We sat down recently with David McClune, the executive director who has served the organization for the past 14 years, to discuss the state of the organization and its role in the California collision industry.
Q: Tell us a little bit about the origins and history of CAA.
DM: CAA was formed back in late 1966, when several body shop owners in southern California formed chapters the state organization and it just grew from there. Before I became the executive director in 2000, the organization was run by a management company. CAA has evolved with the industry, basically. I think we’ve done a very admirable job on staying abreast of all the changes in collision industry and continually strive to provide the best services and advocacy we can offer.
Q: How has the industry changed since you took over leadership of CAA?
DM: The way some insurers have changed their way of doing business with many of the shops and the emergence of more and more multiple shop operations (MSOs) are probably the most significant changes in the industry since I started this job. Direct repair programs (DRPs) are much more prevalent now, and that’s changed the business in many ways as well. The MSO system is going to increase and we’re going to see larger MSOs gobbling up smaller MSOs as they try to strengthen themselves in different regions of the state. But, I don’t think that will cause the demise of the independent shops because they will always have a role and, if they do a good job, they will continue to flourish. In the end, if you do good work, you will still get customers and insurance companies will want to work with the leading operators every time, regardless of whether they’re an MSO or an independent with one location. The shops that run efficient businesses and continue to market themselves in their area while taking good care of their customers—those shops will stay strong.
Q: Do you think MSOs have an advantage over the smaller independent shops?
DM: The insurance companies are more and more discerning nowadays when they’re looking for shops to work with, and they are always searching for the best business practices out there when making their decisions, and that will never change. So, it does not mean that they will always opt for an MSO. If an independent is doing good repairs and has a strong track record, they will get DRPs, because it’s all about the quality in any business and the insurers want to work with shops that can perform, regardless of their size.
Q: Many shops couldn’t make it through the economic collapse of 2008 and I imagine you lost a few members as a result?
DM: It has been a tough time and all kinds of businesses have had to make changes after 2008. Competition gets more intense when there is less of the pie out there, so body shops have had to step up in some areas, like marketing and efficiency, for example. It’s adapt or survive, but, in the end, the consumer benefits because things such as customer service and professionalism have improved significantly within the last seven years in the collision industry. The main thing I heard more from body shops during that rocky period was that they had to increase their efficiencies and do more work with less people. But, that made them better businesses in the end. Many of them told me that if they had run their businesses this same way 10 years ago, they could have retired by now.
Q: What are some of the bigger things CAA has achieved since you took over in 2000?
DM: Back when I started, we played a major role in devising the body shop complaint form because, until then, body shops had no real way to complain to the Department of Insurance. Now both consumers and body shops can file complaints, so that was a big deal. A few years after that, we introduced a bill that said insurers could not own body shops. Even though that bill was defeated, it was significant for us because it brought the issue up to the surface. It helped to bring some attention to it and eventually it became a non-issue because, in the end, we believe that insurance companies don’t really want to be in the collision repair business.
Q: Some CAA chapters seem to thrive while others struggle to exist. What do you think are the reasons for this?
DM: In any trade organization, you’re going to have some chapters that are more active than others. We sit down with the chapters that are struggling and look for different ways to strengthen them. At our board meetings, all of the chapters submit reports showing what’s worked and what hasn’t, and that helps all of the chapters. If you look back at our history, you’ll see that certain chapters have spiked in membership and participation and then they go back down, for a wide range of reasons. It’s usually based on leadership and also sometimes attached to what’s going on in that part of the state. Leading members drop out because they retire, for example, and if those people aren’t replaced, the chapter is impacted. If this happens, we do everything we can to bring the chapter back and, in some cases, it’s worked well.