CIC panelists: Repair procedure issue might come to more legislaturesBy on
Business Practices | Insurance | Legal | Market Trends | Repair Operations
Collision Industry Conference panelists last month predicted more states would see legislation requiring OEM repair procedures be used to fix a vehicle after a collision and offered advice for educating and persuading officials about the topic.
Automotive Service Association lobbyist Bob Redding preceded the conversation by telling the Governmental Committee audience about three bills which brought the concept to statehouses in 2018.
Illinois House Bill 4926, which required written customer consent to use aftermarket parts and demanded that any part selected be installed using OEM repair procedures, failed to go anywhere, according to Redding.
Insurance Institute of Indiana and State Farm lobbyist Jon Zarich in February introduced an amendment to the Indiana Auto Body Association-backed Senate Bill 164 that would have protected repairers who fixed vehicles with OEM repair procedures — or with “generally accepted industry standards.” The amendment also would have eliminated assignment of benefits rights. The Indiana House actually approved the legislation despite the IABA yanking its support, but the Senate filed a dissent.
Rhode Island Senate Bill 2679 ultimately became law. It declares “When ‘OEM part(s) are used in the repair of a motor vehicle, no insurance company may require any repairer to use repair procedures that are not in compliance with the recommendations of the original equipment manufacturer.” The language at the end of a largely auto parts bill raised questions for the industry — including whether it bans aftermarket and recycled parts, as opponents feared.
The three leading industry trade groups, Assured Performance, the jury in the John Eagle case and I-CAR all have agreed that OEM repair procedures are the proper way to restore a vehicle.
Unfortunately, insurer interests pushed the idea that other methods are acceptable during the Indiana and Rhode Island discussion. Amica Vice President and General Counsel Robert Suglia Sr. expressed “concern” that Rhode Island SB 164 “limits” repair options “to only what’s in the manufacturer’s standards,” Suglia said. “There are other industry standards out there, such as I-CAR.” Jina Petrarca, who was representing Providence Auto Body in support of the bill, explained to the Senate Judiciary Committee later that I-CAR also says to follow OEM repair procedures.
‘It’s about safety’
Darrell Amberson, LaMettry’s Collision operations president and Automotive Service Association board member, said some in the industry have challenged the “legitimacy” of repair procedures. He said he frequently hears at the grassroots level that automakers are simply “just protecting themselves.”
But many shops feel the instructions are “mandatory” because of vehicle complexity and the threat of litigation, he said.
At one point, Amberson noted that many insurers are paying for diagnostics, and the criticism couldn’t just fall on that industry though there was “a lot there to talk about.” Shops failing to follow that OEM directive were creating issues as well.
“It’s about safety,” General Motors customer care and aftersales collision manager John Eck said when asked what was at stake for his segment on repair procedure legislation.
Eck said his company’s engineers create GM’s repair procedures. He described an evolution into more advanced instructions, stating that the directions for a radiator cowl support might have grown from a page in the past to 17 pages for the next-generation 2019 Chevrolet Silverado.
They’re “very prescriptive,” Eck said. However, “it’s friendly,” and while some instructions might be invasive for a reason, GM has when possible pursued techniques which would shorten labor times.
Eck asked if anyone else was writing and testing repair procedures for vehicles. No other alternative existed, he said. “There’s only one,” he said.
Alliance of Automobile Manufacturers lobbyist Wayne Weikel said such bills didn’t exist two years ago. He predicted variations would appear in other states, and Janet Chaney (CaveCreek Business Development) agreed, and Amberson called it a “safe bet.”
Weikel said such a bill might be more palatable to insurers if it impacts all of them equally.
A body shop or association who wants to take action on this issue needs to be “very, very strategic,” Chaney said. She recommended hiring a good lobbyist, and called the process a detailed one that “takes a lot of work” and thought.
Eck said he welcomes carrier discussions on the issue and doesn’t fear regulation. “There’s no other OEM repair procedures to follow,” he said, though he didn’t like to use legislation to regulate the industry.
Amberson said he had been involved with legislative efforts at the state and federal level, and he was “very surprised” by “how little they knew.” Lawmakers had no idea about the industry, according to Anderson.
“They need our input,” he said.
Chaney said she had dealt with insurance commissioners in several states, and those regulators need to be educated as well.
“They don’t know what they don’t know,” Chaney said. She said she was selective about what shops were chosen to attend those meetings.
Weikel said auto body shops shouldn’t be caught in the middle of “proper repair” and “proper payment.”
Roger Cada, CEO of Accountable Estimatics and a 30-year State Farm veteran, said “right versus wrong” was the question at hand. General Motors’ repair procedures are tested, and the notion of some other industry standard was concerning, according to Cada.
He called following OEM repair procedures a “line in the sand.”
Olson cited Gerber operations Vice President Rex Dunn, who called the only difference between two body shops what they charge for. You can’t make a business decision on how to fix a car, only what you’ll invoice, according to Olson. Following the repair procedures wasn’t negotiable.
Seventy-five percent of the 138 CIC audience members who voted in an informal poll said they felt legislating OEM repair procedures were necessary “to get compliance and avoid risk of litigation.”
Another 22 percent objected to government regulation and felt the industry could regulate itself.
A separate poll drawing 136 responses asking who benefits from OEM repair procedure legislation — the automaker, repairer, consumer or all or none of those — found 76 percent saying all three interests stood to gain.
‘Parts and repair procedures are separate’
Weikel said that in Rhode Island, the issue was complicated by the question of OEM position statements objecting to recycled or aftermarket parts.
Opponents of the bill argued that demanding adherence to OEM repair procedures would by definition prohibit those alternative parts. Whether this was an honest concern or just an attempt to muddy the waters was debatable, according to Weikel, but such a ban was “certainly” not the sponsors’ intent, he said.
Weikel said the Legislature tried to compromise by demanding OEM procedures be used on OEM parts, which he called a “strange caveat.” (After all, you wouldn’t want an aftermarket part installed differently than an OEM one. The whole point, according to CAPA, NSF and the IIHS, is for the copy to match the OEM part specs.)
“Parts and repair procedures are separate,” Eck agreed. Repair procedures were about “how you fix it,” he said.
General Motors is in the process of setting up a certified collision repair program, and while “we can debate” parts, the network will be “uncompromised” on process — i.e., the repair procedures.
Eck said GM would measure adherence to that process, and “we will manage it accordingly.”
A poll of 143 audience members found nearly a perfect split on the question of whether repair procedure legislation should treat recycled parts as an “acceptable alternative to OE.”
Seventy-two voters said yes, while 71 said no.
Aug. 8, 2018, Governmental Committee slides
Collision Industry Conference, Aug. 8, 2018
From left, Darrell Amberson, LaMettry’s Collision operations president, Automotive Service Association board member and committee chairman; Alliance of Automobile Manufacturers lobbyist Wayne Weikel; and Janet Chaney, CaveCreek Business Development owner participate in an Aug. 8, 2018, Collision Industry Conference Governmental Relations Committee panel. (John Huetter/Repairer Driven News)
General Motors customer care and aftersales collision manager John Eck participates in an Aug. 8, 2018, Collision Industry Conference Governmental Relations Committee panel. (John Huetter/Repairer Driven News)
Results of an informal audience poll at the Aug. 8, 2018, Collision Industry Conference Governmental Relations Committee session. (John Huetter/Repairer Driven News)
Darrell Amberson, LaMettry’s Collision operations president and Automotive Service Association board member, stands next to the results of an informal audience poll at the Aug. 8, 2018, Collision Industry Conference Governmental Relations Committee session. Amberson is chairman of the committee. (John Huetter/Repairer Driven News)