I have two young drivers in my family. It scares me enough giving them the keys and letting them go, but thinking they may be in a car that may have some sort of counterfeit part, whether it’s an airbag, windshield, brake shoes, whatever those parts may be, if they’re not the legitimate parts that are safely tested for that vehicle, I don’t want my kids driving that vehicle.” – William Hayes, a deputy special agent with the Homeland Security department, discussing his agency’s crackdown on counterfeit airbags.
“It is hoped that since the (agreement) is based on a law in place in Massachusetts, car companies will abide by the voluntary agreement for the other 49 states.” – The Automotive Aftermarket Industry Association, and the Coalition for Automotive Repair Equality, in dropping their years-long efforts to enact “Right to Repair” legislation after inking a voluntary agreement with the automakers.
"I don't mind sharing it with you: I plan to run for Insurance Commissioner next year to try to put a stop to this.” – Mississippi shop owner John Mosley, telling a local TV news reporter one of the avenues he is considering to address what he sees as unfair actions by insurers.
“He makes all of his money, just about, from insurance companies paying for repairs at his body shops. I would be careful if I were him about biting the hand that feeds him." – Mississippi Insurance Commission Mike Chaney, responding to Mosley’s plans.
“In a perfect world, where gender, race, color, age and sexual orientation are never a barrier in the workplace, there will be no need to give out awards like this that focus on the accomplishments of a subset of people, in this case, women. In spite of our many advances, it’s not a perfect world and we’re not there yet. Until that time, it’s incumbent on us to continue to shine a light on exceptional women in the industry through the ‘Most Influential Women’ awards.” – Industry consultant Marcy Tieger of Symphony Advisors, a 2010 “Most Influential Women” honoree, at this year’s Women’s Industry Network award presentation.
“I have several predictions. Most-favored-nation clauses will be banned from the property-casualty market under their current structure. A corporation not currently doing business in the United States will purchase one of the large MSOs here. Certified collision repair facilities participating in direct repair programs will be charging a higher labor rate than other shops in the program in the same markets; basically, the system as we know it today, with labor rates being defined by insurance carriers for a given market, will be a thing of the past. And State Farm will allow Select Service shops to choose a parts procurement tool that’s good for their business based upon (the shops’) needs.” – Dan Risley, executive director of the Automotive Service Association, when asked what will look different for the industry by mid-2017.
Every year, CRASH editors assemble a compilation of some of the most memorable, important, interesting or enlightening quotes heard in the industry during the past 12 months. Read more quotes from years past.