On the last day of 2019, authorities informed the World Health Organization’s (WHO) China office of pneumonia cases in Wuhan City with an unknown cause. A week later, China identified a new coronavirus (COVID-19) as the source of the outbreak and reported its first death. Within a month, multiple countries reported outbreaks; WHO Director-General Tedros Adhanom Ghebreyesus declared a public health emergency of international concern, and the U.S. declared a domestic national emergency.
Fallout from the outbreak then sped up considerably as the international infection and death rate grew. In just the past two weeks, the WHO changed its declaration to a pandemic. In the U.S., many states have shut down schools, ordered bars and restaurants to offer only takeout or delivery services, closed gyms, theaters, sports venues and salons, and limited social gatherings sizes (some to 25-person limits). Businesses, typically retailers, have cut hours or voluntary closed their doors. Americans have panicked, emptying store shelves of food essentials, cleaning products and toilet paper, while unemployment claims have spiked as thousands of workers are locked out of their jobs and millions more worry about their future in a world of quarantines and social distancing.
Such is life in early 2020. With a recent government plan anticipating the pandemic could continue for 18 months, small businesses are bracing themselves for a grim future and the prospect of a severe recession. This includes auto repairers. While the industry is in the early stages of dealing with this crisis, some shops already have taken significant steps protecting their employees, customers and business futures and begun laying out a plan for difficult days ahead.
Impacts on the national level and front lines
The COVID-19 pandemic already has hit the repair industry nationally and regionally in areas likely to have ripple effects, namely education and training. The 17th Annual TST (Technical Service Training) Tech Training Big Event, which offers seminars from some of the best-known trainers in the industry, has been moved from March 21 to August 15. The Automotive Training Expo (ATE) has rescheduled from March 16-18 to July 31-August 2.
“We had a thousand people signed up to come to the show,” says Jeff Lovell, President/Executive Director of Automotive Service Association (ASA) Northwest, which sponsors ATE. Lovell says his organization also has had to cancel seven chapter meetings this month. The postponement and cancellations are the results of restrictions put on group sizes to help prevent the spread of COVID-19.
G. Jerry Truglia, a New York shop owner who also owns Automotive Technician Training Services (ATTS) reports he’s had to cancel all of his training sessions for the same reason (New York doesn’t allow groups of 20 or more in one place at a time, and Truglia notes that shops don’t want to risk having their techs around others). Truglia says other trainers such as NAPA, Carquest and Christian Brothers have done the same.
“The cream of the crop of the industry isn’t able to come out for training,” says Truglia. “These are people who are in search of information to help their businesses, and they’re being cut off from it.”
Along with the flow of information, shop business also is seeing cuts. Truglia, whose Mahopac, New York shop sits 40 miles from New York City, says business is “definitely down.” Further, he’s heard of some shops that have closed down. Lovell says he’s heard from ASA members who are seeing substantially less business, with others being unaffected.
Lovell suspects the dip in work is a combination of customers staying home so as not to risk exposure to the virus and those affected by or worried by financial issues created by the outbreak. He says urban shops could see greater business declines since customers have better access to alternative transportation while suburban businesses could see fewer disruptions, for now, since these customers rely more on their vehicles for travel.
Meanwhile, on the collision repair side, shops haven’t seen any noticeable drop in work. Trace Coccimiglio, owner of Valet Auto Body in Draper Utah, says work typically slows a bit this time of year. However, looking at the highway that runs near his shop, Coccimiglio says he sees far less traffic and believes this will translate into a decline of work in the coming weeks.
Lovell sees a long-term drop in business lasting at least 4-6 month and probably lingering into 2021. Already, he’s witnessed the fallout in other service jobs. Lovell knows of three workers in the hospitality industry who have been furloughed. A hotel ASA Northwest does business with just furloughed six employees. On March 19, Bank of America warned investors that the country was now in a deep recession. The financial giant expects the economy to shrink by 12 percent alone in the second quarter of this year with significant losses in employment and wealth.
That’s very bad news for any small business, especially those in automotive repair where profit margins can be slim and many shops are “hanging on by a string,” according to Truglia. Grim days aren’t simply coming. They’re already here.
Cleaning up the industry
With the health of the industry and its people at risk, the obvious question is: How should repairers respond? Some have started by addressing the virus itself. Truglia regularly visits the Centers for Disease Control and Prevention (CDC) website (https://www.cdc.gov/) for guidance. He prints off CDC recommendations and shares them with staff.
He and his employees also have adopted a policy of using cleaning products to wipe down every handle in the shop – from the coffee pot, to office doors to car door – first thing in the morning and at the end of the day. “Viruses can be on any surface so we take extra precautions like wearing gloves, asking our people to sneeze into their sleeves and disinfect any areas of a vehicle they think may be contaminated,” he says. “In auto repair you come into contact with all kinds of people. You have to keep in mind when handling keys to consider what they may have come into contact with.”
Lovell similarly recommends wiping down steering wheels, shifters and door handles when a vehicle enters a shop and again before it is handed back over to the owner. Coccimiglio has adopted similar cleaning practices. ASA Northwest suggests members stock up on gloves and sanitizers.
This attention to physical health needs to be accompanied by extra work on the financial health of a shop. Since the industry appears to be in the beginning stages of a steep downturn, Truglia recommends looking into state programs to help businesses affected by COVID-19.
On March 16, the national ASA signed on to a letter to the leadership of the U.S. House of Representatives — House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy — requesting COVID-19 disaster relief for small businesses and their employees where the core functions of the business cannot switch to remote operation.
“Most of the time we don’t look toward the government for help but this is unprecedented,” says Lovell.
Truglia and Coccimiglio are looking at ways to cut expenses. Coccimiglio says he’ll put off replacing his paint booths. Should an economic downturn be serious enough, Truglia will use his staff to perform work like painting the shop instead of hiring outside help.
Cutting expenses alone won’t compensate for a serious downturn in business. Lovell and Truglia say shops need to be more proactive. In the current climate, they suggest repairers leverage services, for example towing to and from a shop, to reduce a customer’s risk of exposure. Digital solutions, such as letting customers sign electronically online to authorize a repair, also are attractive. Both men say shops should advertise these efforts, letting customers know they are aware of their concerns with COVID-19 and are ready with solutions to make repairs safer and more convenient and that ensure a vehicle is returned in sanitized condition.
Some shops are taking just such an approach. Yates Service Inc., an Alexandria, Va., company that owns both mechanical and collision repair businesses, just launched Complimentary White Glove Vehicle Pickup & Delivery Service at its locations for customer vehicles needing repairs, maintenance and detailing services. Its collision business also started offering online auto body repair estimating so customers can send damage photos to Yates Collision using mobile device instead of venturing to the shop.
Star Auto Authority started a “Disinfectant Detailing” promotion with the shop offering to do its “part in helping fight the COVID-19” with 20 percent off all detailing services set up made by March 31. The promotion touts the shop’s convenient pickup and delivery services and includes messaging referencing the CDC and noting how detailers wear protective gloves and spend “extra time cleaning all interior surfaces touched by hands.”
Truglia suggests repairers “clean up their act” with clean and sanitized customer waiting areas and restrooms to help qualm fears of customers, especially the elderly, one of the groups most at risk from COVID-19. “Elderly customers are your best customers,” he adds. “They understand their cars and know they need cared for.”
Long-term prognosis
While efforts to meet the COVID-19 outbreak head on are encouraged, so are traditional efforts to remain competitive and run a high-quality operation. Coccimiglio says shops need to follow OEM repair procedures and continue building their brand by working on their online presence and protecting their reputation with good work. “Remember that every customer represents potential future business,” he says. “Don’t take them for granted.”
Lovell says shops should reach out to customers every way they can and offer as many services as they can handle. “Have your service advisors call up customers and let them know you’re looking out for them,” he adds. Further, he says organizations like ASA are important resources for help and mentorship, now and at any other time.
Even with these efforts, a serious or long-term recession could force shops to make difficult decisions, namely letting go of staff if there isn’t enough work to maintain their employment. “We do all we can for our employees, and you always want to treat your employees well, but there is a point where you can go no further without hurting your business,” says Truglia.
Coccimiglio says if an economic downturn is serious enough, his business will have to choose between keeping staff while doing lower volume or letting staff go and rehiring later as the economy rebounds. Letting staff go while hoping to rehire later is a risky prospect with technicians already in short supply.
The likelihood of taking such drastic measures seems to be growing with each passing day as the U.S. struggles to handle an expanding crisis. Healthcare providers say necessary products are in short supply with no relief in sight and warn the U.S. healthcare system is increasingly at risk to be overwhelmed. The stock market continues to be depressed. On March 19, California Gov. Gavin Newsom issued a statewide order for all residents to “stay at home” until further notice amid the coronavirus outbreak. That’s 40 million Americans being asked to park their vehicles and not leave their homes.
While repairers can still conduct business, it’s impossible to perform work when it isn’t being brought to a shop. Since much of the country follows California’s example, repairers nationwide probably can expect to see business to fall off as motorists simply stay home or lose their ability to pay for work.
Still, with the industry’s gloomy prospects, Lovell and Truglia say there’s room for optimism if repairers gain some perspective. Lovell notes that as bad as 2008 was, some shops still fared well since consumers were forced to hold onto older vehicles that would require repairs and maintenance. “A lot of shops learned their lesson from that time and know to maintain a rainy-day fund,” he says.
Truglia notes, “We’ve been through really tough times before with 9/11 and some of the storms we’ve had.”
“We’ll get through it,” he adds.
Indeed, some repairers have moved beyond worrying about their own businesses and turned to humanitarian efforts. Finish Pros, with multiple locations in Metro Atlanta, is donating N95 masks to local nursing homes and hospitals. “Because we are a body shop, we have several cases of masks on hand at all times, so we decided to donate them to hospitals and other facilities that we think would need them,” says Joe Rizzo, Principal. Finish Pros hopes their act will inspire others to do the same.
As the industry heads into unchartered and what looks to be frightening territory in the months ahead, working together and feeling less isolated could be an important part of the prescription for renewed good health.
