Auto Service World
Feature   July 1, 2000   by Auto Service World

BODYSHOP NEWS: Ontario Bodyshop Associations Call for Paint Charge Increase

A group of Ontario autobody associations is calling for an increase in the compensation their members receive for paint.

Calling for a $24 per refinish hour rate, the Hamilton District Autobody Repair Association (HARA), the Peel Vehicle Repair Association (PVRA) and the Toronto Collision Repair Society (TCRS) cite increased costs for refinish paint and tighter environmental controls on their use and disposal.

According to the groups, the use of low emission paint products, in concert with higher efficiency spray guns, has dramatically reduced paint sales volumes from 32 million liters in 1985, to 18 million liters by 1992. According to information from the association, some estimates say volumes could drop to nine million liters this year.

“Coupled with consolidation of a number of paint manufacturers, increasing raw material costs, upward pressures on U.S. exchange rates, and (with) a diminishing marketplace, paint prices are going up significantly,” says a release.

Mitchell International, the release continues, has announced that from 1989 to 1996, the cost of paint materials has increased by 62% while payments for those materials increased by only 13%.

“Other provinces in Canada have recognized the problem, with Manitoba’s paint reimbursement/charge-out rate being raised to $24.02 per hour, Saskatchewan’s at $24.45, and British Columbia raised their charge-out rate for this year to $24.73 per hour.”

The organizations made the announcement after failing to get a Canadian materials estimating guide designed and printed. According to John Norris, executive director of HARA, “A (third-party produced) materials and paint pricing guide for this country, similar to those guides well used and respected in New York, California and elsewhere, would be one of the answers to properly invoicing customers and insurers.

“Despite requests to the data providers in Canada,” he says, “we have no certainty that the guide will be forthcoming, and the increasing costs that coatings firms are passing on to the shops is creating an unfair situation for shops and their customers.”

With all this in mind, the three associations recommended that paint charge-out rates by their member shops be raised to $24 per refinish hour on June 1st, “to allow information providers’ data systems and insurance company claims departments time to work with the new prices.

“Our fear is that shops, faced with losing money because some insurers would pay them less than the costs of their paint, will attempt to recover those losses improperly elsewhere in the invoicing–called cost shifting–or not properly handle their environmental responsibility for the application and disposal of paints, in order to cut their losses,” Norris explained. “We hope that these new prices will continue to encourage shops to operate legally and be environmentally friendly.”

Ford Motor Company Acquires Second Ontario Auto Recycler

Ford of Canada has acquired Ontario automotive recycler Cumberland Auto Parts, located just east of Ottawa, Ont.

Acquired through its Green-Leaf subsidiary, Cumberland Auto Parts is a 40-hectare (100-acre) operation offering an online inventory and ordering system, a website for customer inquiries and an extensive database to locate parts for consumers within minutes. The facility processes approximately 2,000 vehicles a year providing parts to repair and bodyshops, insurance companies and individual consumers.

Cumberland Auto Parts will continue to be managed by Denis Desjardins and employs 28 people. Last December, Ford acquired Plazek Auto Recycler Limited, located near Hamilton, Ont. Ford has also made similar acquisitions in the U.S.

“The recycling of automotive parts and materials is a high-growth opportunity in the industry, and Ford is actively pursuing acquisitions through the GreenLeaf organization as part of the company’s new business development strategy,” said Bobbie Gaunt, president and CEO, Ford Motor Company of Canada, Limited.

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