The Progress of this case will be followed from a


in chronological order with links to appropriate documents.

Top of Memorandum on the
Racketeering Nature of State Farm's Misconduct
for which this is an exhibit.

The List of Exhibits

                               Exhibit 8

   October 8, 1990
                                ROUGH DRAFT
   MEMO TO: Jack Gillis
   FROM: Ben C. Parr
   RE: Taiwan Technical Committee Findings
    1. Get 202-3 and 4 realigned and approved so that we can have Tong
       Yang PUR and RIM products in the CAPA manual. This needs priority.
    2. Investigate DTL procedure for checking certification on "farmed
       out" dies producing parts.
    3. Insist that when DTL is waltzed and danced about as we were, and
       sees that the manufacturer's quality is marginal for any reason
       (including management attitude). that it really totally inspect
       the entire aftermarket part manufacturing operation - including
       any dies and any stock on the premises.
                               COIN JOIN KEY
   At Coin Join Key we saw a significantly improved operation from three
     years ago, yet it cannot consistently produce quality sheet metal
    1. Many of their fixtures should not have been certified to the OEM
       sample (it didn't fit) and in some cases the OEM sample had
       obvious damage.
    2. Newer products did show improvement.
    3. Production parts for that day should not be certified.
    4. Observed a strong willingness to improve, but a lack of ability to
       do so. SUSPECT that DTL gave significant assistance to this
       organization and it appears some of it was incorrect and other
       portions not well understood, e.g.. edge waviness and other
       features necessary for the part to be satisfactory.
    5. Coin Join Key repeatedly asked for more feedback from CAPA on what
       to specifically correct.
       In my opinion they know what is inferior - they feel that since
       they got a CAPA approval their product, as produced, is good
       enough. They do not check their production runs for production
   Coin Join Key should (on a part number basis) be completely resurveyed
   by DTL in the strictest detail for certification and possibly cited or
                              decertified for:
    1. Fixture qualification to OEM part fit.
    2. Fixture maintenance and irregularities.
    3. Quality control protocol and procedure availability and for not
       adhering to that protocol.

   Wednesday we visited Haur Tay and DTL.
   Mr. John Chen arrived back in Taiwan from a 40 day U.S. trip to meet
   with us. John is the president of the Apex Group, which consists of
   Haur Tay, Coin Join Key and three other organizations. Apex Group
   members contribute to a significant majority of manufacturer oriented
   quality related complaints. He said that he had received complaints
   while in the U.S., but they were too general for them to fix anything.
   It was obvious, as we worked their checking fixtures using parts
   brought from the U.S.A., that they had heard from the Coin Join Key of
   the CAPA visit the previous day. They were not in production (this day
   was their Moon Festival Holiday), therefore we were restricted to
   viewing their checking fixtures and items from their finished
   inventory. We found unsatisfactory and inconsistent quality. Haur Tay
   was extremely cooperative, obviously and sincerely wanting to know
   "what" to correct.
                                                         *(Personal Note:
   Considering what we saw this time, coupled with the significant yet
   inadequate improvements they have made to date. I suspect they are
   saying, "Tell us how." (not what) to correct their deficiencies. We
   seem to be losing the complete meaning of their requests. I believe
   that they know when the part is not the same as OEM, but think that
   the differences are forgivable, or that the part can be "adjusted to
    1. Exactly the same as Coin Join Key.
    2. Accept the request that CAPA send back to the Apex Group, at their
       expense, returned as unacceptable in U.S. parts.
    3. CAPA have a strong presentation as far as to what CAPA means to
       the Taiwanese manufactures, to the U.S. body shops, to the U.S.
       importers, the Taiwan trading companies and the U.S. insurance
       company members. Only then will they understand the value of the
       CAPA Seal and its true meaning.
    4. CAPA find ways to improve communication to its Taiwan members,
       especially suggesting that when visiting the U.S.A. they visit the
       CAPA office. Today the trend is to only visit DTL.
    5. Procedure manual be revised to state that DTL (or certifying
       organization) be required to give reasons and demonstrate
       deficiencies which cause the decertification action.
    6. Revise procedure manual to require manufacturer tie in the CAPA
       seal number to a production lot. This will correct many of the
       observed difficulties and enhance the ability to track complaints.
    4. The Taiwan office records are pretty good from an administrative
       content viewpoint. Technical content accuracies and organizational
       factors need improvement.
    5. An average of 20 new parts per month are being investigated for
       certification by DTL. Improvements in efficiency are required.
    6. DTL (Don Auen) has a proposal for a procedure to replace the
       "container inspection program" yet assure that a "quality alert"
       for the prevention of shipment of substandard parts "is
       available". This might be a candidate for a Tech Committee meeting
       agenda item.
   The next few weeks are critical for CAPA. DECISIONS AND ACTION ARE
   REQUIRED. The NACE convention in New Orleans will see significant
   aftermarket part activity and the ABPA convention (after NACE) in San
   Diego can be made into an opportunity.
   At Tie Feng we saw an up scale Taiwanese manufacturer who produces
       over 100 parts - 34 for the North American market.
       We did not look at procedures and quality control protocols, but
       they were obviously in use! We saw assembly fixtures in operation
       and checking fixtures nearby.
       We saw a complete staff doing their job quite well, being led by
       proficient, well motivated, and well meaning management. The
       president of Tie Feng, Mr. Parkson Jong, is the new incoming
       president of TABPA and he took office on October 4. 1990 (the day
       of our visit).
   Work closely with this new president. He appears knowledgeable,
   capable and well meaning! The CAPA Director and he have a challenge
   that might easily become the best opportunity since the inception of
   Friday we attended the TABPA from 8:30 am to 12 noon, and then visited
   the MRL/TTRL Complex.
    1. At TABPA we saw a much more mature and disciplined group than
       previously observed. The Xerox copy of Appendix I is a partial
       list of attendees.
    A. Each of us made a statement pertinent to the need for quality
    B. We were courteously received and sincere, courteous appreciation
       was conveyed by the CAPA Tech Committee visitors.
       TABPA Committee members were introduced. There are four
    A. Sales & Planning.
    B. Public Relations
    C. Material
    D. Technical
   Committee number D is newly formed whose mission (according to Mr.
   Parkson Jong) is to "promote the production of quality parts." The
   chairman is from Nam Ji who sells mostly to Europe and the vice
   chairman is from Legion, which is affiliated with Keystone. I do not;
   believe that the chairman was present at the meeting. MRL and ITRI
   were in attendance.
    3. The following requests were made for us to take back to CAPA.
    A. Will CAPA help with specific complaint data and other detail
       necessary for improving part quality? Update frequently, report at
       least monthly (or more often) in a timely and informative fashion.
       Answer: Yes, we owe you that - from a technical viewpoint.
    B. Will CAPA supply an OEM master component? Answer: We can see
       advantages and disadvantages, but we will look at it.
    C. Can CAPA revise program to include drawings? Answer: We can see
       more disadvantages, but will look at it.
    D. Can CAPA help market CAPA parts? Answer: Do not know. USAA and
       Allstate policy of using (only) CAPA parts was again restated.
    E. Will CAPA talk to ADP regarding marketing of parts? Answer: We
       will look into it. Not a function of the Technical Committee, but
       we are considering developing a requirement that a decertification
       be immediately reflected by ADP.
    F. Would CAPA rate the manufacturers by some method of ratio parts
       manufacturers to number of complaints, or some other "report
       card?" Answer: I denied that it was a CAPA or a Technical
       Committee function to provide a report card, or a hit list. I
       wanted all manufacturers to compete among themselves, by their
       standards, to build and certify their best products. Tech-Cor and
       USAA said that they had no objection to this proposal! I agreed to
       bring to the CAPA organization their request and worded my reply
       as follows:
       (Read and interpreted to them.)
   "Obviously we do not have a consensus (here today), however, we do
   agree that we owe CAPA participants a thorough, accurate, and timely
   assessment of the problems that we see with the quality of the parts
   they produce." We will get back to them regarding this request.
   At MRL, we heard that there are three divisions of IRTI that might be
   of help to CAPA and TABPA.
    A. The MRL.
    B. The Mechanical Energy Research Lab (MERL) that deals with molds,
       dies, and fixtures, and have had successes with such high tech
       components as jet engine components for GE and Pratt and Whitney.
    C. Measurement Center, Mr. Li-Chung Lee, Ph.D has been given the
       responsibility to work this project. Mr. Lee indicated that he had
       some manufacturing experience and had studied in the U.S. I
       personally propose that the entire MRL/ITRI potential be discussed
       with Jack Gillis either at a special committee meeting, or as an
       agenda item with adequate discussion time available.
   Appendix II contains a "report of sorts" from one of the female
   interpreters/translators who was with us the first two days. I asked
   her for her assessment of what transpired and any other comment she
   had. She had lived in the U.S. while attaining an advanced degree at a
   well known university located in the Northwest U.S.A. (Oregon, as I
   recall). Take them for what they are worth!
   cc: Bob Mercherle
   Ed Schrank, USAA
   Jack Billington, USAA
   Donald B. Cameron, Tech-Cor
   Jerry Dalton, Craftsman Auto Body, Inc.

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Created: February 4, 2000
Last Updated: May 28, 2000