Tuesday, 01 May 2012 16:25

Standards Program in the UK Offers Lessons for the U.S.

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As the discussion of how and whether the industry should develop some sort of formalized collision repair standards continues, Paul Gange brings a somewhat unique perspective on the topic.

Gange is the president and chief operating officer of Fix Auto USA, which has 48 franchise locations in four U.S. states, as well as 151 shops around the country using the company’s services as part of a more loosely-knit “network.”

But Fix Auto also has a similar organization in the United Kingdom, with 68 franchises in a market that has implemented a repair standards program that is most often mentioned as a potential model for one in the United States.

Speaking recently on the Collision Repair Executive Webcast (CREW), Gange shared some of the perspectives on standards he’s learned through observing the U.K. market and speaking with shops there.

He predicated his remarks by saying that Fix Auto USA is committed to repair standards, ensuring that all of its franchises here, for example, maintain the I-CAR Gold Class designation of ongoing training, and use a third-party, VeriFacts Automotive, to help ensure repairs are being done correctly.

“Fix Auto is committed to repair standards that are universally adhered to and which ensure vehicles are returned to the road safely,” Gange said.

That said, he offered the following prescriptions and warnings for those involved in the standards effort here.

Discussion of standards can easily lead to multiple “standards.”

Gange said the standards effort in the U.K. began in the 1970s along with the shift to unibody vehicles. One industry organization developed a standards program, which about 2,700 U.K. shops implemented over a four-year period. But 300 other shops balked at that standard, and created and implemented a different set of standards. Eventually there were at least three such programs, and shops found themselves being required by different insurers to implement multiple standards, just as U.S. shops often have multiple estimating systems to meet different insurer requirements.

“This was, at the very basis, a bit of a mess,” Gange said.

Some say the U.S. market is going down a similar road, with an increasing number of shop certification programs by the automakers and third-party certification programs, such as one being launched by the Assured Performance Network. (See Autobody News.com or April issue for more on this.)

Create a system that is free from bias. While the industry in the U.K. has shifted in recent years toward a single standard, Gange said there’s some question as to whether that program treats all repairers equally.

As an example, Gange said that most shops are subject twice a year to unannounced assessments of their compliance with the standards.

“These are arduous assessments,” he said. “They are very, very detailed. And if you fail that assessment, you lose your certification.”

But Gange said one mobile repairer organization in the U.K., which focuses on light hits and bumper repairs, faces such assessments at only a subset of their “locations,” which are essentially vans, rather than at all locations like most other repairers. That reduces their costs of compliance, Gange said, which some traditional repairers view as unfair.

In addition to that type of situation, Gange said he would like to see the U.S. also avoid a standards system that isn’t open to anyone willing and able to comply. Automaker shop certification programs, for example, generally require an independent shop to have a relationship with a dealer, which may make such a program open to one shop but not to another, equally-qualified shop.

“Repairers wiling and capable of investing, if that’s required, or adhering to standard specifications and doing the work that’s it’s going to take to ensure that they can repair vehicles properly should have a right to repair that vehicle,” Gange said. “I would not want there to be a standard that excludes a shop that wanted to adhere to the standard but perhaps wasn’t able to participate because it didn’t have the endorsement of another organization.”

Don’t underestimate the cost of standards. Gange said that while the standards program in the U.K., is “at its essence positive, it’s riddled with bureaucracy, and along with bureaucracy comes costs.” Gange said that shops in the U.K. feel they bear the burden of these costs, including a $30,000 to $80,000 initial implementation fee, along with the equivalent of just under $8,000 a year in annual training. Much of that training is provided through Thatcham, an insurer-funded research and training organization in the U.K.

Gange said the industry here may want to ensure there are multiple organizations helping implement any standards program.

“I think what we would want to have in this regard is a healthy marketplace for those that do the training and the assessments and the initial implementation,” Gange said. “That will help keep the prices down.”

Gange was asked if the standards program in the U.K. has led to increases in repair costs and total losses there.

“At some point you have to expect that when you’re spending $30,000 to $80,000 to implement a standard, and another $7,000 to $9,000 a year to maintain a standard, those costs have to come out somewhere,” Gange said. “And I think its fair to say they have come out in the cost of repairs ultimately with an increase in total losses.”

There needs to be recognition of the standards by insurers and consumers. Gange said the U.K. standards program uses the “Kitemark” brand for shops meeting the standards; similar to the “Good Housekeeping” seal here, Kitemark is a well-recognized symbol among UK. consumers.

Without recognition by insurers and consumers of the value of choosing a certified shop, Gange said, shops not meeting the standard will use their lower costs to market lower prices – generally for a lower-quality or even unsafe repair.

John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at jyoswick@SpiritOne.com.


Other Voices on Standards
Several other industry participants offered their view of the industry standards development process during a recent Collision Repair Executive Webcast (CREW).

Mike Quinn, who co-chairs a Repair Standards Advisory Committee working on the issue, said crash testing of a vehicle repaired using methods considered safe just a decade ago showed that if used today, such methods would compromise the safety of passengers in a subsequent crash.

“The results were disastrous, and if we don’t think we’re under a microscope by litigious attorneys or governmental agencies, we’re kidding ourselves,” Quinn said. “The ostrich approach has not worked for our industry. The consumer expects and should have comfort that cars are being safely repaired to a standard so their family is safe in that repaired automobile. We have to move forward.”

Denise Caspersen of the manager of the Automotive Service Association (ASA) Collision Division, agreed that standards could improve shop consistency and efficiency, as well as repair quality, customer satisfaction and the industry’s professionalism. But, she said, ASA members have expressed concerns about whether a standards program would be open to shops of all sizes, whether it would be recognized by consumers, and whether it would offer a return on investment for shops or rather just add another cost for shops.

Steve Nantau of Ford Motor Company agreed that in order to be successful, a standards program would have be recognized as valuable by consumers and insurers. He believes if the industry doesn’t develop a single, recognized program, even more automakers and other groups will implement their own such program, none of which will end up with enough “traction” for widespread recognition.



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