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New MPI Industry Agreement

New MPI Industry Agreement. Moderators: Craig Dunn and Murray Haukaas, MPI Negotiating Committee Introduction: Mike Dobush, MMDA President. 2019 LVAA Negotiations - ATA/MMDA and Manitoba Public Insurance. Deal Term Sheet:

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New MPI Industry Agreement

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  1. New MPI Industry Agreement Moderators: Craig Dunn and Murray Haukaas, MPI Negotiating Committee Introduction: Mike Dobush, MMDA President

  2. 2019 LVAA Negotiations - ATA/MMDA and Manitoba Public Insurance Deal Term Sheet: The intention of this document is to provide a high level summary of the deal terms for an agreement between the ATA/MMDA and Manitoba Public Insurance (MPI). These deal terms are non-binding and are subject to approval by the Boards of Directors of MPI and of the ATA and MMDA, and are further subject to the finalization and execution of a binding agreement among the parties with respect to the subject matter hereof.

  3. High-Level Terms: 1. Two Year Term Two year term for compensation. Agreement start date of April 15, 2019 to allow for training and notices. 90 days prior to the end of the compensation term or at any time thereafter, either party may give notice that it wishes to terminate the entire agreement. After the two year compensation term, compensation continues status quo until such time as a new agreement is entered into, unless either party exercises the 90 day notice provision. Under LVAA, either party may terminate agreement for convenience with 90 days’ prior notice to the other party. 2. Committees The Executive Committee and the Technical Committee will both be maintained; the Cost Containment Committee will be terminated. The two committees are maintained to ensure collaboration between MPI and the collision repair industry.

  4. 3. Termination of the DR Premium The $81 premium payable to DR shops will no longer be in effect after April 15, 2019. 4. Removal of Labour Hours Guarantee The guaranteed number of labour hours and related top-up compensation is removed and will no longer be in effect after February 28, 2019. 5. $15 Administration Fee The $15 administration fee payable to accredited shops will remain in place for the term. 6. Labour Rates The labour rates will remain the same as those in effect on February 28, 2019, and there will be no increases to the rates (CPI or otherwise) in either year of the term.

  5. 7. Additional Items added to Designated Repair Designated Repair will be updated as per previously discussed criteria with the Technical and Cost Containment Committees. 8. No Payment of Industry Association Fee MPI will no longer pay the ATA and MMDA the “association fee” that it previously paid (previously $50,000.00) in either year of the term. 9. Paint Material Rates Paint material rates will remain the same for the term.

  6. 10. Additional Labour for OEM/Mitchell P Pages Items MPI will allow for additional operational labour for body and paint for the below listed items in accordance with its Estimating Standards. MPI’s high-level treatment of the stated items are as follows: • Prep raw plastic components – 0.2 per refinish hour for the prep of eligible parts (only applies to raw, plastic bumpers, grills and mirrors), must meet qualifying criteria in Estimating Standards. • Denib– no additional labour hours for the term. • Finish, sand and buff – 0.3 per refinish hour, must meet qualifying criteria in Estimating Standards. • Refinish of weld burn damage – 0.5 refinish hours to spot refinish panels with weld burn damage, must meet qualifying criteria in Estimating Standards. • Masking operations – no additional labour hours, MPI will include masking for overspray in a Paint Consumption Study.

  7. 10. Additional Labour for OEM/Mitchell P Pages Items (continued) • Blend - Calculated Mitchell times for blend when required, must meet qualifying criteria in Estimating Standards. • Inspection of seatbelts – no additional labour hours, should be included as part of proper estimating procedures. • Removal of components within 12-18 inches of welding – allowance of 0.2 hours for the R & I of computer modules when welding, must meet qualifying criteria in Estimating Standards. • Feather, block and prime – 15% of the body repair time to be paid at the paint rate, repair grid to be developed based on a future time-based study.

  8. 11. Limited Use Toners MPI will pay for an increase in paint material when limited use toners are required, through MPI’s exception handling process. 12. Frame Alignment and Gauging MPI will pay an additional hour for frame inspection at the time of estimate/blueprinting only if frame alignment is required as part of claim repairs. If the frame damage is not visible then the gauge frame request must be supported with a frame damage report from an approved 3D electronic vehicle measuring system. MPI will pay for additional labour hours for frame alignment where required through MPI’s exception handling process. MPI will not compensate shops for partial disassembly as part advance blue printing. Gauging a frame would be part of the internal shop process for completing an accurate first estimate. 13. Pre and Post Scans MPI will pay 0.3 hours for pre and post scans at the body labour rate, subject to qualifying criteria in the Estimating Standards.

  9. 14. Calibration MPI will pay 1.5 hours for calibration at the designated repair rate where required. MPI will also pay based on the exception handling process where applicable (e.g. OEM dynamic calibration). 15. Payment for Parts MPI will pay for fasteners over $10 per unit as a part if identified in Mitchell as single use or supported by OEM procedures as single use. For foams and adhesives: continued exception handling process will be followed, additional analysis is required. Executive or Technical Committee will review foams and adhesives to determine compensation for these parts. By March 4, 2019, the Trade commits to delivering a full compensation proposal to MPI, including kits and Mitchell treatment. By April 1, 2019, MPI commits to providing its response and feedback on the proposal to the Trade – i.e. whether the proposal is acceptable or requires changes.

  10. 15. Payment for Parts (continued) The parties agree to use best efforts to jointly resolve any issues/discrepancies on the proposal by April 30, 2019 so that MPI can initiate payment for foams and adhesives by June 1, 2019. Both parties acknowledge that they are responsible for enabling payment to commence by June 1, 2019 and that this must be a good faith, collaborative effort. The parties further acknowledge that the timelines in this section are subject to external factors such as Mitchell abilities. 16. Cheapest Available Glass For Southern Manitoba: MPI will pay for glass based on the cheaper of NAGS less 20% or OEM on claims, subject to availability. For Northern Manitoba: parties will work to achieve an overall Northern Manitoba strategy. After 90 days from the effective date of the agreement, MPI will pay the cheaper of NAGS less 10% or OEM on claims for Northern Manitoba, unless the parties mutually agree that not enough momentum has been made on the Northern strategy.

  11. 17. NAGS Discount The NAGS discount will be at 20% for Southern Manitoba. Same process as under #16 above (i.e. after 90 days, NAGS discount will be at 10% for Northern Manitoba). 18. Mitchell Licensing Costs MPI will continue to pay Mitchell licensing costs for shops during the term. Future payment of this cost is not guaranteed. 19. Subletting The percentage of work on a repair claim allowable for a repair shop to sublet will be reduced from 40% to 20%. For repairs that require an exception (rural, heavy mechanical damage) MPI will accommodate, accordingly.

  12. 20. Sublet Towing MPI will pay for sublet towing where the designated repair rate is applicable within the new 20% maximum sublet per claim/repair rule. MPI will not pay for tows for pre and post scans, calibration or frame, or for towing that repair facilities use for load leveling between affiliated shops. MPI will pay for tows for calibration, in the event that the calibration is required to enable safe driving. 21. Discontinue Repair Only Accreditation for Glass-Only Shops MPI will discontinue “repair only” accreditation status of Glass-Only Shops and will require glass shops to have a permanent fixed location in order to remain accredited after December 31, 2019.

  13. 22. Recovery Fees MPI will collect a recovery fee from repair facilities in order to offset costs for customer referrals and improper repairs detected during repair accuracy inspections. Shops will be given a warning only in the first year of term. Situations that warrant $1000 and $2000 fee (including first warning in Year 1) will be referred to the Executive or Technical Committee (or designated group) on a periodic “TBD” basis for determination. 23. Off-Site Estimating Off-site estimating will no longer be permitted; i.e. MPI will no longer allow shops to perform estimates at locations other than their main site. 24. Executive & Technical Committee Collaboration Items Foams & adhesives, “uninsured services”, Northern strategy, parts strategy rollout, repair time grid are all items to be addressed by one of the two committees.

  14. Have you had an opportunity to calculate the effect on NET of this new contract? As an example of the effect  on a million dollar shop, allowing each shop to do their own math on the effect in their shop.  Questions:

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