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Thursday, 12 July 2018 16:39

In Reverse: The 1940s – Part 2 – New Products, Higher Speeds

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True body shops began to emerge after the war. Some shops began specializing in low-priced to medium-priced paint jobs and started attracting a lot of business---so much so that in some shops, two painters worked on the same car at the same time to increase the shop’s volume. A mid-priced paint job in the mid-1940s was $49.95. Materials cost $8, and two painters working together could prep, paint and finish eight cars per day, or one each working hour.


In 1947, the Equipment and Tool Institute (ETI) was founded as a nonprofit automotive industry trade group to help promote the proper use and upgrade of tools used in the automotive repair trade. The first PBE-only jobbers began to appear to service the burgeoning collision repair business.  Prior to this time, the collision repair trade had been served by jobbers who typically served the mechanical repair market as a primary customer. 


During the war, American citizens had to observe 35 MPH as the “Victory Speed” to save gasoline for the war effort. After the war, the “Victory Speed” was no longer in force, and people “drove with wild abandon” across America. It became a free-for-all on America’s highways, and nobody knew this better than Mecherle. In 1944, during the height of the war, State Farm processed 293,045 loss claims for auto insurance. In 1946, State Farm processed 648,609 claims! State Farm had to immediately hire more help and more office space. But it wasn’t easy. The war effort had called 951 State Farm employees to service, many of them key managers and trainers. It took until the end of 1948 to “right the ship” and bring things back to normal---but it would be a new “normal.” In the prior two years, State Farm had seen some of the worst losses ever, draining 40 percent of the reserve funds used to pay claims. For a few months in 1946, State Farm was hemorrhaging money at the rate of $1 million per month! Moving forward, the cost of claims had to be mitigated---but how?

 

Soon, a plan developed. State Farm would no longer insure a car more than 8 years old. They would no longer insure anyone under 21 (unless the family already had a SF policy), nor would they insure anyone over 70 years of age. State Farm also took a different tact in their advertising. To educate consumers about the huge cost of claim losses, starting in 1946, State Farm’s message was to drive carefully, reduce speed and avoid accidents. They said that State Farm auto insurance was one of the best bargains available, but it would only stay that way if the accident rate stopped rising. The company began cooperating with the National Safety Council and International Association of Police Chiefs in running safety campaigns.


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