Friday, 25 June 2010 17:44

Pasadena CAA Chapter Meeting Hears ‘A Perfect Storm’ Presentation from Dale Delmege, Members Talk about Sting

The June 16th Pasadena CAA chapter meeting at the usual location, Brookside Country Club, was presided over by Linda Holcomb in the absence of President Curt Nixon. Linda reminded the group that July 1st, AQMD Rule 1147 goes into effect that, among other things, stipulates that a spray booth heater must be certified to meet a new 30 ppm requirement. A handout from Rely On Technologies provided specification details for the group.

Past President Nathan Simmons presented a CRA report and urged members to come to a fund-raiser for insurance commissioner candidate Dave Jones. Nathan pointed out that Dave has asserted that he has accepted no money from the insurance industry. (See flyer on p. 4 this issue.)

After dinner, Linda introduced the speaker for the meeting, Dale Delmege, Executive V.P. of Operations for Mitchell until 1994, and a principal with Chelsea Group and D.D. Partners, a marketing and organizational consulting company with clients like Dupont, BASF, LKQ, Carstar and ABRA.

Delmege’s topic, “A Perfect Storm,” had elements that will be included in a June 28th issue of Claims Magazine, under the title: “Watch Out For That Fourth Step.” With more than thirty years in the collision industry, Delmege promised to enlighten the group on what to do about the situation where 40,000 shops in the U.S. are competing for the declining amount of collision repair work that could easily be handled by 8,000 shops.

Delmege’s initial premise was that of those 40,000 shops, less than 25% were really restoring repaired vehicles to a manufacturer’s standard for a pre-accident condition. He said repairs by the majority of shops have hidden repair flaws, defects and omissions, many of which can compromise the safety of the vehicle on the road. He also pointed out that most of those shops are paid the same for faulty work as the shop that does it right. He noted that today’s quality-conscious consumer who demands organic food, asbestos-free products, perfectly safe child car seats and the ultimate in other safe products and services for her children, would not tolerate the hidden flaws in collision repairs if she knew about them. He asserted that a shop that does it right and effectively communicates that difference between his shop and others could command far more business and a fair price for the quality of work delivered.

To reinforce his premise, Delmege noted that he had traveled to the U.K. to see for himself if reported positive changes in the British collision repair industry had really occurred. He concluded that they had, mainly because they are dictated by a new government practice of certifying shops. Those shops are now required to have proper tools, equipment, training for technicians and consistently repaired vehicles to exacting standards. A seal of certification is issued to compliant shops and those that fail to pass regular inspections lose their certification. Insurance companies in the U.K. will no longer grant a DRP to a shop that does not meet these certification standards.

Delmege speculated that a similarly enforced standard in the U.S. would result in a very different approach by insurance companies when establishing their DRP relationships.While recognizing how unlikely it would be for this ideal situation to come about in the U.S. any time soon, Delmege told shop owners at the meeting that they could start now to capitalize on their superior quality. If they can prove to prospective customers that, unlike most of their competition, they repair vehicles correctly with no hidden flaws or defects that might render their vehicle unsafe, Delmege says they could capture far more business. Delmege’s talk received enthusiastic applause and many positive comments from shop owners and managers afterwards.

While the fraud arrests in Orange County were not addressed during the meeting, I spoke to a number of shop owners and managers before and after and asked about the BAR sting operation. Henry Oviedo, Collision Center Manager for Santa Monica Ford, said he hoped other shops would take the steps he has always taken to prevent problems with the BAR. He trains his people carefully in how to deal with customer requests that could lead to fraud and so has never had a problem with the BAR. Jeff Johnson, manager at Marcos Auto Body in South Pasadena said nearly the same thing. Anna Garzzia, owner of Collision Course Auto Body in Reseda said she had had a minor run-in with the BAR over a storage issue. She thought the Orange County sting was politically motivated. Armen Besnelian, owner of Oxnard Collision Center in North Hollywood expressed a similar skepticism. It seemed unlikely that the BAR would have much success trying to sting the kind of shop owner participating in this chapter of the CAA. These people appear to always put quality first.

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