Press Releases
NOVEMBER 7, 2008
For Immediate Release
Economic Crisis and Loss of Competition Threatens Repairers’ Livelihood
Repairers Call for Renewed Support of “Repair Clause” Legislation
LAS VEGAS – As the International Autobody Congress and Exposition (NACE) winds down, repairers continue to express their concern that car company monopoly in the collision repair parts market could harm the future vitality of the industry, especially in light of the recent economic turmoil.
With many Americans scaling back their spending, car repairs are taking a back seat to life’s necessities. In fact, for the roughly 13 percent of repair shop customers who pay collision repair costs out-of-pocket, the spike in gas and food prices may simply make it impossible to pay for repairs. A recent Industry Trends Report published by Mitchell International shows that high fuel prices have caused people to drive 52.0 billion fewer miles than last year 1. This in turn has reduced the likelihood of accidents. Some repairers report that consumers continue to drive their vehicles even after fender-benders to save up to pay the deductible. These scenarios equate to less business for repairers around the country.
The impact of this economic downturn on repairers and their customers will worsen if car companies are allowed to carry out a monopoly on replacement parts. In recent years, the number of design patents granted to car companies has increased, growing to about 20 to 25 percent of the total U.S. patents awarded to those manufacturers. More importantly, “crash parts” — or collision parts — account for anywhere from 50 to 98 percent of the U.S. design patents awarded to major automobile manufacturers. After losing their attempt at a monopoly in Congress in the 1990s, the car companies shifted their strategy to the forum of the International Trade Commission (ITC), where they look to eliminate competition by solidifying 14-year design patents.
In May 2008, Ford Global Technologies filed a Section 337 complaint at the ITC against manufacturers and U.S. distributors of automotive collision repair parts on the 2005 Ford Mustang. This complaint comes on the heels of another ruling which made it impossible for the nearly 2 million Ford F-150 drivers on America’s roads to find quality, replacement parts for their 2004, 2005, 2006 and 2007 F-150s. Alternative parts are anywhere from 26 to 50 percent less expensive than car company parts.
Don Feeley, owner of City Body & Frame, a repair shop in Riverside, California, believes that the current economic climate makes alternative repair options even more important now than ever. Like many repairers, he will tell you that this is one of the worst economic environments the industry has seen in years.
“Consumers are doing all they can to maximize their dollars, and one way they have found is driving less,” said Feeley. He continued, “Fewer cars on the road translates into fewer collisions. But when customers do find themselves needing repairs after a fender bender, they are even more concerned about the rising costs of repair, and many are asking their body shop professionals about alternative repair options.”
Unless Congress acts swiftly to block the looming car company monopoly on crash parts, independent repair shops, already working hard to compensate for the decrease in customer visits, may all but disappear. The Quality Parts Coalition and its diverse supporters urge the nation’s lawmakers to endorse “repair clause” legislation championed by Rep. Zoe Lofgren (D-Calif.) in the 110th Congress, to secure the future of the American independent repair industry.
“We haven’t seen a marked slow down in our shops because consumers know they need to keep their vehicles in working order,” said Stacy Bartnik, Assistant Vice President and Director of Field Services for CARSTAR. “But, customers depend on independent repairers to carry affordable alternative parts for necessary repairs. If we are unable to supply our customers with what they need at a price they can afford, a car company monopoly may well have a huge negative impact on our business.”
For additional information, please visit www.qualitypartscoalition.com.
1. Mitchell Industry Trends Report, Volume Eight, Number Four, Q4 2008
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The Quality Parts Coalition represents the interests of the independent parts industry, repairers, insurers, consumers and seniors. It is the goal of the Quality Parts Coalition to develop and secure a permanent legislative change to U.S. design patent law to preserve competition and to protect the consumer's right to benefit from quality, lower-cost alternative replacement parts.