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Steering.  Supressed Labor Rates. Capping of Repair and Refinish Materials

If you’re a collision industry professional, these hot-button topics are hurdles you’re facing in your business as you work to serve your customers and keep your business profitable.  These are some of the tough issues the Georgia Collision Industry Association (GCIA) is currently addressing.
As Executive Director of the GCIA, Howard Batchelor serves the collision industry and consumers in an effort to “promote professionalism and consumer awareness of the Automotive Collision Repair Industry in the State of Georgia.”          Since its founding in 1997 the GCIA has worked toward reaching that goal through education of its members as well as collision professionals around the state, while also engaging consumers by educating them about their rights.
The GCIA was founded by a group of collision industry professionals who wanted to address the issues concerning the industry, according to Batchelor. “Mainly the group wanted to promote consumer awareness concerning the collision industry and promote professionalism within the industry,” he said.

There is the way “it should be” and then there is “the way it is.” Deal with the way it is and forget the way it should be. “It should be” will never benefit you; you will become bitter and cynical and could become distracted from the problems at hand.

We have all watched changes in the economy over the last year and we have been forced to readjust our approach to our businesses. We wonder what we can possibly do to return things to the way they were two years ago. We may think things would be different if we had done things differently but the reality is, we have what we have, and looking back only hinders your progress.

I remember during the last recession and I beat myself up pretty bad about expanding and opening up a second location only to be met with the worst recession of my working life. I thought I had made a poor decision to purchase a building and open a second location only to find myself in a financial crisis. After three years of beating myself up I finally realized that every decision I made was a “good one,” based on the information I had at the time. I quit beating myself up and began to make decisions once again with the information I had at the time; I had to close one shop so I could sustain the other.

A frequent question I get on an almost weekly basis is as old as our industry itself and the answer is still “it depends.”

What is the best spray gun on the market? Sounds cut and dry, but the answer to this question is much more complicated than it first seems. Besides the obvious technical aspect of this question, there are also emotional considerations that are weighing heavily in the decision-making process of a painter.

Personal preferences are important in this matter and vary from technician to technician. If a spray gun doesn’t feel right in a technician’s hand, chances are it will not become a natural extension of the applicator’s hand. This could result in less than superior finishes and often leads to a technician second-guessing his or her ability to produce what is expected of them.

The New Year is well under way and by now most of us have probably forgotten our New Year’s resolutions—that is, if we even bothered to write any. Those of us who did write some probably tapped our mental list of those things about ourselves, our businesses, our relationships and our finances that we would like to improve. It’s also likely that our list of resolutions was incomplete. There were probably many more things that needed improvement that we simply didn’t notice.

After a while we become so accustomed to that spot or tear on the sofa that we don’t notice it anymore. Perhaps we’ve had that old poster on the wall so long that we haven’t noticed that it’s hopelessly out of date and no longer a complementary decoration for our waiting area. Once we begin looking at some aspects of our shop from someone else’s point of view, we may realize that some additional resolutions to change things for the better should have been on that list.

Here is a true story from my book that might spark your interest.

A customer called [my auto electric shop] and said he just purchased a car from the police auction, but it had some sort of strange noise coming from the driver’s side electric seat. It seems every time he moved it there was a strange electrical sound. He thought there was something wrong with the seat motor. He was coming to me, an auto electric technician, to get it fixed.

“Sure,” I said. “What kind of car is it?”

“It’s a Peugeot,” he answered.

I’m not much on Peugeots, but I told him I could take a quick look at it and see if I could do anything for him.

A day or so later the car arrived at the shop. After pulling it into a bay I tried the driver’s seat. Sure enough, as you moved the seat forward an inch or two, a horrible loud buzzing of electricity emanated from under the seat. Rolling the seat back would stop the noise. Well then, what to do? I rolled the seat forward to the spot that made the noise. It seemed to be pretty consistent, same place, same noise. When I moved the seat to the spot that made the noise I got out of the car and looked underneath. The noise immediately stopped … nothing, not a whisper of any strange  noise or buzzing.

We never had DRP relationships and have heard horror stories about them. But some days it seems we need to become a DRP shop just in self-defense. How do you make the decision?

For years DRP vs. non-DRP was supposedly a dividing line between opposed schools of operating thought. But “Should we be a DRP shop?” was always more about owner temperament than a business decision. A political mood isn’t a strategy.
Today, the useful question is “Is there an available business mix of adjusted claims and DRP relationships which would make my business stronger?”
Getting the answer is hard work, but indispensable for a seriously competitive repairer. Dozens of operators who traditionally wouldn’t have dreamed of a DRP deal in the 90’s have quietly added one or two very carefully selected ones. They have also politely declined many more than they added, a decision requiring discipline found only in facts. An even larger number who always had many DRP’s have gradually “weeded out” half or more of them, leaving just a few that met their needs. For either of these sets of owners the question “Are you DRP or non-DRP” is unanswerable and meaningless.
Every market is different, and every insurer. Even with the same insurer’s standardized DRP terms, interpretation and enforcement can vary greatly from region to region, sometimes justifiably, occasionally indefensibly. How many cars can you expect? Don’t bother to ask. They don’t know, and couldn’t guarantee it anyway.

But it’s essential to ask four questions:

● Exactly what discounts and allowances do you require?
● Exactly what will you or won’t you pay for in the repair? (Go over a closed file)
● What additional paperwork and administrative processes are required?
● How exactly will my performance be measured, rewarded, corrected?

Never argue with the answers. Just ask and make notes. Read the agreement from beginning to end, and make sure it matches. If it doesn’t you’re entitled to ask why. (Obviously, anyone who can’t or won’t provide specific answers has saved you further work on this “opportunity.”) Now run several recent typical adjusted claim repairs against the DRP profile and look at gross margin dilution. You could be in for a surprise. Remember, all that insurer’s adjusted repairs you’ve been doing will now come under the DRP terms. Also ask yourself if you will have to add indirect labor for the admin requirements.

In the last analysis you have to believe that the impact on your processes and the margin dilution (above the line and below) produces enough absolute dollars of net additional income from each DRP repair to be clearly worth it.

When you look at it critically in advance (or afterward in the light of real experience), if it doesn’t make it, it doesn’t make it. But if it looks good, give it your uncompromising support. Unless or until they change the rules arbitrarily (in which case you courteously resign), be the best repairer in their local network. You will get cars from their underperforming alliances.

We have a very skilled and intelligent Production Manager with one fault that drives me nuts. When he occasionally needs to be corrected on some minor issue he simply can’t say “Thanks, I’ll take care of it”.  No mater how routine, he makes it intensely personal, and turns it into an hour-long soap opera.  He loves to debate, and he’s very good at it.

You’ve got yourself a subclinical drama queen, a not-uncommon species these days. Assuming he’s worth keeping, otherwise, the cure called for here is changing the transaction from a conversation to a drive-by. Never correct him while either of you are sitting down, in an office or standing still. A corrective direction is not a chat.
First, mentally rehearse the point into twenty words or less, e.g. “Dick, please don’t leave the keys in the gate any more”.     Then, while he’s right in the middle of things, get the needle in and out in less than two seconds, keeping your voice level, and keep moving right on out of sight.
Avoid him for at least an hour, more if you can, and then make the next contact upbeat and on an entirely different subject.  If he still absolutely insists on re-opening the point you must, no matter what, never, never say a single word other than the exact same words you said before, even if you have to say it several times. At some point, he should break the habit. If he can’t, and he isn’t a blood relative, replace him. Your organization can’t afford him.

Toyota Motor Corp. said Feb 4 it was aware of concerns about the safety of its Prius hybrid and that it has modified the braking system to address the issue.

This month we introduce---for fun---a humorous column excepting short stories from Scott "Gonzo" Weaver's book, HEY LOOK! I FOUND THE LOOSE NUT! Scott is an auto electric shop owner in Oklahoma. His stories are true.

Check out his website at www.gonzostoolbox.com, or email him at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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Metlife has written to shop members of its DRP (Guaranteed Repair Program) suspending the use of aftermarket steel bumpers, bumper reinforcements, energy absorbers, brackets and radiator supports. The letter dated Feb 5, 2010, stated:

The U.S. House of Representatives is considering a partial repeal of the McCarran-Ferguson Act that will apply only to health insurers. H.R. 3596, the Health Insurance Industry Antitrust Act, is tentatively scheduled to come to the House floor week of Feb 14.

Sears Holdings Corp. plans to expand its Sears Auto Center network by recruiting former car dealers as franchisees. Sears said it is launching the Independent Sears Auto Center franchise program, allowing auto dealers who lost their GM or Chrysler franchises to operate as licensed Sears Auto Centers.

Automotive News is reporting that Toyota announced, on Feb. 9, a worldwide recall of 437,000 hybrids, mostly of the 2010 Prius, triggered in part by an NHTSA investigation  of braking problems with the 2010 Prius.

The U.S. auto industry rebounded from last January's sales collapse with one big exception: Toyota, which lost an estimated 20,000 sales after it stopped selling eight models because of defective gas pedals.

Toyota spokesman Mike Michels said the company received feedback from the government, but he would not say what that was or when it intends to start sending out parts. The company has said it plans to announce the fix the week of Feb. 1.

Toyota Motor said on Feb. 1 that repairs to accelerator pedals in millions of recalled vehicles would begin later this week as it tried to reassure customers and show that it had the situation under control.

Also, Tulsa area shops backed up

And Tulsa Shop Manager Wins New Welder at NACE

click to link to SouthWest stories

The Professional Restylers Organization (PRO) will launch the 2010 Technical Skills & Training Conference (TSTC), a new, one-day training program designed specifically for restylers and installers. The inaugural event takes place Friday, April 30, 2010, at the University of Northwestern Ohio (UNOH) in Lima, Ohio.

Automotive Service Association (ASA) has written a letter to National Highway Traffic Safety Administration (NHTSA) administrator David L. Strickland asking him to review why NHTSA does not regulate aftermarket crash parts and to begin an aftermarket crash parts regulatory program as soon as feasible.

Keystone Automotive, a subsidiary of LKQ Corporation, has announced that it has completed the first phase of its testing of aftermarket reinforcement bars. Keystone reports that the tested aftermarket reinforcement bar satisfied Federal Motor Vehicle Safety Standard No. 208 (FMVSS 208) in a 35 mph frontal impact test.

Distracted driving is an attention problem not a manual operation problem, so it’s no surprise to many that laws banning the use of hand-held phones while driving have failed to reduce crashes, according to research conducted by the Highway Loss Data Institute.

Auto body repair associations in Connecticut and New York warned consumers Feb 11 that some replacement bumper parts may not be safe.

Concerns regarding consumer safety and compromised automobile crashworthiness continue to center on the use of certain aftermarket structural parts. NSF International announced, on Feb. 8, the launch of a new Automotive Parts Certification Program to address these concerns. The so far first-of-its-kind program verifies both the quality and performance of aftermarket structural auto parts via testing and inspections. CAPA has also recently announced a structural parts program. See that story here.

I-CAR, The Inter-Industry Conference on Auto Collision Repair, has announced that it will premiere its new course, Advanced Material Damage Analysis (DAM08), on March 1. The course offers students training on how advanced materials affect collision energy management along with understanding the necessary repair considerations for such materials.