John Yoswick is a freelance automotive writer based in Portland, Oregon, who has been writing about the collision industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com).
He can be contacted at firstname.lastname@example.org
Owning a collision repair business shouldn’t just be a way to provide yourself with a job. It also should be an investment—with the “dividends” of a paycheck or other benefits as you go, but with the real pay-off at the end: When you “cash out” by selling the business, whether that’s to a family member, an industry consolidator, a trusted employee or other investor.
CCC Information Services continued to come under a barrage of criticism at the most recent Collision Industry Conference (CIC) for a change the company has made its Pathways estimating system.
In the last 12 months, approximately 21,500 collision repair technicians—about one in every 9 currently working in shops—left the trade. That doesn’t mean they left to go to work for another shop; that means they are no longer turning wrenches.
About 100 women representing collision repair shops, insurance companies and industry vendors gathered in Dallas, Texas, in mid-March for a 2-day Women’s Industry Network (WIN) conference that included presentations on topics ranging from conflict management to networking, employee recruiting and process improvement.
Having spent decades as a technician, claims adjuster, shop owner, I-CAR volunteer, jobber, industry trainer and consultant, Hank Nunn has a unique perspective on changes in shop management and measurement.
If there’s anything positive about an economic downturn like the country is experiencing right now, it could be that for the business owner, it certainly focuses the mind. Extraneous (even if valuable) activities often get set aside as such core fundamentals as getting work to the door take precedent.
With the election and economy first and foremost on many people’s minds this fall and winter, it’s almost hard to remember how many other topics and news items the industry talked about this past year: Changes in some insurer’s repair policies. Changes in some shops’ relationships with insurers. Changes in the leadership of some associations. Changes in gas prices and consumer driving patterns. Changes brought about by laws and lawsuits.
Here is an annual review of the past year’s news as viewed through a collection of some of the most memorable, important, interesting or enlightening quotes heard around the industry during 2008.
“We have heard how complex we have made it to do business with I-CAR. We have to go after that with a vengeance.”
– I-CAR CEO John Edelen, speaking at the organization’s annual meeting in July, about the training organization’s internal restructuring following several significant financial losses.
“I believe this isn’t going to be popular, but my opinion is that it is our business and I don’t think we should be dictated to as to how we should operate.”
– Michael Lloyd of California Casualty, when asked if an insurer’s decisions about which shops are selected or removed from its DRP in any market should be made by a “board of independent individuals that cannot have a close enough relationship with a shop to gain any …gratuity.”
“They’re not opening their arms and saying welcome to the fold. It still takes some effort.”
– Bruce Halcro, a shop owner in Helena, Montana, and president of the Montana Collision Repair Specialists, saying insurers are, if only reluctantly, abiding by a 3-year-old law that the association backed which requires any shop meeting the requirements of a direct repair program to be allowed to participate.
“We’re going to see the current model for quite a while. Entrepreneurs owning one, two, three, six or eight shops will continue to dominate this business. Multi-state, 100-shop networks? Hard to do.”
– Brian Sullivan, editor of the weekly “Auto Insurance Report,” saying he no longer believes as he did a decade ago that the collision repair industry
– Crystal Abele, assistant manager of Collision Repair Specialists in El Cajon, California, speaking about State Farm’s required use of an electronic parts ordering program for its Select Service shops in some markets.
“I see this an inevitable part of progress. And I do believe at some point it will work. (And) when it comes to the extra time it takes to deal with aftermarket parts, and the reduced quality of repairs with aftermarket parts, a little bit of extra time dealing with an (OEM) parts system so that State Farm can get their discount is something I’m willing to put up with.”
– Brian Orr, second-generation owner of Jack Orr’s Autobody in La Mesa, California, also speaking about the State Farm parts ordering program.
“We believe now is the time to address this issue for the long run. We are encouraging other states to pursue this type of legislation.”
– Bob Redding, national lobbyist for the Automotive Service Association (ASA), following the U.S. Supreme Court’s decision in February not to hear Allstate’s appeal of a Texas law banning insurers from owning collision repair shops.
“We believe this bill represents a substantial threat to the way in which we currently do business.”
– from an unsigned letter that California-based Mercury Insurance sent last March to shops in that state, urging them to contact state lawmakers to oppose an anti-steering bill that was eventually amended to only require the formation of a task force to look into issues arising from possible changes to existing California anti-steering laws.
“The consumer may be under the impression that he or she has no real choice. We want to make clear: Your car, your choice.”
– Connecticut Attorney General Richard Blumenthal, voicing support for a proposed anti-steering regulation in that state.
“It’s outrageous that legislation is necessary to protect consumers from their own insurance companies, but that is exactly the problem that this bill addresses.”
– California Sen. Carole Migden of San Francisco on proposed legislation in that state that, had it not lost by one vote, would have prohibited insurers from requiring the use of non-OEM parts on vehicles three years old or newer.
“(Although) we strongly believe that reducing refinish times on a more widespread basis is an acceptable practice and reflects operations that allow the shop to restore the vehicle to its pre-loss condition, the decision to limit the use of partial refinish was made in large part to improve our working relationships with shops, and thereby improve the customer’s experience.”
– Chris Andreoli, corporate physical damage process manager for Progressive, announcing last May the insurer’s revised stance on partial paint / full clear.
“We are committed to strengthening Allstate’s relationship with the collision repair industry. Bringing strong leaders such as Dan into our organization will allow us to accomplish that goal much faster.”
– Bill Daly, Allstate auto claim assistant vice president, in announcing that former SCRS executive director Dan Risley had accepted a position with the insurer.
“In other words, you choose to pay, so end of game. The judge felt she had absolutely no decision but to dismiss the case.”
– New York shop owner Greg Coccaro explaining that the dismissal of Progressive fraud lawsuit against his shop was based in part on Progressive’s failure to indicate on its payment to the shop that it was “paying in protest, with all rights reserved,” on the $34,000 repair job that led to the lawsuit.
“As a result of this review, we have determined that this repair method is less feasible on newer model vehicles which incorporate special or alternative metals.”
– Mike Poulard, State Farm estimatics section manager, in a June letter to Illinois shop owner Pam Pierson saying the insurer will no longer include a full rear-body sectioning procedures (or “clips”) on State Farm-prepared estimates.
“Furthermore, only when a collision repair facility is confident that a full-body section is the appropriate repair, has the proper training and equipment to facilitate a quality repair, and has the approval of the customer or claimant for such repair, will the adjuster authorize it.”
– from an Allstate announcement in September saying that, like State Farm, it will no longer specify full-body sectioning (or “clips”) on its estimates.
“They will promise you the world in order to persuade you to go to one of their direct repair or network shops. Don’t be steered wrong.”
– wording in an newspaper ad jointly sponsored by a handful of shops in Temple, Texas, many of whom dropped out of State Farm’s “Select Service” program this past summer.
“Progressive and Nationwide definitely got the most hands. He said, ‘Maybe I need to be looking at those companies a little harder.’”
– Georgia shop owner Steve Peek, speaking about an association meeting with Georgia Insurance Commissioner John Oxendine at which Oxendine asked those in attendance to raise their hands to indicate with which of the insurers that he named one-by-one they are having problems.
“If everyone in our industry would utilize these charts…Wow, what a difference we could see.”
– Mike Anderson of Wagonwork Collision Centers in Alexandria, Virginia, and a member of the ASA Collision Division Operations Committee, speaking of the association’s two “not-included operations” charts designed to assist collision repair shops in writing complete estimates.
“This transaction will be a transforming event for the insurance claims and collision repair industries. Our customers are under increasing pressure to achieve new levels of efficiency and customer satisfaction, which requires their service providers to offer new and enhanced products, services and solutions. CCC-Mitchell will be positioned to meet these needs as we bring together our two talented teams to create greater value for our customers and business partners through increased innovation and network connectivity.”
– Githesh Ramamurthy, chairman and CEO of CCC Information Services, in announcing last April its intent to merger with Mitchell International.
“There is no doubt that this merger would reduce competition that benefits auto insurers and autobody shops and ultimately would lead to higher prices and less innovation for consumers.”
– David Wales, acting bureau of competition director for the Federal Trade Commission, announcing in late November that it had filed suit to block the CCC-Mitchell merger.
“While we are disappointed and disagree with the FTC’s position, we intend to vigorously challenge the FTC in court.”
– CCC’s Ramamurthy, responding to the FTC suit.
More insurance companies appear to be gravitating toward the idea of reducing supplements by enabling more complete disassembly of a vehicle prior to completing an initial estimate, according to a Collision Industry Conference (CIC) committee.