Monday, 06 July 2009 17:39

Causey --- Strength in Numbers—Tying the Sticks Together

Written by Mike Causey
Consider the following Aesop’s Fable: A farmer was able to unite his bickering family despite their individual differences.  After trying in vain to reconcile his family by talking to them, he thought of an example that might work.
    The farmer called his sons together and asked them to gather a stack of sticks and bring them to him. Then he tied the sticks into one big bundle, and told the boys, one after another, to take up the bundle of sticks and break it. His sons all tried in vain to break the sticks.

    Then the farmer untied the bundle and gave his sons the sticks, one by one, and asked them to break the sticks, which they did with ease. “Thus, my sons, as long as you remain united you are a match for all your enemies, but differ and separate and you are undone,” he said.

Body Shops Bundling Together

We are “undone” as an industry, fragmented and divided, because we differ and are “doing our own thing.” Body shop owners have been “independent,” like individual sticks, and have chosen to “go it alone” against the powerful and united insurance industry.  Most body shops and auto glass shops continue to operate as “individual sticks.” As such, many are easily broken.

Insurer Control

Insurers now enjoy control over the collision repair process. Insurer “Preferred Shops” prevail. Direct Repair Programs (DRPs) are getting bigger and stronger. Many insurers are now successfully steering most of their vehicle damage claims through DRPs to “Preferred Shops.”
    More vehicles are being “totaled” than ever before. “Total Loss Vehicles” represent a significant loss of work for body shops. Most state regulations specify that vehicles be declared a total loss when damage meets or exceeds 75% of the vehicle’s value. In reality, however, some insurers “total” a vehicle when the damage exceeds 50–60%.
    Obviously, low profits and insurer steering have forced thousands of owners to close up shop in recent years. Census reports show that, over the past 10 years, the number of body shops in the United States has dropped dramatically.     
    Experts predict that over the next five years nearly half the body shops now in business will shut their doors or be taken over by a larger facility. Unless shop owners and managers make a courageous effort to unite and confront the insurers when they don’t play by the rules, many more shops will soon be out of business
   

‘Customer Rights’ and ‘Consumer Safety’  

While some shop owners advise customers of their rights, most fail to share this information. As a result, they fail to protect themselves and their customers against insurance companies that count on the public’s lack of knowledge.
    We can promote safe customer repairs by pointing to specific language in automobile insurance policies.
    For example, every physical damage policy issued includes wording that can be used to a claimant’s advantage.  When it comes to safe repairs, this language regarding “generic parts” (which you’ll find in most states’ policies) is key: These parts are required to be at least equal in terms of fit, quality, performance and warranty to the original manufacturer parts they replace.”

Strength in Numbers

Imagine the voice we would have if just half of the 40,000 body shops in the United States shops decided to “stand strong” and join together. As an industry, we must organize into a cohesive group to stop the abuses of our business. Abuses like paint caps—that don’t even come close to paying for the necessary material to do a proper job—steering, forced use of certain suppliers and aftermarket crash parts, lowball estimates, low labor rates, etc. These abuses cost body shops many thousands of dollars every year. Joining together for a united voice is the most effective way to stop these abuses.
 

Political and Strategic Alliances

Political involvement is a necessity in today’s collision repair climate. The collision repair industry can become a powerful force by becoming politically involved.
    The future of our industry depends on our building “strategic alliances” with suppliers, technical schools, car manufacturers and others with similar concerns. The common goal being the betterment of our industry, consumer rights and safety in collision repair.
    Insurers are the biggest contributors to political campaigns and legislators at both state and federal levels. They have an army of lobbyists and lawyers looking out for their interests. Who is looking after your interests?
    Insurers know how to work within our system of government. They have developed a fine-tuned machine and well-oiled machine that works well for them. It’s an art form, just like steering and other unfair trade practices.

Powerful Tools

Many consumers aren’t aware that they’re being “steered” by insurers. But shop owners and consumer advocates are painfully aware of it.  We have a special obligation to fight steering as a responsible member of the collision repair community.

    Fortunately, associations have powerful tools at their disposal to make a difference. Consider the following:
    Legislation: We can take our case to the state legislature. Laws need more teeth. It’s time to become politically active and begin lobbying for better legislation. Joining a body shop association is a great place to start. You’re more likely to be heard with a large group calling for action. (Strength in numbers)
    State Agencies: Beyond creating new laws, state government can provide other means to combat steering. For example, the state of Montana ran televised ads featuring the state auditor walking through a body shop and explaining consumers’ rights when choosing a repair facility. (In Montana, the state auditor’s office regulates insurance companies.) The public service announcement informed people of their rights and put insurers on notice that the state was taking an active interest in fighting steering.
    Local action to educate consumers: Change begins at home. There’s no good reason for a customer to leave your shop without knowing his or her rights and the impact of steering on their safety. Most likely, you won’t get a second chance to protect the safety of your customers in this way.  
    Marketing: Promoting your shop and the quality of your services can help you fight steering. Your association can help you with marketing strategy too.

Apathy

Our apathy and concern over sharing information with the shop owner down the street for fear our “secrets” will be stolen has aided and abetted the insurance companies as they methodically took control of our  industry. The question now is, “Do we want our industry back?”  If the answer is yes, then it’s time to “tie the sticks together” and build a bundle that our adversaries can’t break.
    While many complain, very few do anything about the problems. If we hope to survive and prosper as shop owners, we must do something now. We can “take a stand” right from our own backyard by being part of a local, state or national collision repair association.
    The time for mincing words has long passed. Shop owners have been backed into a corner. The public needs to know the truth and so do our lawmakers. The safety of our customers and the motoring public is at stake along with survival of our business.
    By “Coming together” for the common good and building upon our “Strength in numbers” you can help tie the sticks together.

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