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Tuesday, 04 December 2018 22:42

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

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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.


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