Immobilizer program too cosy, some charge

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This article was published 11/06/2013 (4554 days ago), so information in it may no longer be current.

A national organization dedicated to harmonizing the Canadian vehicle-inspection process says Manitoba Public Insurance is “defrauding” vehicle owners because its immobilizer program doesn’t cover all the products on the market.

“I think they’re very much in bed with the two distributors,” says Wayne McAlpine, a consultant with the Central Automotive Inspection Records and Standards Services Corp. (CAIRSS). “It’s 100 per cent a conflict of interest.”

Vehicle owners can have Masterguard or Autowatch immobilizers installed. Masterguard is sold exclusively by CAA Manitoba. Absolute Autoguard has exclusive rights to the Autowatch.

There are other immobilizers on the market, including the Quebec-made Trimobilizer. Danny Prezeauis, vice-president of international sales for Fortin Electronic Systems, says his product is priced in line with the two approved immobilizers and has the advantage of being Canadian-made. His product was turned down by MPI, he complained in an email.

McAlpine and Anthony Mannella, CAIRSS director of enforcement and compliance, have a long and contentious history with MPI. In 2010, CAIRSS sent a lengthy report to then-federal transport minister Chuck Strahl. In it, the group condemned the Vehicle Security Installations Bureau, a corporation set up at the request of MPI to provide regulatory services to the immobilizer program. CAIRSS pointed out the bureau’s leadership consisted entirely of individuals involved in the sale and installation of immobilizers.

The result, they claim, were “serious cases of persistent conflicts of interest.”

In 2010, the vice-president of CAA Manitoba was president of the Vehicle Security Installations Bureau. The facility director was a CAA employee. The secretary-treasurer was an Autowatch distributor. The three voting directors were either principals in the immobilizer-distribution companies or installers.

The foxes were in charge of the henhouse.

In 2009, the cost of an immobilizer installation jumped to $560 from $325. MPI spokesman Brian Smiley said in an interview the unit prices increased as demand dropped. Installers upped their hourly wage. And installers got more money per unit when the customer base dried up.

Smiley said the most important numbers are these: The immobilizer program has saved Autopac ratepayers about $125 million in decreased auto-theft claims. On average, three vehicles are stolen daily in Winnipeg compared to more than 30 per day in 2006.

Owners forced to have the immobilizers installed because their vehicles were on MPI’s most-at-risk list didn’t notice the increase because MPI covered the cost. Those who had to pay to install a replacement device felt the pinch.

Trying to determine who profited most from the immobilizer installation program is difficult. CAA has the exclusive rights to Masterguard (as they did before the program began). It opened a new facility to install the devices.

“As the sale of immobilizers was not a large component of the CAA Manitoba product line and in the interest of addressing a large societal issue, CAA Manitoba chose to significantly reduce the retail cost of the Masterguard immobilizer and agreed to provide it to MPI at cost, including coverage of procurement, handling, risk and carrying costs,” CAA spokeswoman Liz Peters said in an email after a series of terse exchanges. “In effect, we elected to make a nominal return to do our part in addressing a societal concern. So on the actual sales of the immobilizer product, we basically broke even in covering our costs. Please note CAA MB is a not-for-profit organization.”

That does not make them a non-profit.

When they set up their own installation facility, she wrote: “This took a considerable amount of effort, cost, administration and risk. For this, CAA Manitoba earned a return or profit on the same basis as all the other installation facilities in the city. Immobilizer calls were assigned to the installers by MPI based on consumer preference of location, and if that was not requested, MPI would assign the installation to the next facility on an equal rotation basis.”

She would not release CAA’s profit figures.

Installer Ray McKee says he considers the installation program “a bit of a joke.”

“CAA basically runs the immobilizer,” says the former VSIB board member. “MPI likes it that way.”

McKee says the early days of the program brought installers a lot of business, but it was the distributors who made most of the money. They get $100 for each unit sold. There have been 200,000 immobilizers installed in Manitoba since the program began.

The VSIB was hoofed from the program in April. Administration of the program is now the responsibility of MPI.

McKee says he’s still got issues with the program.

“You’ve got distributors double-dipping because they’re also doing installs.”

He used to install 10 or 12 a day in his small St. Vital shop. Now, it’s two a day.

Wayne McAlpine from CAIRSS says Autowatch is the superior immobilizer because Masterguard lacks an override switch.

“People should have a choice and they should know what’s out there. They should have the option of a third-party immobilizer, not just what the government tells them to have.”

lindor.reyolds@freepress.mb.ca

Lindor Reynolds, the columnist who wrote this story, will be taking part in a conversation with commenters below. Do you think it is time MPI reassessed the immobilizer program?