Friday, 04 March 2016 22:51

Calif. Veteran Body Shop Owner Returns to Serve CAA Again

Calif. Veteran Body Shop Owner Returns to Serve CAA Again

Piper said he has lived the dream by being able to work with his two sons, Matt (left) and Jason (right) and building a successful business over 38 years.

 

Adam Piper is a 45-year veteran of the collision repair industry and a former body shop owner who established several successful shops called FCC Collision Centers in the Silicon Valley starting in the late '70s.

Since selling his locations to Caliber Collision in 2014, Piper has worked for the MSO as a liaison between the company and car dealerships in the South Bay. Recently, Piper, who has been on the California Autobody Association's Board for over 30 years, agreed to be the President of the organization's Santa Clara Chapter for an unprecedented seventh time.

Q: How did you initially get into collision repair?
A: I came out of the military in 1971 with a wife, two young sons and no job. My father-in-law was the body shop manager at a Ford dealership in Monterey, CA and he asked me if I wanted to give auto body a try. I said yes and thank you very much. He handed me some tools and told me that the pay was strictly commission. There wasn't any I-CAR back then, so everything was OJT (on-job-training). Within three years, I was the highest paid, but not necessarily the best body man in the entire area. I did that for seven years and then I decided this was wearing me out--I was pretty burnt out, producing 100 hours a week, and needed a change!

So, I started looking around in 1978 for a business opportunity and I found a body shop in Mountain View, CA that was for sale. The owner really didn't want the shop, because he got it due to a bad debt. He wanted $75,000 for it, but he dropped it down to $50,000 with terms, so I took it. Three days later my RV was parked in the backyard and I was the manager until escrow closed and my years as an owner had begun.

Initially, the shop had five employees and was grossing around $50,000 per month. At the time I had no experience writing estimates or managing anything other than myself, so there was a lot of OJT taking place. I expanded my operation into two shops with 50 employees grossing over $5 million annually. I owned the business for almost 20 years until I sold it to M2 Collision Centers in 1997.

After that, I took a break from the industry until I, along with my two sons Matt and Jason (then 36 and 35 years old), got both of my former shops back at auction in 2005. We opened two more shops (2012 and 2014) in the South Bay area. At the time we sold to Caliber Collision, in 2014, we were on track to produce $13 million in revenue for the year.

Q: Looking back, has it been a good thing?
A: Oh yes--I'm was really living the dream working with my sons. Both of my sons are very accomplished, intelligent and hard-working.There are always ups and downs when working with family, but overall, it has been a wonderful experience. Making money is important but being able to work with Matt and Jason has been even more special. Matt is now 44 and he has been able to take some time away from the day-to-day working world to pursue many of his dreams. Jason at 43, chose to stay on with Caliber as a Business Development Manager (Acquisitions and Development) for the first year and now is working with many of his old teammates as a regional manager in the Silicon Valley market.

Q: As someone who has seen this industry change in so many ways, what are some of the challenges that body shops are facing now?
A: Well, everyone knows that finding good people is the #1 problem in this industry right now, at least in the Bay Area. The challenge of retaining top employees was getting intense, because other shops were constantly trying to hire them away. This problem has gotten worse, because there are enough experienced techs out there to fill the void. At some shops, it's like a revolving door where they hire and fire people all the time. It does not help the fact that we also are in one of the most expensive places to live in the country. Even a body/paint technician making $100,000 a year finds it difficult to live in the Bay Area, so that makes it even tougher to find and retain top people.

Q: At your peak, you were employing more than 75 people, so how did you retain them and keep them happy?
A: Luckily, we were very hands-on owners and involved in making sure that our people were doing things the way we wanted them to be done. We worked closely with them, let them know that we valued their work and we had a full benefit package. Other shops were calling them all the time and trying to recruit them but we tried to include our employees in as part of the family and showed them our appreciation with friendship as well as compensation. For our industry today, my top concerns are finding and retaining good employees. The crazy labor laws in California don't make that any easier either.

Q: In California today, most body shops are between 80%-100% fueled by DRPs, but when you started in the 1970s, they weren't yet prevalent, correct?
A: There were almost no DRP programs back then. When I originally sold in 1997, there were really only three significant DRPs out there—Farmers, USAA, Allstate and they were not getting that much work into the DRP shops at that time. I only had Farmers at the time when I sold. When I re-entered the business in 2005, I realized that if you didn't have at least two or more DRPs, you were probably in trouble. Without them, you couldn't have enough cars in your shop to stay consistent and survive.

DRPs are an integral part of the business today and the Bay Area is a good example of that. I would bet that any shop in this area that is doing well is almost completely supported by DRPs. It's the model that seems to work the best in California and I don't see it changing any time soon. The biggest obstacle now with the DRPs is all of the administrative work the shops now have to do. It was the insurance company's responsibility before, but over the last decade, it shifted to the shops. So, now you need more front office personnel to deal with all of the paperwork.

Q: From what we've heard from shop owners statewide, the cost of real estate is also a concern for body shops in California?
A: Definitely. The prices are very robust around the Bay Area. For example, one of the properties that I purchased in Mountain View in 1987 for $1.2 million is now worth over $6 million. It's going to be tough for body shop owners because they're not going to be able to afford the increasing rents. Back in the 1990s when the real estate in the Bay Area started to go up in price, some people were thinking about setting up "feeder locations" in towns 50-100 miles away from their Bay Area locations, because the property values were so much lower. That way, they figured they could afford the rent in those smaller cities, but in the end it would not work, because today the insurance companies are so focused on cycle times and efficiency. Also, the cost to transport the vehicles back and forth would add up.

The life I was able to build in the auto body industry has had its challenges but overall it has been great. I have met many amazing shop owners, staff and vendors through the years and I hope to be of help to this industry for many years to come.

Q: You're now back leading the Santa Clara Chapter of the CAA?
A: Yes, I joined the CAA and started going to the local meetings around 1983. Being an active member over the years has helped me network with the local shops, learn what each of us were dealing with and develop relationships that have gone well beyond the other guy just being my competitor. The state meetings became an added bonus as I was able to do all the same things and learn what legislation was being pushed that would have an effect on me and the auto body industry. California is a very proactive state and tries to enact a huge amount of bills that at not business friendly.  If it was not for the CAA and other groups reading and understanding the ramifications of the bills before enactment, well....I wouldn't want to think how much tougher it would have been.

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