Each year, ABRN hosts a Collision Industry Roundtable, bringing together a panel of collision repairers (see sidebar, “Who Was At The Table?”) to discuss what’s happening at their shop, the challenges they are facing, and what they see for their business and the industry as they look ahead. Here are some of the highlights of this year’s “roundtable” discussion (with responses edited for length or clarity).
How are you handling vehicle scanning and system calibrations? What do you do in-house, and what do you sublet?
Brad Zara: Around the first of last year, we decided to dedicate one technician to scanning, and we are scanning every vehicle pre- and post-repair. We use AirPro Diagnostics, and do about 90% of our scans with that. We also have a Snap-on scan tool that we will do some older vehicles with. About 5% we send out to dealers for unique situations. Same with calibrations. We’re able to do a majority of them in-house. We don’t have any of the targets, so any of those types of resets have to go to the dealer.
Luke Salter: We scan 95% of all the vehicles. Our repair planners are running the asTech for pre-and post-scans, then our technicians are performing the test drives. Regarding calibrations, most of that is being sent to the dealership. We’ve looked into getting more into it, but we don’t have the space for it.
Bob Noaker: In the past two or three years we started scanning 100% of vehicles. We use a Snap-on scanner for most everything.
| Who was at the table? |
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Dave Carney is the owner of Tualatin Auto Body, an I-CAR Gold Class shop in Tualatin, Ore., that is Brad Zara is founder and president of Zara’s Collision Center, now in its 33rd year in business in Springfield, Ill. |
Tom Elder: I had a lot of faith in aftermarket scan tools until recently when we let a car go with two rear seat belt tensioners blown, with no warning light on the dash. When I went back to the [aftermarket tool] scan, it said the car wasn’t equipped with rear seat belt tensioners. But when I scanned it with the Honda tool, it immediately came up with both rear seat belt retractors blown. Aftermarket scanning tools can be accurate, and they’re certainly a lot quicker and cheaper. But the complete accuracy to protect your liability may not be there.
Dave Carney: We just had a Honda, same thing, rear seat belts. Nobody was in the back seat [at the time of the accident], but when the car was all done, we discovered at the end that the rear seatbelts had blown.
Elder: The Honda scan tool is easy to use. It’s not real expensive. And it updates once a week. Things change rapidly.
Noaker: We’ll definitely be looking into that. We actually have the GM tool here. I agree, the more factory stuff you can have, the better.
Robert Grieve: We do pre- and post- scans on everything, using a Launch or a Bosch scanner, depending on what car it is. Most of our cars are ending up at the dealer for either an inspection or a calibration, and they’re doing scans as well. So we feel we’re pretty well covered. By using the dealer as often as we do, we’re creating some good relationships. Not to mention it’s less liability for me, when you have an expert third-party in there.
Carney: I have a mechanic on staff, and he scans every car, coming and going. Anything we can’t clear goes to the dealer. As Robert said: Spread the liability, let the experts do that. And I don’t have the room, even though I have a large shop, to put up all the targets and do all that. Fortunately I have a Honda, Toyota, Nissan and Audi dealer within a mile or two of me. So they love us bringing those cars. It’s helping us build a great rapport with them. They’re sending us work like crazy. Three years ago we got rid of most of our DRPs, and with the OEM certifications, we’re doing just fine.
James Rodis: We do everything in-house. Ninety-eight percent of our work is on Ford, Chrysler or GM vehicles. We now use the Mitchell scan tool and a factory scan tool on every single car. It seems redundant, but we like the Mitchell because [the data goes] right into the file in Mitchell Repair Center, so everyone has pretty quick access to it. The factory [scan tool results] get scanned into the file later so we have it forever to prove we used a factory scan tool.
There’s been legislation introduced in a number of states this year related to OEM procedures. Some call for shops to follow OEM procedures; others focus on requiring insurers to pay claims based on shops following OEM procedures. What do you see as the best approach to this, if either?
Noaker: Anything the state has to get involved with never seems to end up well. If I had to choose, I would have to say some sort of legislation for insurers. But then again, all those shops out there that aren’t doing it right are going to continue to not do it right and just get paid more for doing it that way.
Rodis: If I had to choose a way, shops should have to fix vehicles correctly. In my head, that will weed out the bad shops. But until OEMs put more teeth behind their [shop certification] programs, I don’t think it’s going to do a lot. I told GM earlier this year when they asked me how I liked their program: Quit telling people when you are going to come inspect them, and limit parts to people who are doing it the right way. Until that happens, I don’t think this situation is going to fix itself.
| Seeing growth ahead |
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The ABRN Collision Industry Roundtable participants are uniformly bullish on their company’s prospects for growth. When asked to rate their degree of optimism for growth over the next 12 months on a scale from 1 (very pessimistic) to 7 (very optimistic), most cited a 6 or 7. “Looking at our trend line over the past six years, we have more than doubled our business,” Luke Salter said. “We have always put our money back into our business for tooling and training so we can remain competitive.” Bob Noaker said the growing tractor trailer and RV segment of his business puts his optimism at a ‘6.’ “I would say a ‘6’ solely on the fact that we educate our customers about the actions we take to repair vehicles correctly,” James Rodis said. With a 13-year track record of business growth, Robert Grieve sees no reason the coming year will not continue that trend. The hold-outs are slightly less confident they will grow solely because of the difficulty of finding the needed employees. “I had a technician of 43 years die in February,” Tom Elder said. “He’s impossible to replace. I have three other technical spots open, and they have been open for more than a year. I just don’t get any qualified applicants.” “Right now, we need more qualified techs who are willing to repair the car properly,” said Dave Carney, who rated his optimism for growth at “4.” “We just had a guy for a couple months that we had to get rid of. He knew how to fix them right, but all he cared about was making money. So he’s back over at an MSO.” |
Salter: I don’t know if it’s realistic or not, but I think it’s a blend of both requiring shops to follow the OEM procedures, and the insurance companies to pay based off of OEM procedures. I don’t think you can have one without the other.
Grieve: I think it’s really a slippery slope. If you legislate that shops have to follow the OEM procedures, you’re putting a tremendous additional liability on them. I don’t think body shops are ready to be legislated to follow OEM procedures. I believe they should be followed strictly. But I just don’t see it as a reality. I believe legislating the insurers should be done first. We had one very large insurance company say they’re not going to pay for some procedures because they don’t feel it’s warranted. We took it to our Department of Insurance, only to have them say, “There’s no legislation that makes them [pay for OEM procedures], so we can’t make them do it.”
Zara: Anybody who knows anything about Illinois politics knows that legislation is useless. We’re just happy to keep our governors out of prison. (group laughter) I think this should be consumer driven. Those doing the right thing now have a little more advantage thanks to social media and the ease of consumers to research a business. I think the cream is going to rise to the top, and those that are not doing it correctly will be revealed.
What aspect of your business is your biggest current challenge? What keeps you up at night?
Zara: Our biggest challenge right now is definitely the OEM procedures: Who is going to research them? How do we incorporate that into our process to avoid negatively impacting productivity yet still have the documentation? Currently, our repair planners do the research. But even getting all that information to the technician, and documenting that it’s been done, is still a challenge.
Carney: We are working on that, too. I did hire a blueprinter doing the estimates and pulling up the OEM stuff, along with a mechanic doing all the scanning. So we’re working on that whole process.
Rodis: Our challenge is getting qualified techs. We’re 30 minutes away from Omaha, so to get people to drive out here can be a little harder, even though we feel they generally are going to get more hours on an estimate with us, just because we research things and try to get paid for what we’re doing. So we are training [entry-level employees], letting them learn from a quality tech, getting them some I-CAR classes and things like that to hopefully be our next generation techs.
Grieve: What keeps me up at night is what I don't know that I don’t know yet, and that I probably should. Three years ago if you had told me that we’d need three different welding wires and two different gasses depending on what we’re welding, I would have said you’re nuts. But that’s the truth, and now we know it.
Could you share a prediction or two, something that you think will have happened or changed three years from now, by mid-2022?
Salter: I think the OEM shop certifications will start being a bigger factor. As more vehicles become connected, the OEMs will have the first notice of loss instead of insurance companies.
Elder: Yeah, I see the demise of the direct repair programs coming like a freight train.
Salter: I also think there will be a lot more burden on shops to follow the OEM procedures: more documentation, more photos of test welds, more in-process photos. As OEMs play a bigger role, it’s gong to run the smaller shops out of business, unfortunately. I think the number of shops will probably decrease 6% within three or four years, and as much as 10% within 7 to 10 years.
Elder: I also think the advanced safety systems on these cars are going to reduce the total number of claims that we have. We’re beginning to see minimized collisions. We’re beginning to hear stories from customers, “The car stopped by itself and I avoided hitting the car in front of me.” These things are going to happen and it’s coming quickly. I think there’s going to be a lot of shops that disappear.
Noaker: I would say I would disagree with 70% of what’s been predicted. I don’t think there’s any fear of running out of work. Nobody can put their phone down. Everybody turns the safety equipment off. I think DRPs will stay around a good 10 years. I don’t think the OEMs will get their act together any time soon. I think when they do, we may be wishing for the good old days of the DRPs and the insurance companies.
Why do you say that?
Noaker: The OEMs make us buy so many duplicative tools. I think that will be a very small portion of the hoops that they will put us through [once they] actually have more power. Time will tell. I also predict that in the next three years, you’ll see a major consolidator close up. Money is not cheap anymore. It’s not going to be as cheap to buy up shops. Investors are not going to like this industry as much.
