Back in 1997, an article compiled some thoughts about the future from various players in the collision repair industry. A more recent reading of the article proved interesting; some of the predictions were startling accurate, while others, in hindsight, were partially if not completely - and often ironically - wrong. 

Randy McPherson, for example, at that time was on a tear. Just a year earlier, McPherson had formed Collision Auto Repair of America (CARA), growing the Minnesota-based consolidator chain of shops to a $15 million company within 90 days of its formation.

"This isn't going to be an easy industry to consolidate," McPherson said in the 1997 article. "It's a very complicated, people-oriented, systems-oriented business. And autobody owners came up with a new definition for the word 'independent.' I believe that ultimately there will emerge three national players, with a half dozen strong regional players and at least one billion dollar player in this industry. But my sense is that for at least 10 years, consolidators won't account for any more than 30 percent of the business. You're still going to have 70 percent of the players out there that will be independent owner- operators.

"One of the struggles I've gone through the last couple years is who is my customer," McPherson said in the article. "We've come to the conclusion that ultimately our customer is the insurance company. Now they have insureds who are part of the process - we're not taking them for granted - but we really need to embrace (insurers) as our customer. That's a major change for our industry."

In the months following this statement, CARA continued to grow quickly; at its peak it had 26 locations in five states and $40 million in annual revenues. Mc-Pherson now admits his goal was to capitalize on the late-1990s Wall Street ap-petite for industry "roll-ups" or consolidators. But too many of the shops CARA acquired in the rush for growth were poor performers that the company never had the internal systems and structures to get turned around. With salaries for executives at its headquarters, and the cost of travel to get trainers to its added shops in Las Vegas, Denver, Wisconsin and Indiana, CARA soon was weighted down with overhead.

In June of 2000, just three years after the above quotes from McPherson and six months after posting a loss of $2 million in 1999, CARA locked the doors on its remaining 13 shops and filed Chapter 7 bankruptcy.

The role of recyclers

Lieberman

Back in 1997 prior to becoming part of LKQ Corporation, Herb Lieberman was the owner of Lakenor Auto Salvage in Sante Fe Springs, California, and the vice president of the Automotive Recyclers Association. Lieberman was certainly correct in at least some of his 1997 predictions for the industry.

"Recyclable parts will play a much greater part in collision repair in the future," he said. "Recyclers will form real partnerships with insurers who obtain the salvage vehicles that are so vitally needed to have an adequate supply of quality parts to furnish (the collision repair industry) at reasonable prices."

But some of his predictions haven't come to pass.

"I also believe that beginning in the year 2000 and beyond, recyclable non- deployed airbags will be used in the repair process," Lieberman said. "I think the percentage of repairable vehicles leaving shops, the victim of total loss settlements, will be reduced because we will work in partnership - all of our industries together - to ensure that those vehicles can be repaired safely and professionally at a reasonable cost. National titling legislation will be passed so that we will have uniform salvage titling in all 50 states, and that legislation will include a comprehensive definition of a non-repairable vehicle."

Despite these predictions, the debate over use of non-deployed airbags continues (no U.S. insurer is calling for their use), the percentage of vehicles declared total losses has climbed to 17 percent (up from just 8 percent in 1999), and no national titling legislation has even been proposed in recent years.

The "virtual company"

Though Progressive's "concierge" program may not have been exactly what he was envisioning, Roger Cadaret in 1997 predicted consumer interest in a "one-stop" approach to collision repair.

Caderet

"If a customer gets his car damaged in an accident and they want it repaired, the last thing they want to do is talk to the glass shop, the repairer, the tow company, the insurer, the parts supplier, etc.," Cadaret said. "They want to go directly to an insurance representative or a shop, leave the car and forget about it, and know they are going to get their car back in the shortest time possible and get the best quality job possible. All those companies behind the scenes are going to have to learn to operate together, as if for this particular vehicle they are all a single cooperation."

At the time, Cadaret was the executive director of the Collision Industry Elec-tronic Commerce Association (CIECA), the organization created to help develop standards for the various electronic links being developed between insurers, shops and vendors. Cadaret left the organization in 2002, but his 1997 quote may have inspired the folks at Progres-sive Insurance, who are in the midst of a national roll-out of the "concierge" program in which the consumer drops off and picks up his or her car at a Progressive service center, not once setting foot in the body shop that repaired it.

The industry in other ways also has made some progress toward Cadaret's vision of a 'virtual company,' where repairer, insurer and vendor are electronically and seamlessly linked.

"What CIECA is doing is developing the infrastructure so you won't have to make that telephone call to somebody at that other company so that they can tell you what's in their computer," Cadaret said in 1997. "You will program your computer to call that other computer. That's what electronic commerce is all about."