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Looking back lends valuable insight to industry future |
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Thursday, 05 April 2007 |
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Page 1 of 2 Sometimes the best way to look forward is to spend a few minutes looking back.
That’s a concept that came to mind recently looking through a file of industry-related notes and articles from 15 years ago. What can the industry today learn from the ideas and topics being discussed then? What has changed – for better or worse – and are there areas in which virtually no progress has been made? And what should we be doing differently now to ensure we’re not just treading water 15 years from now in 2022?
Standard-setting begins
Two industry organizations were just getting their start back in 1992.
“We understand that almost everything we do now through the mail, over the phone or with a fax will eventually be done from computer to computer with electronic files,” Erick Bickett said in 1992 as he, a California shop owner at the time, worked through the Collision Industry Conference (CIC) to create what would eventually become CIECA, the Collision Industry Electronic Commerce Association. “If we want to take advantage of that technology with the efficiencies and accuracy it offers yet at a price that we and our customers can afford, then we must as an industry band together to be part of setting these standards.”
Bickett, now CEO of Fix Auto USA, compared collision repairers at that time to travel agents who had to use multiple computerized reservation systems to deal with different airlines because of a lack of standards. CIECA was created to develop standards to help the industry avoid the hassles and costs associated with, for example, shops having to maintain multiple estimating systems.
From that somewhat limited perspective, CIECA’s efforts over the past 15 years may at first seem largely unsuccessful. Witness the turmoil this past fall, as Midwest-based insurer American Family began requiring its direct repair shops to use the Audatex estimating system, just a few years after it had shifted from requiring those shops to use Mitchell International’s system rather than ADP’s.
But to a large extent, such insurer requirements are more business-related than technical. The CIECA standards are in place to allow an insurer, from a technical standpoint, to receive estimate data files from any of the Big Three providers. And certainly CIECA’s work – largely conducted by industry volunteers – has benefited the industry in other ways over 15 years. So although the industry is still grappling with computer- and digital-related issues, few would argue that the standards-setting effort Bickett helped push for in 1992 has been for naught.
Foundation gets its start
The other industry organization still in its first year of existence in 1992 was the I-CAR Education Foundation.
“The Foundation is attempting to network vocational education instruction across the country; trying to establish models of what an entry-level technician for the repair community is; what expectations a shop owner should have of an entry-level person; and what someone leaving the vocational education system should be able to do six months or a year later,” Joe Landolfi, at the time an executive with Kemper Insurance, said back in 1992. “It is trying to develop an ongoing training program so the collision repair industry has consistent as well as new sources of people coming into the trade.”
As with CIECA, it could be argued that the Foundation hasn’t fulfilled its early promise. Few would say that even in down times in many markets that the supply of qualified technicians is over-abundant.
But also like CIECA, the Foundation can point to accomplishments that have certainly helped although not solved the situation it was created to address. It has created up-to-date curriculum and provided collision repair instructors with other tools to improve such training programs. It has encouraged more of the industry to get involved with those schools, and again provided advice and tools to help them do so successfully. It has created scholarship funds, a speakers’ kit and two websites aimed at kids (www.collisionkids.org and www.collisioncareers.org) that the industry can use to help attract students to the industry.
“It’s a little like eating an elephant: you have to keep nibbling away at it, one bite at a time,” Massachusetts shop owner Chuck Sulkala said, who was one of the four first trustees for the Foundation. “When I first got involved, I wasn’t sure there was a lot we could do. But I’m very pleased and proud of having been involved with the Foundation. It’s done a good job, a hell of a job.”
Insurer loans to shops
Sulkala, by the way, also floated an idea back in 1992 that on the surface didn’t seem to go anywhere: insurance company loans to collision repairers.
“You talk about investing your earnings in order to realize a gain,” Sulkala said to insurers at a CIC meeting in 1992. “Why can’t you set aside a small portion of this investment reserve to be used within the collision repair industry? It would make it easier for our industry to get mortgage money or buy tools and equipment. If we’re looking at becoming better-equipped and providing better services and faster turnaround in order to cut your costs, why can’t you do something for the collision industry? Providing this type of low-interest loans to the people that are going to work with you would be certainly a step in the right direction.”
If Sulkala envisioned a one-shop business getting insurer loans for a new paint booth, then that certainly hasn’t happened. But since 1992, insurers have invested in the industry, whether through Allstate’s purchase of Sterling Collision Centers, or Farmers Insurance and other companies investment dollars into consolidator operations. The relative success or failure of these ventures is something that is certainly still open to debate.
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