It seems as if many in the collision industry are sitting back, waiting for a magic formula that will produce a more profitable collision industry, free of problems. You are wrong! Change needs to start with each and every shop. A bunch of cheerleaders on the sidelines simply will not effect change. As scary as it is, shop owners need to lay it on the line.
Right now, I have a bull’s eye on my back for standing up for myself. I’m willing to say what many others are thinking. But I’m not really a crusader – just a businessman with enough common sense to realize what must be done to run a profitable business.
A few good men – and women – are willing to stand on the front lines, but where are the rest of you. There are over 53,000 body shops in the United States. There is strength in numbers. In spite of difficulties with the insurance companies, the real problem lies with the body shop owners themselves. When shops are willing to repair a vehicle for no profit at all, it affects everyone’s ability to do business profitably. Worse yet, those who cut corners to make a buck are just as wrong.
Insurance companies do business by the numbers, and I respect that. They have, by and large, been responsive to any problem arising in my shop. But go against those numbers and see how fast the insurers come down on you. Have any of you ever built a total and had the insurance company look the other way? Quite the opposite is true. They want to set up a meeting with you immediately and make sure it never happens again. Insurers have no problem chewing us out if something we do results in a loss for them.
Would you ever think of calling up an insurer and chewing out the company about something that you took a loss on? Absolutely not! We wouldn’t think of it, but we accept this as their normal business practice. We don’t seem to find this treatment unprofessional but simply a frugal fiscal practice.
Again, I see the shops as the real problem. If you hit someone’s vehicle and request a repair quote so you can pay out of your pocket, would you want them to arbitrarily look for the highest priced shop? Of course not. When we are paying the bills, we see things from a different perspective. You might be tempted to accept the cheapest repair estimate as long as your liability to them was satisfied.
The insurer’s job is to mitigate the loss and keep costs down for the consumer – its customer. If the claimant is uninformed and willing to accept less, this is not innately the insurer’s fault. It may seem a little deceptive but if the claimant indemnifies them of their liability then no crime has been committed. If shops are willing to agree to almost anything to get more cars, whose fault is it?
As I’ve said many times before, it is imperative to evaluate your business practices before time runs out. The time for action is now. For example, paint costs have been illegally capped for years. The Department of Insurance has backed up the repairers in declaring this practice to be illegal. But shops need to stand up for their rights by demanding that insurance companies operate within the law. Shop owners have offered up too many freebees and need to get back to charging reasonable rates for the quality work they do. Lawnmower mechanics charge more per hour than most body shops.
By and large, consumers are uneducated as to their relationships with their insurers, since most rarely have to interact with them, and when they do, they are vulnerable and trusting. A national consumer education program (a la “Got Milk”) would help clarify the true relationship between insurer and insured. Insurer’s must answer to stockholders and the bottom line is their primary concern. Insurance companies are acting like the businesses they are – and I, for one, respect them for that.
So don’t look to the insurance companies to change their ways to help the shops. Shops have to act like responsible businesses and set their own policies. Nothing will change in this fragmented industry until each of you decide to do something.
It amazes me how much money is given away in labor rates and other concessions, but how little we are willing to spend to fix the problem. Alan Wood from the CRA told me that when the association first began, a presentation to over one hundred shops at one time brought very little commitment in the form of the nominal membership dues of $100 per month to help change the future of our industry.
I believe the year-old CRA will be able to accomplish what no one else can. The CRA has a solid voice inside Sacramento with Richard Steffen, who worked on ex-Senator Jackie Speier’s staff and is well versed in how to accomplish our agenda in Sacramento. Senator Jackie Speier was the only friend our industry has ever had in Sacramento and we can’t allow ourselves to lose this foothold.
Also former CAA president and shop owner Kelly McCarty is running for assembly. Whether or not she is in your district, supporting her will help benefit us all. Contact your chapter of the CAA, join the CRA, send in your dues and support these two associations. You may not agree with everything they do or how they do it but there is credibility with these two groups.
Making a stand is never easy. If it were, everyone would be doing it. I’m sure it wasn’t easy when David, a little shepherd boy stood against the giant, Goliath. We all know the story. David came back with Goliath’s head, but I’m sure when he walked out to meet Goliath with only a sling and 5 smooth stones that everyone cheering from the side lines thought he was doomed. I wonder how they felt when he was victorious; I bet many of them wished they had stood up to Goliath.
The time to get involved is upon us. What are you going to do for yourself and your shop – cheer from the sidelines or stand up and help your industry? The choice is yours!
In business for 26 years, Lee Amaradio, Jr. is the president and owner of “Faith” Quality Auto Body Inc. in Murrieta, California. With 65 employees, he attributes his success to surrounding himself with good help, claiming to have some of the best office staff and techs in our industry. Amaradio has been in this industry long enough to see the handwriting on the wall. He feels that now is the time for us to unite as an industry before it’s to late. He can be reached by e-mail at email@example.com.