Several prominent organizations in the collision industry last November signed a joint statement declaring that original equipment manufacturer (OEM) repair procedures should become the industry standard.
It was the first such official declaration, although many throughout the industry already consider OEM procedures to be the standard. The signing organizations included the Society of Collision Repair Specialists (SCRS), the Alliance of Automotive Service Providers (AASP), the Automotive Service Association (ASA), and the Assured Performance Network (APN).
Since the declaration in early November, at the Collision Industry Conference (CIC) meeting at SEMA in Las Vegas, the Automotive Recyclers Association (ARA) release_notesd its own position statements. It released one in December, and another in January, warning the industry against using only OEM procedures in repairs.
FenderBender recently talked with Michael Wilson, chief executive officer of ARA, about the repair standards debate and its role in the conversation.
Could you summarize the recent debate on OEM repair standards and talk about the ARA’s role in the conversation?
We are in support of quality and safe repairs, which we mentioned at the CIC meeting in Palm Springs. As far as collision repair standards, we have concerns about auto makers having carte-blanche power over deciding what those repair standards are. We articulated those in recent press releases, and had an educational flyer we had our members send off to their collision repair shop clients. We think there’s additional input needed in creating these standards. We also believe the auto manufacturers have a significant financial interest in the repair option. Looking at the position papers they’ve put out over the last 18-24 months, they pretty much say shops can only use new parts for repair. We don’t believe that quite lives up to what the collision repair industry needs. The industry for all these years has used multiple parts options.
Not all used parts are reliable and usable. Can you address the quality issue that shops are facing?
We started back in 1994 with our certified auto recyclers program, which looked more at environmental and safety standards, and a couple years after that we created our Gold Seal Certified Automotive Recyclers Program, which ensures quality parts and reputable businesses practices. And 15–18 years later, we’re still working through that process. I think the collision repair industry is going through the same process. It’s not going to be done right coming out of the gate, it’s going to be a work in progress.
We make sure that all of the collision repair facilities know the parts that they’re getting, and that both the body shop and recycler are in agreement of what that is. Knowing how important cycle time is, if that doesn’t come across the way the collision repair facility expected it to, that’s going to create problems. Are we perfect? I don’t believe so; I think we’ve got a long way to go. But they have stepped up to the plate.
Talk a little bit about your work with the collision industry regarding this issue.
We definitely have more communication about the collision industry repair standards. I’ve been participating in CIC and the Society of Collision Repair Specialists over a number of years, and also with the Automotive Service Association. There’s definitely not a unanimous feeling in discussions on collision repair standards.
There are 39,000 collision repair facilities, and you’ve got small independent shops. Shops that have nine employees or less make up 89 percent of the collision repair industry. There are some concerns about what repair standards would mean to those facilities. You have OE repair standards and how that would affect independent shops versus how it would impact MSOs.
What are the biggest concerns you’re hearing from collision repair shops?
The discussions that I’ve had as I look forward to discussions with the collision repair industry, I’ve gotten concerns from the auto recyclers and what they have conveyed to me. There’s no standard accident, each one is different, and there’s different procedures you could use in the process.
We’re concerned about the total loss frequency, which has increased. When you look at vehicles seven years and older, that makes up about 68 percent of total losses. The average vehicle on the road today is just going over 11 years old. I would think with the [older] average vehicle on the road, total losses would be climbing upwards of 90 percent.
By only going to an original equipment repair procedures, you’re going to total out a lot more vehicles. Consumers are going to go to the auctions and bypass the insurance and collision repair pipelines, and be addressed by folks that don’t have the training. Those vehicles will make their ways onto U.S. highways and roads. There are significant concerns there that the total loss is a big barometer of how vehicles are going to be fixed in this country.
If you can bring down the cost of fixing a car, that’s going to definitely lessen the number of total losses that are out there. We’ve got to make sure that those parts fit the repair process, and that parts problems don’t add to cycle time and other issues.
What do you hope the collision industry takes into consideration as groups move ahead with these discussions?
I think it’s important to have ongoing communication that is cordial and respectful. We all know that this is the marketplace, and financial considerations play a significant role in this debate As we put out in our statement earlier in the month, there is a value to all the parts that are in the repair process, otherwise they wouldn’t be there. You can debate how much value each of those options has. But they are there in the marketplace for a reason.
One thing I continually look at is, we can have discussions as industry trade groups, but we have to look at the consumer. The consumer has had a rough go of it the last three to four years as far as the recession goes, and it continues for many Americans. They’re looking to keep their vehicles on the road, and they have elected not to go out and buy new cars. The used car market is very, very tight. The costs have only gone up because of the limited supply chain. When you look at a single mom or a low-income family that doesn’t have the resources to buy brand-new parts, or if they don’t have insurance to cover a repair, there’s got to be affordable options. This bantering about new versus recycled parts, these people have more meat-and-potatoes issues on their mind, such as how to get to work.
When we get into these market issues, we want to see scientific results or research that backs up certain statements. The original equipment manufacturers on some of their positions need to provide scientific data on inferences that salvaged or recycled parts are problematic.
If you look at it, this past year the number of vehicle recalls in the U.S. was more than 15 million, the year before was 20 million. If we were saying that you couldn’t use a vehicle because of a problem, here we have 15 million recalls that say, it’s hard to be perfect. That doesn’t stop the assembly lines in Detroit, Alabama, South Carolina, Kentucky and Tennessee when there’s a problem. Let’s put the procedures in place to address when there is a problem, but let’s not try to create a problem where there isn’t one. As we move forward in this process, we’re working to make our product reliable for the collision repair industry so they know what they’re getting. That helps the consumer in the end.
What are you predicting for this issue as the debate continues in the coming months?
A lot more discussion, I would think. As the CIC meeting in Palm Springs would indicate, I don’t think there’s any consensus within the collision repair industry on this issue. Now, that’s me over on this side of the fence, I don’t have the same insight as the leaders in the industry have. I go to the CIC meetings quarterly, and the National Auto Body Council, and we’re ramping up more discussions with the Automotive Services Association and their committees.
I just think more communication as we have for years to try to perfect our products for collision repair folks. That’s the best way to address these issues, to do it in the marketplace, and not out there in the legislative and regulatory arena. Unfortunately, sometimes that’s where some of these discussions go.
What else is the ARA doing besides working on this issue?
We’ve been around since 1943. As our folks that established the ARA when the federal government mandated that all vehicles be scrapped, the leaders then said, “Wait a minute; they’ve got to have parts to fix these vehicles.” If you scrap all the vehicles, you won’t have parts to fix them. They were successful then, and I think we have been successful today in articulating to folks that recycled parts have a very important role in the collision repair process. It gives an option to consumers. We think that given the education on what a recycled part is and isn’t, more consumers would look to recycled parts as a possibility for repairs.
We’re very enthusiastic, and continue to work in our certified auto recyclers program, and work on environmental and safety needs within our facilities within the U.S. and around the world. We’re also working to enhance the Gold Seal program.
We made a lot of strides in our communication with the American general public during the Cash for Clunkers program, showing that the parts could be harvested and available to consumers. We were able to inform the public about what recycled parts are. We just need to build upon that on an ongoing basis, and that’s what we’re here to do.