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Tuesday, 04 December 2018 22:42

In Reverse: The 1960s – Associations, Leaders and Poor Management

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Anyone who lived through the 1960s knows what a turbulent time it was politically, socially and culturally. There were some profound changes in the collision repair trade as well.

 

Born in the mid-1940s, the industry was starting to “come of age.”

 

Unlike today in the 21st century, when industry metrics are plentiful and easy to find, it was difficult to find accurate numbers on anything in the 1960s. The number of shops had been growing almost unabated since 1946. By 1969, there were an estimated 75,000 body shops in the country, but nobody had a figure on their size in terms of either square footage or number of employees. Earnest Rowe, then marketing service manager for DuPont Automotive Refinish Division, surmised that despite the great number of shops, most were very small operations, and most overworked. The universe of shops consisted of independents and a few dealer-owned shops, and none of them had to go begging for work.

 

Back then, the average hourly labor rate for collision repair was $4.50 to $5.50 per hour. In a trade magazine article, a shop owner noted labor rates had only gone from $4 to $5 per hour in 1951 to $4.50 to $5.50 per hour in 1963. Yet, insurance company adjuster salaries had gone from $225 per month to $450 per month. He questioned why labor rates had been frozen for so long. Another unidentified shop owner was quoted as saying, “…problems have existed in this business for a long time. We have been talking about them, but what the heck are we doing to correct them!”

 

Part of the change that the collision industry experienced in the ‘60s was the almost simultaneous emergence of three key elements.

 

The first was the evolution and proliferation of auto body associations. Smart shop owners saw the industry becoming more complicated and knew that they had to band together.

 

The second was emerging leaders. With any organization, especially those operated by volunteers, leaders eventually emerge. And thus, certain people within the industry began to stand out and assume leadership roles, bringing elements of the industry together.


 

And last, but certainly not least, was the advent of the nationally distributed collision industry trade magazine so the leaders could have a voice and shops would know what was going on. Soon, leaders and those willing to support them would have an answer for the shop owner who asked, “…what the heck are we doing to correct the industry’s issues?”

 

One of the earliest industry leaders to begin suggesting industry solutions was Art Fox, president of the Independent Garage Owners Association (IGOA). He began calling for more oversight of auto body shops, suggesting that all shops be licensed on a nationwide basis to ensure competent repairs. He noted that barbers in his home state of Iowa were subject to more legal oversight than the technicians who worked on cars were.

 

But the emergence of industry associations and leaders had a dark side. An article appearing in a 1969 trade journal provided one long-time shop owner’s vision of the collision business over the past 20 years. He noted that during the period from 1959--1964, as the collision associations began to emerge, insurance companies began to see them as a threat and refused to do business with shops that were part of an association or displayed an association emblem on their shop.

 

Some associations were able to put the spotlight on labor rates, and the rates went up slightly in the local area. However, parts discounts to insurers got out of hand, and despite the increased labor rates, shops lost money on parts and many began to go bankrupt. It is also assumed that those same shops were not run well financially to begin with and the parts discounts were the “last straw.” It was also difficult, if not impossible, to recover costs for paint and supplies.

 

Despite the bankruptcies, more shops opened up. To compete with the established shops, they not only offered parts discounts, but also kept the labor rate artificially low. Things got bad---and then got worse for many. According to the veteran shop owner writing the 1969 article, to stay in business, he borrowed $50,000 to stay afloat, not knowing how he would pay it back.

 

From 1964—1969, trade associations became stronger and insurance companies began to accept and even work with the associations to make the industry better. But things did not get better for all shop owners. Many were poor businessmen and could not control their own businesses or finances. Technicians left for better working conditions. Owners suffered.

 

Despite the best efforts of emerging industry leaders and organizations, another hallmark of the industry in the 1960s was an undercurrent of unrest. It seems owning a body shop during this period was politically tough. The shops fought with the OEs, insurance companies and one another. They had what seemed like a multitude of small local auto body associations that didn’t always work together. Shop owners were looking for answers. The business, as it was in the 1960s, was simply not sustainable.

 

In the post-WWII economic boom, car sales skyrocketed---as did the number of collision and mechanical shops to serve them. This created a lot of competition between shops, which spawned a rather odd phenomenon---the super-cheap service.


 

On the collision side, it was the $29.95 paint job. The concept undoubtedly attracted some work to the shop, but many shop owners thought that the concept was illegitimate and gave consumers a poor impression of the industry. Harry Wright, president of the IGOA, railed against those shops, both mechanical and collision. He purported that shops were promising ridiculously inexpensive jobs, only to either turn around and charge the customer two to three times as much or do virtually nothing for the cheap, agreed-upon price. He noted that garages that continue this practice continue to “denigrate the automotive repair business and put the industry in a negative light.” The IGOA and other associations continued to fight this wherever and whenever possible.

 

The 1960s also saw the increasing involvement of insurance companies, spawning another trend that continues today to a certain degree---the shop owner who “has had enough” and gotten out of the business. Stories like this one started to pop up all over the collision trade magazines: “After running a three-man body shop for over 25 years, Linwood King of Raleigh, North Carolina was tired of the insurance companies harassing him for parts discounts, asking him to lower his labor rate, asking him to cut corners and driving customers from his shop. Rather than fight anymore, King stopped doing body work as his main source of business and stopped dealing with insurance companies. Instead, he turned to mostly mechanical work with some small body jobs on the side---small enough that they were customer-pay and did not involve an insurance company. All work was done for cash, on a take-it-or-leave-it basis.” Most had a similar story--- it was tough to get started at first. But after things evened out, the shop typically had a smaller volume of business but made more money with less stress, and the owner could sleep at night.

 

Throughout the ‘60s, industry leaders called for shop owners to clean up their businesses and make them more pleasant and aesthetically pleasing to customers, as well as workers. Many owners stepped up and modernized their shops, bringing them out of the ‘60s and onto the edge of the 1970s.

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