At the CCIF meeting in Toronto in January of this year Mike Anderson moderated a panel of OEM and insurance reps to discuss electronic scanning. During the course of the discussion Mike made a point with a quote he attributed to another insurance rep in another conversation. “No doesn’t mean no. It means I need more information.”

But the manufacturers are putting out lots of information, so why is it being met with ‘No’; what more information could be needed?

Two examples of long standing OEM information are useful here.

Many manufacturers state that ALL repairs have to be done with new OEM parts and the industry does not takes that position seriously. An honest repairer and insurer will recognize that many electronic parts are best replaced with new, used bearings are not a good idea and most welded panels are also best replaced with new OEM parts. Neither the repairer or insurer, or especially the self-paying owner will have any trouble with using a clean part such as a hood or front headlight from a 2014 car to complete the repair of the same 2014 model.  Aftermarket parts are a different story, but when the manufacturer states that no used OEM parts cannot be used no one pays much attention.

Wheels are another example of an information problem. All or most manufacturers state that alloy wheels cannot be repaired or repainted and have to be replaced with new. The manufacturers have had this position for years and the repair industry has been repairing and repainting wheels for 30 or 40 years with no issues. An alloy wheel ‘repaired’ on the floor with a bit of heat from a torch and a few hits with a hammer is not a safe repair. An aluminum wheel can be repaired safely by a qualified technician using accurate gauges and a known amount of slowly applied hydraulic pressure at a specific heat. $200 for that safe repair compares well to $675 for a new wheel.

Now the manufacturers are putting out clear position statements on how electronics have to be managed during repairs on their vehicles. They may be correct in these statements, but those paying have to be thinking ‘is this real or is this another new parts all the time or wheel repair thing?’

A negotiating tactic that was used by labour unions quite often in the 70s and 80s was ‘work to rule.’ This meant that everything was done by the rules and was usually the last step before a strike was called.  Following rules to the letter caused a significant reduction in productivity.

This not mean that the rules were silly and getting in the way of production, What it did mean is that a knowledgeable work force could safely work to the spirit of the rules and still meet good production levels. That work force, in cooperation with good management, would know when to apply the rules strictly and when they could be relaxed. New employees or a new situation would require a much stricter adherence to rules, but as the process became better understood efficiencies could be found that increased productivity without decreasing safety or quality.

Vehicle electronics are very new and very rapidly changing and we do not have the knowledgeable work force that can interpret the rules to combine efficiency with the needed safety. In this case it would be best to follow the rules but there is a tremendous resistance to the costs involved. Repairers’ costs include equipment, training and productivity as new techniques are learned and implemented. Insurers’ costs are very easy to see dollars. No one wants to lose competitive position by being the first to take on these costs.  However, the current situation of the OEMs sticking to their firm rules and the rest of the industry applying ad hoc interpretations is neither safe nor sustainable.

The current challenge is cultural as well as highly technical. The culture of the manufacturers is to stay firm to their requirements, the culture on the repair and paying side is to use alternatives to absolute adherence every time. There is work to be done to get to an understanding that allows the very high volume of high-tech vehicles to be properly repaired. That will take honest discussion and also movement on the part of all participants.

Once again; we will get there but we are not there yet. The five years I first brought up in July 2016 is now down to 4 ½ and we will probably need all of that.

 

In September 2016 at the Canadian Collision Industry Forum (CCIF) meeting in Vancouver a panel presentation discussed the topic of electronic diagnostics of accident damaged vehicles. At that time the short form description of this procedure was ‘scanning’ a longer form was ‘scanning and fault clearing’. Both of these terms refer to accessing the vehicles computers to search for fault codes that would indicate either damaged electronic components or an occurrence that had triggered a fault code.  If the code is cleared by the technician performing the scan and does not reoccur this suggests that the event which caused the code had been corrected. If the code re-appears after clearing this suggests that the problem still exists and further work is needed to correct it. If I continue with explanations or examples all of you will stop reading within the next few words. The topic is complex and can very quickly run to many pages of technical detail for even a good overview.

By January 2017, when this topic was again discussed by a panel at the CCIF meeting in Toronto understanding had expanded to include calibration.  Calibration refers to the adjustment of cameras and sensors to a position or setting that allows them to function as designed. With cameras and blind spot sensors this will mean a specific aim, with airbag sensors in seats this will mean a weight calibration that will then allow the seat to pick up whether there is a child, an adult or no one in the passenger seat. Once again I could go on and you would stop reading.

During 2016 the discussion of these topics was relatively new and centered on who would pay for the needed procedures, which were not part of the common procedures that the industry was used to working with.

What came out in Toronto, to people who were listening carefully, was that who would pay may be the least of our worries.

Industry capacity to identify and perform the volume of complex scans and calibrations needed is perhaps a bigger problem.  Capacity refers to both available time and physical space, and also to knowledge and skill.  The time and space may be found, but the development of needed skills will take time.

Going back to the ‘who will pay question’; what needs to be done and how it will be paid for?  Answers to these questions are needed before there is clarity to the vision of the required skills and from that clarity an understanding of the needed skills development.

Many progressive operators are paying attention and doing as much background prep and development as possible. For these people this is a cost and an investment that will likely have a return in the future.  Many more operators are waiting to be told what to do and for them the shift to correct repair procedures will be a challenge.

The transition period to the needed new model for the collision repair industry may have moved back out to the 5 years we started with.

IIHS is the acronym for the Insurance Institute for Highway Safety.  This is an American organization founded in 1959 by insurance companies interested in understanding all aspects of highway safety. With their business built on insuring cars and drivers it makes sense that they have a greater understanding of accidents, damage and injury.

This link gives a good background on the IIHS and how it has evolved

One of the most publicly visible areas of IIHS work is their crash safety rating system, which is developed based on crash tests in their own testing facility. This rating has real world implications, with a 5 Star IIHS rating used by manufacturers as a selling feature and by insurers as a guide to setting insurance rates.

Manufacturers pay a lot of attention and will make design changes to address the issues that prevented them from getting top scores. You will be safer in a 2016 vehicle than you would be in a 2010 or 2005 vehicle in the same type of hit.  You will probably be safer still in the 2017 because none of the manufacturers move backwards on safety.

The car may be somewhat more expensive to repair, but you will not care much about that if you walk away from the accident with no injury. Your insurance company should be ready to pay an extra $2,000 or $3,000 or even $10,000 to repair your car if tens or even hundreds of thousands in injury costs are saved.

5 Stars to 3

The insurance company should be ready to pay; but then we run into the real world of measurement and reward in a compartmentalized business. The insurance adjuster, and the entire claims department, is judged by the amount of money paid out; lower claim costs are viewed as a good thing and the in-depth quality of repairs is not yet measured.

John  Huetter of Repairer Driven  News goes into this discussion in more depth  http://www.repairerdrivennews.com/2016/11/11/iihs-top-safety-pick-criteria-and-what-it-really-means-for-collision-repair/ and importantly attributes the blame for  the current inadequate repair model equally to both  repairers and insurers.

In the unregulated world that we work in the insurance companies are probably the best positioned to insist on a proper repair but the huge emphasis on cost is preventing them from doing this.

The first company to honestly address the issue of rating and insuring 5 Star cars and then accepting and paying for repairs that leave the car at a 3 Star level has yet to step forward. It is a big problem, but there are lots of very smart people on staff at insurance companies. They will figure it out but it will take time.  There’s that 5 year timeline again

In November I posted a discussion about the money in the collision repair industry; just as in every other industry money is what makes it all go around. There is certainly nothing wrong with this, it is a very big part of what our society is based on. But as we all know, if there are no checks on the behavior motivated by money the system gets very out of balance. This is where government regulation steps in to control behavior.

Very Little Regulation to Date

The collision repair industry has to date largely avoided attracting the attention of regulators. The main reason why this lack of regulation exists is the public has not needed the protection. On the cost side, a very fragmented industry meant that competition kept the prices down and on the safety side cars evolved in a manageable way for 50 years. This manageable evolution meant that learned skills and work habits could be used for many years with minor tweaks and updated versions of familiar equipment.  Every now and then something quite new came along, but it was all manageable without a need for a real change in operating methods. Problems were created, but as I have mentioned before (Nov 23, 2016 Standards and Regulation for Vehicle Repair) these were more anecdotal than systemic.

Why We May Not Have Needed Regulation in the Past

Poor repairs did compromise the car, but two significant factors kept these compromised cars from being very real problems. Considering post repair safety, or Next Accident Readiness, a car made primarily from mild steel did not change too much in strength and safety after that metal was repaired with heat or pulling. Looked at more darkly, that car wasn’t very safe as designed so the bar was not high.

On the causing accidents side; the control system of the car was 98% the driver and the driver was not affected by the repair.

Why We May Need It Soon

Today’s cars are much safer but their sophisticated design and structural materials demand very specific and accurate repair or replacement methods, otherwise their strength and safety are very much affected.

We are well on our way to the control system being 100% built into the car with the ‘driver’ just along for the ride. Repairs with these cars will have a direct effect on the control system and have to be absolutely accurate, every time. Remember that we will not get from 2% to 100% on a specific date in the future, we will get there on a curve and we are further along this curve now than the industry recognizes.

The changes of the last 5 years and those coming at us rapidly are significant more for their wide application than for their technology. Many of the features which are seen as ‘new’ were being used by manufacturers such as Mercedes Benz in the mid to late 2000s. But with only a few manufacturers using this advanced technology on a very small percentage of the overall vehicle fleet, it was possible for these manufacturers to control the repair process and ensure that the technicians working on the cars were properly trained.

The people who bought these cars were higher income more often than not and had an expectation that if they had purchased an expensive asset that they would get top level service in the repair and maintenance of that asset. If the MB sanctioned repair facility told them that these parts and these procedures were needed then that was what they wanted and they let the insurance companies know that. The insurance companies knew that they could not easily fight a determined owner armed with the logic of a proper repair (and also a lawyer) and with so few of these cars on the road the additional costs of these repairs could be made to fit into their business model.

We are now in 2017 and we have a problem. Every manufacturer is using very sophisticated technology and materials in even their least expensive cars and with so many of these cars on the road they are not yet able to control the repair process in the same way that MB could. They are working hard to find a way, but with the very large number of vehicles involved the problems are far more complex than they were for MB 10 or 15 years ago.

MB had to train maybe several hundred or at most a few thousand technicians and facility managers to work in their rigorous system. The industry was large enough that this relatively small number of motivated people could be found despite the stubborn industry culture of resistance to learning and training. Without doing any background research, it is easy to imagine that if only Honda, Toyota, Ford and GM wanted to get to this level (and they do along with all of the other manufacturers) they would have a very difficult (impossible) task to find and train the people needed. The current insurance company model is also not designed for MB level repairs on every car on the road.

or Why We May Not

The repair side industry could reorganize itself to be able to properly repair the cars of today, with truly qualified technicians working with appropriate equipment and to standards that are accepted and expected across the industry. The insurance side of the industry could also restructure to accept and expect only correct repairs. It is possible that the manufacturers will have enough control over the repair of their vehicles that they will be strong influencers of these needed changes. If these things can be seen to be starting to happen then only a very light regulatory framework may be needed.

If the coming year or two do not show signs of real change then regulators may need to be much more involved in the needed transition.

My guess is that the current regulation in the aircraft industry will become the model for the advanced collision repair industry of the near future.

I posted an article last week about Ford Certification and collision facility certification overall. That post led to further investigation and in keeping with the rapidly changing environment a rethinking of my position on certification.

The Canadian business and regulatory environment is very different from that in America, but there is a significant similarity in that both countries   regulate vehicle design and safety at the federal level with only licensing and minor functionality regulation at the state and provincial level. In both countries, the repair requirements of these federally regulated vehicles should therefore be the same across the country.

An ongoing theme in previous posts has been the complexity of today’s vehicles. Another theme, almost as strong, has been the challenges to good repair practice presented by the many profit seekers in the repair process.

This profit seeking behavior also has an effect on certification; either overtly, such as a for profit certification program, or more subtly, such as an equipment or service provider influencing decisions at a regional level.

While all participants in the repair industry are working toward making a fair profit, there are places where it is better for all if profit takes a back seat, with regulation and accreditation being an excellent example.

In Canada, the national nonprofit accreditation program CCIAP is perhaps the best chance for a program designed for overall industry health rather than specific profit. As a national program, it has a balanced national board that can consider and evaluate views and positions from across the country, keeping in mind that cars in Newfoundland are the same as the cars sold in BC and repairs have to be done the same way in all regions.

I will present one view here myself. Accreditation should focus on the correct and safe repair of vehicles preformed in a safe environment for the workers in the industry. This would include equipment, training, environmental concerns and individual employee licensing.

Issues of customer satisfaction and business style should be left to the marketplace. Customer satisfaction is not a valid measure of safety, as unsafe repairs are often completely invisible to the vehicle owner. The objective of accreditation is not to standardize the overall experience to the customer, but to provide a safe repair. With demonstrated ability to provide that safe repair as a base the business owner is free to participate in the market with whatever style they chose.

 

The repair industry is still unregulated, but complexity of vehicle design will require this lack of regulation to end. When it does end, regulation will come at a federal level, as does design regulation now. If these future regulators (who are not that many years in the future) see an accreditation program with national reach and acceptance, it is easy to imagine that the first steps before reinventing the wheel will be to engage the managers of that program in discussion about moving to mandatory accreditation and licensing.

There are many programs of industry self-regulation supported by enabling legislation and a unified voluntary start will ensure that the collision repair industry will stay strong and independent.