By Jeff Sanford
Toronto, Ontario — August 17, 2017 — In this week’s edition of Friday Fun, Edmonton police release details on the chop shop raid at Car Masters Collision, a major staged collision ring gets busted, Ontario and Newfoundland review insurance, rumours fly about a Chinese acquisition of Chrysler, and much, much more!
– A big chop shop got busted near Edmonton earlier this summer, with officers at the time saying it was the largest operation of its kind they had ever seen. CBC Edmonton has published a follow-up report, outlining the dollar value of the recovered vehicles.
According to the report, police recovered more than $7 million in stolen vehicles and parts. The CBC reports that officers involved in the raid searched Car Masters Collision in northeast Edmonton after pulling over a truck with invalid plates that was pulling a stolen trailer.
When the police raided the shop, they found a stolen 2013 Dodge Ram truck in the process of being dismantled. Since that raid, police have recovered parts from 159 different vehicles, “… 141 of which were reported stolen,” according to the report.
“We believe this was a highly organized chop shop,” said police in a press release. “Many of the recovered items were reported to various policing agencies.”
Police also announced additional charges this week. “Two people were charged with several offences, including possession of stolen property for the purposes of trafficking and alteration of vehicle identification numbers (VIN). A third person has since been charged in the investigation,” said police said in a news release Wednesday. According to the CBC report, “A 53-year-old man, a 35-year-old woman and a 33-year-old woman are all facing a variety of charges, including possession of stolen property over $5,000, fraud over $5,000 and participation in criminal organization.”
Police also released a tally of the various brands that had been stolen. The list is as follows:
• Dodge – 79
• Ford – 28
• GMC/Chevrolet – 13
• Other vehicles – 19
• One trailer
• One Bobcat
The most expensive vehicle recovered was a 2012 Dodge 3500, with an estimated value of $109,000, according to the story.
– Police in Sacramento, California, have busted one of the largest auto insurance fraud cases they had ever come across. The ringleader was recently sentenced to 10 years in state prison, but there could be up to 65 more people involved, according to a report by the Sacramento Bee. What’s known so far is that a 30-year-old is charged with, “… filing an estimated $500,000 in claims with insurance companies over two years that resulted in payouts of close to $200,000 …” The accused operated a tow truck and bought damaged cars through Craigslist. He then recruited friends and family to stage accidents and provided the information needed to file claims.
According to the story, the accused went so far as to provide his accomplices with scripts that, “… included specifics about the vehicle, the vehicle identification number and details of the purported accidents to use when calling the insurance company to file a claim … More than 100 vehicles were involved in the scheme.” According to the report, insurance companies have made it so “… easy for consumers to purchase insurance and file claims online [that it now] easier for people to commit insurance fraud …”
Detectives broke the case after watching one of the vehicles over the weekend. According to the report, “It had remained parked throughout the weekend, but on Monday, [the accused] took it to an insurance office and filed a claim, saying it had been damaged in a collision that weekend. The vehicle was in such poor operating condition, that [he] towed it to within about a block of the insurance office. After filing the claim and receiving a check for $7,000, he hooked the vehicle back up to the tow truck.” Another case involved a woman who, “… deliberately backed her car into the front of another vehicle, then claimed she was rear-ended. The woman’s scheme was foiled when the black box on the victim’s vehicle revealed that it wasn’t moving when the crash occurred.”
– The Ontario government distributed a press release noting that the province is seeking feedback from residents about how to make auto insurance more affordable while improving the care people injured in accidents receive. A recent report from David Marshall, Ontario’s adviser on auto insurance, recommends, “… transformative steps to improve health outcomes for those hurt in collisions, reduce insurance costs, and strengthen consumer protection.” As part of this review process the “… province is consulting now with industry participants and members of the public will be invited to provide their comments on the report and its recommendations online until September 5, 2017.”
– Drivers in Newfoundland and Labrador are also getting a review of auto insurance fees. This past week the provincial government released the terms of reference for a long awaited review of the auto insurance system according to a report by the CBC. Interestingly, the review, “… will be carried out by the Public Utilities Board,” not Service NL, which is the regulator of insurance services in the province. According to the report, “Motorists have long complained about insurance rates. And things only got worse last year when the new Liberal government, faced with a fiscal tsunami, slapped a 15 percent sales tax on premiums. Information released Wednesday shows that drivers in this province pay an average of $1,100 annually in auto insurance premiums, compared to less than $800 paid by drivers in other Atlantic provinces. The government is asking the public utilities board to find out, and attempt to bring rates more in line with our Atlantic neighbours.”
The writer of the story went on to muse about the reasons for the higher prices, wondering if it was, among other things, the absence of a cap on soft tissue injury claims, or maybe, “…our higher rates of drunk driving?” Collision Repair magazine would like to reiterate that Terry Roberts of the CBC said this, not us.
– An editorial appeared in the Toronto Star this week suggesting that people who text at the wheel and engage in distracted driving are like addicts who have trouble managing their behaviour.
“For people who condemn drug addicts, dismissing them as morally corrupt and weak, before immediately returning to the comfort of their cellphones, here is a thought to consider: Aren’t we, who collectively hold drug addiction in such contempt, the same ones who can’t go an hour without text messages and email? How many of us are guilty of this?” asks the editorial writer. The piece goes on to say that, “Texting is the fulfillment of a tribal desire to communicate and to stay socially connected. Make no mistake. The stimulus-response-reward pattern remains powerful and totally irresistible … Few people who text regularly will ever admit to being addicts in this way. ‘Besides,’ they will say, ‘texting and email are harmless. They don’t kill anyone like narcotics do.’ Sorry, but yes. Yes, they do.”
– The renegotiation of the NAFTA treaty got underway this week. A report by Reuters warns that, “The Trump administration has set a collision course with the auto industry … More than any other industry, autos have been the focus of US President Donald Trump’s anger over the North American Free Trade Agreement, which he blames for taking car factories and jobs away from America to low-wage Mexico …”
“The Trump administration has framed their NAFTA negotiating objectives around reducing the trade deficit with Mexico,” says Caroline Freund of Peterson Institute for International Economics, according to the report. “If they don’t touch autos, there’s no way of getting at what they want.”
– Rumours are suddenly flying that Fiat Chrysler Automobiles (FCA) could be a sold to a Chinese auto company, according to a report in the Detroit Free Press. Both German automaker Volkswagen and French automaker PSA Groupe have, over the past two years, been viewed as potential partners or buyers of FCA. But Volkswagen’s management and finances have been in turmoil for more than two years because of a scandal tied to its diesel engine emissions and PSA Groupe agreed to acquire GM’s European division in March for $2.2 billion. That leaves Fiat Chrysler with few other options. Such a deal would likely face fierce political opposition. President Trump has frequently criticized China for its trade practices. This past Monday, the Trump administration asked its trade office to consider investigating China for the suspected theft of American technology and intellectual property. It’s hard to imagine an acquisition by a Chinese auto company would create antitrust concerns for the U.S. Department of Justice, which considers whether an acquisition is a threat to competition.
– Larry Lantz, President of the Trillium Automobile Dealers Association wrote a column that appeared in the Toronto Star this week, encouraging young people to take up careers in the auto sector. His plea—designed to address the lack of skilled workers—is a familiar issue to many in the collision repair business. As the column noted, “Recently, there have been rumours about the eventual demise of auto dealerships, as new technologies and transportation systems impact our industry. Truth is, auto dealerships are not going anywhere.”
Lantz goes on to say that, “Admittedly, the retail auto industry is facing challenges that many other industries are facing: consolidation, hiring and retaining staff, competition, and advanced technology. But, dealerships also have an excellent track record of adapting to changing technologies and consumer demands … Whether it’s located in Toronto or Thunder Bay, dealerships offer a selection of new and pre-owned vehicles, lease and finance options, genuine parts and accessories, service, and collision repairs — all at a single point of contact. In addition to these products and services, there is a level of expertise found at dealerships that does not exist anywhere else.”
The author goes on to note that, “As vehicles become more complex, they require specialized tools, training and knowledge (provided by the manufacturer) to properly diagnose and fix. Automotive technicians are continuously upgrading their skills and product knowledge and utilizing the latest tools of their trade. Anyone considering a career in the retail auto industry might hear the rumours of the demise of dealerships and be tempted to shy away from it. That would be a big mistake. As the auto industry evolves, so does the need for a skilled workforce in all areas of a dealership’s operations: sales, service, collision repairs, parts, accounting, marketing, I.T., human resources, and management.”
Summing up his argument the author says, “Yes, the automotive industry is in the midst of massive changes, but dealerships will adapt as they always have. They will do so by continuing to deliver great customer experiences to ensure their future viability.”
– A story on CNBC notes that, “The global push among carmakers to make ever lighter vehicles is leading some auto suppliers in Japan to turn to what seems like an unlikely substitute for steel: wood.”
Apparently, Japanese researchers and auto parts makers are researching a material made from wood pulp that, “… weighs just one fifth of steel and can be five times stronger.” According to the report, the material, cellulose nanofibres, could become a viable alternative to steel in the decades ahead. The material is still much more expensive than high tensile steel and aluminum alloys, which currently cost around $2 per kg. But as research goes ahead the cost is expected to drop. The story also notes that, “Industry experts anticipate that carbon fibre prices will fall to around $10 per kg by 2025.”