Friday, 31 December 2004 09:00

Collision repairers are on a roll

Written by Dick Strom

My parents were communicators - the kind that communicated more by their actions than by mere words. Needed correction was meted out quickly and in accord with the offense, and life was idyllic as long as we stayed within the well-established, well-known family parameters. But as a constant reminder lest one of us urchins challenge their authority, a leather strap hung from a nail on the left side of the doorway to our one and only indoor bathroom.

And so it was that at the impressionable age of around ten, I watched in awe as Mom proceeded to get the attention and respect of a steer that apparently didn't realize he was missing his "bullish" paraphernalia. One day as I walked through our pasture, this steer scared the living daylights out of me - wildly charging, snorting, chasing, and kicking his heels at me. A long way from safety, I dodged him and ran until I was able to roll under the fence.

Unfortunately for the steer, Mom saw his shenanigans, and confronted him on the spot with a 2x4, nailing him on the head so thoroughly that it left him temporarily daffy and seriously bleeding, with only one horn remaining. That evening, the local vet removed the remaining horn, and when he was fully-grown (the steer, that is), we ate him. Though I doubt he ever understood how this barely-five-foot short, 120-pound woman so thoroughly gained his attention, until the day a .22 rearranged his gray-matter he went out of his way to avoid anything that walked on only two legs.

From a casual observation it would appear that most repairers haven't the intelligence of this dumbest of animals. Repeated blows from insurers have apparently left many among us daffy, and headed for the slaughterhouse. And it all started with that which has been described as "a sort of living oblivion" - APATHY.

From Apathy…

Jaime Alligood, a consultant for Causey and Associates, in her recent article "The Insurance Industry Loves Your Apathy" related her frustration in trying to muster her state's collision repairers to attend a legislative reception - only one of the 40 shops contacted even bothered to respond. Projecting the obvious sobering end result of shops' apathy, she asked, "What will it take to get [collision repairers'] to get involved? Will an insurer-owned body shop built next to yours do it? Will it take the insurance lobby getting laws passed requiring customers to take their cars to the insurance adjuster at an insurer-owned shop, where he is also the appraiser for the shop?

Can your business survive on the junk repairs insurance-owned shops won't have cluttering up theirs? How about laws allowing insurance policies paying only for aftermarket parts? Will it get your attention when insurance companies purchase all your parts and paint direct from the manufacturers? Would insurance companies' cutting labor rates in half, like they do some doctors' fees, spur your attention? What if your state legislature passed a law establishing a bureaucracy with rules so one-sided that you could be investigated and charged with fraud, just because an adjuster thinks your estimate is too high? (Some insurers already have "gone after" some shop owners for fraud because the shop's estimate was higher). Would the above-mentioned things happening cure your apathy?"

Her point, though extremely well articulated, is not well taken by the collision industry at large: For some strange reason this industry seems to host a most incredible inventory of pathetically near-sighted isolationists. Yeah, I know what you're mumbling to yourself…"Right now I'm too busy playing 'catch-up' at the shop to invest whatever time is needed to help chart my future… besides, there's others out there who'll take the heat, and I surely don't want to irritate my insurer-partners."

You are right about there being "others out there willing to take the heat." But you're wrong if you identified these only as the handful of collision repair professionals who have put their businesses, their money and their time on the line in a single-handed effort to assure this industry has a future. But not to worry - insurers, and more recently the Networks they are employing, have more than enough family jewels to make up for your lack.

To appeasement…

I was reminded of the state of the collision industry as it exists today while listening to a recent radio broadcast in which a Mercy Corps spokesperson was quoted as saying that this humanitarian organization has been "trusting in the power of persuasion and moral reasoning" to keep their workers safe from harm. He was alluding to the fact that Mercy Corps workers typically work unarmed and unguarded, even in volatile countries such as Afghanistan and Iraq. Apparently this organization believes that in so doing, even in countries hamstrung by ruling factions led by tyrants who wouldn't think twice before raping and torturing their own mothers, somehow they will see the good that Mercy Corps performs, and leave them alone. Sincere, yet sincerely wrong, Mercy Corps was shocked and disheartened when some of their workers were beheaded, others shot execution-style by a certain moral-less element within these countries they are trying to help. What a ship of fools! Civility didn't stand a chance for the second son born into this world, and with precious few exceptions, it hasn't stood a whisper of a chance since.

Collision repairers who believe insurers will mysteriously shed their present pernicious ways if this industry just gives in to them one more time are delusional and terribly near-sighted. It's the way of this world that most insurers, as do most terrorists, have respect only for those who wield greater power than do they themselves. Large numbers and media coverage, solidarity and political power, laws and lawsuits are the only things that will ever have a chance of swaying insurers. Too many among our number falsely imagine that somewhere down the line insurers' conscience will be pricked to do the right thing… that somehow, someday, in some way their sense of morality will mystically surface to benefit a repair industry that is backward, confused, splintered, and virtually dysfunctional - and things will get better for repairers. But don't count on it this side of Heaven which, by the way, won't be infested with insurance companies.

To total control

And you thought insurers were the biggest controlling force we'd ever have to face? Think again! The recent entrance of collision networks - yeah, the same ones that have so efficiently and ruthlessly decimated the glass industry are about to do the same with your collision industry. A June 16, 2004 Pittsburgh Business Wire article announced in part, "(PPG's) LYNX Services announced today that it has become the exclusive national provider of automotive physical damage (APD) repair management services for Ohio Casualty Group. The LYNX-managed repair services include the LYNXSelect ® direct repair program, estimate auditing, and rental car concierge… LYNX Services connects Ohio Casualty adjusters and customers with a national selection of qualified repair shops via a Web-based portal, allowing for easy dispatch and retrieval of repair estimates and images… 'We (the insurer) anticipate financial improvements (at whose expense?.. especially considering the network will retain a healthy hunk of the profits) as a direct result of the (network) managed repairs by LYNX Services.'" stated Ohio Casualty's Phil Horst.

Within several weeks of PPG glass network's LYNX Services announcement that they were entering into the collision claims arena, other networks also announced they were developing, or were ready to release their own collision claims processing systems. The only logical reason for this is that LYNX has had extremely good success in "navigating" (politically correct term for "steering") work to glass network shops. And beyond coincidence is the timing of virtually all paint manufacturers when they announced within weeks of each other that they intended to enter into collision claims processing via a network of shops (isn't it interesting how "claims processing" and "network of shops" always seem to be mentioned together). LYNX has stated that they intend to use the very successful glass claims model in collision claims. Other paint manufacturers, most likely seeing the possibility of their market share being steered to PPG Certified First and LYNXSelect member-shops, have also announced their entrance into claims processing of collision shops.

LYNX is one among many networks selling shops a supposed quality-validated program for insurers to back. You as a shop owner are expected to believe you are signing into a program that will get you referrals from insurers for quality work, much like the "quality programs" many shops signed on in the past with paint manufacturers. What many collision shops fail to comprehend, though, is that quality can not be sold by LYNX, or any other network, to insurers, any more than you can sell Mephisto shoes to any entity that refuses to pay for any more than functional equivalents from K-Mart. Insurers want low cost, and the quality "monkey" removed from their back and placed on the shops' back. Shops which haven't yet accepted the fact, soon will discover that networks' version of Offer and Acceptance (O&A) is, "Accept" what we pay, or we'll "offer" the work to your competitor.

When heavy price controlling pressures are placed on networked collision repairers, selling "quality" to insurers will be displaced with selling "compliance to new cost-saving price auditing.". Its much like an arms merchant selling firearms to both sides involved in the same war, while promising each side they are getting the better deal. In the end, though, networks realize their money comes only from insurers, to whom they will always cater.

Though disorganization has thus far cost the auto glass industry much more than it has cost the collision industry, this will soon change: While the auto glass industry has begun uniting, organizing, and is making inroads into regaining control, collision repairers for the most part yet remain uselessly estranged from each other. As one in the glass industry put it in so many words, "We bent over backwards to please insurers, we fell for a pipe-dream, and so we arrived where we are today, incrementally." And, so, is the collision industry about to arrive.

Collision Repairers Are On A Roll!

There is yet hope for the collision industry, but it won't happen without your help. If the above makes sense to you, if you are finally convinced it is time to take action, contact me.

Dick Strom, Modern Collision Rebuild, 9270 Miller Road, NE, Bainbridge Island, Washington 98110; (206) 842-3621; e- mail: moderncol@qwest.net.