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Bull In a Body Shop
When you believe something - fact or fiction - your belief shapes your reality. In this industry, repairers have held certain convictions for so long that they can't recognize them for what they really are: bull.
By Charlie Barone
11/1/2004
There's a particularly dangerous strain of misinformation - more commonly known as bull - that's taken up residence in a body shop near you.
When they say information is power, the saying also applies to misinformation. In every conflict in history, the opponents worked hard to learn as much about the other side as possible, while at the same time, directing a campaign of misinformation toward their foe.
Imagine a battle in which every soldier believed his rifle would overheat and be rendered useless if it was fired more than three times in an hour? Well, some of the things we've been led to believe are just as damaging.
Let's take a look at a few of the ideas that have formed the basis for our belief system over the last couple of decades - and at how these beliefs are wreaking havoc on the collision repair industry.
Bull: Insurance Companies Control Prices and Processes
Truth: The only party with any say so in terms of what happens to a vehicle is its owner. Period. Any proposals from a third-party (read: insurer-generated estimates, supplements) are only as relevant as the owner of the car and the repairer deem them to be. No one can force your customer to use parts that are clearly inferior any more than one can compel a customer to use water colors to re-paint his car.
The recurring theme from State Farm Insurance Company that surfaced during the landmark aftermarket parts class-action case was the company's insistence that "State Farm does not repair cars." And when insurers choose not to exercise their option to repair per the insurance contract, their influence cannot extend into the repair process. All they can do is pay the bill. The price for repair, regardless if adjusted up or down to suit either party in the repair transaction is (and always will be) established independently, insurance claim notwithstanding. That is, whatever is agreed upon by the customer and his body shop is a transaction apart from a claim. Even if the repairer sees additional damage and calls an insurance rep out for a supplement to the claim, he's not held to the terms or figures in said supplement. The fact remains that an insurer, regardless of it being a first- or third-party claim, has an obligation to cover the loss. What an insured/claimant does with the money is entirely his business.
Consumer laws and those that specifically address auto repair are the ones body shops must abide by. In most cases, the laws don't differentiate between body shops and repair shops in general, but typically say a repairer must provide itemized bills with parts detail and, in some cases, identify the part's origin, such as non-OEM, salvage, reconditioned, etc.
If there is a law in any state that says a third-party payer has any say in the outcome in terms of the repair, I have yet to see it. By the same notion, no state has given authority over prices charged by body shops to insurance companies. It would be a clear case of the tail wagging the dog.
This is not to imply that such tail wagging isn't exactly the case in the body shop business. To a great extent, this is what happens when shops cede control to insurers and literally tie their own hands in the process.
A recent experience with an Acura dealer's body shop in Maryland shows me how helpless management has become in this trade. In the course of a repair to a six-day-old TL, the shop saw a clear need for an outer wheelhouse, but was hogtied by an unconvinced Nationwide insurance adjuster - who wanted them to try to magically make the torn sheet metal mend itself.
Stymied by their reluctance, the shop let the car remain in limbo and never once discussed the issue with its owner, who, by the way, was not even insured by Nationwide.
What makes this story so pathetic occurred when the car was reported by the body shop as having been completed and ready to deliver to its customer. When asked what the final bill was, the manager replied, "I don't know. Nationwide hasn't told me yet."
Ina Delong, the noted consumer advocate who left a long career with State Farm after butting heads with her company in her attempts to fairly settle homeowners claims after the Loma Prieta earthquake, put it succinctly. She said, "The only role an insurance company has is writing checks."
The fact that so few body shop owners grasp this truism is tragic.
Bull: OEMs Produce Perfect Products
Truth: A good friend of mine who's been a Sikkens rep for as long as the paint's been in the United States likes to say, "There are no car gods." And after seeing my late-model Camry throw a rod recently, I have to agree.
If I may play devil's advocate for a moment, it's an arguable fact that OEM build quality and materials aren't always what they could (or should) be. A perfect example is the OEM paint disasters of the late '80s and early '90s, in which color coats on selected vehicles blew away like autumn leaves.
The delamination claims and costs to the North American automakers ran into the hundreds of millions, according to industry sources. And in a case in which a body shop applies an aftermarket urethane finish to one of those models, one might say it's an improvement on OE quality.
Daimler Chrysler's body shop point man Daryl Porter said in a recent presentation that the urethane coatings being applied in the aftermarket can often exceed the OEM finishes.
The point here is that factory ain't always the best, and in some cases, the products are downright disgraceful.
Take a look at the early '90s Ford Explorers on the roads in the rust belt. A recent visit by me to the Chicago area underscores the fact that the fabled SUVs are rotting like 1957 models sold by the same Dearborn carmaker. What for many cars is an indication of non-OE panels and paint gone bad as a result of a poor collision repair job is reappearing in the factory assemblies like some awful déjà vu. The sight of OEM-rotted rocker panels and dog legs on the wife wagons are becoming all too common.
And Ford isn't alone. Chrysler and GM and Mitsubishi, Mercedes and even my personal favorite Honda/Acura, are all guilty of making mistakes in design and production.
Is this of any great concern to those of you in the business of fixing their cars? No, not really. My point here is that everyone and every organization is fallible. Some more than others.
Bull: Non-OEM Sheet Metal Can Exceed OE Performance
Truth: Another particularly scurrilous myth that's been circulating among the non-OEM parts mongers are claims of exceeding performance in "tests" done for fit and packaging. Such claims are akin to those made by laundry day miracles of whiter whites and bluer blues. How can a copy of an original be more of an original ... or original-er?
Claiming to be more of a Toyota than a Toyota itself doesn't make a great argument.
If an aftermarket imitation part is reverse engineered off one taken from a new, undamaged vehicle, how can the copy exceed the original in terms of performance? It's clearly impossible.
However, that's exactly what's been claimed using some rather non-scientific test methods. For example, the notorious Collision Industry Conference (CIC) test fits were held out by organizations like CAPA as proof of the non-OE parts quality.
Having witnessed several of these trials, I'd like to point out some details that didn't make it to the press releases. For example, a few years ago in Toronto, I saw a late-model Maxima being used in one of those tests at the CIC meeting. The car was taken from a used car lot (supposedly a random example of the model), but no one cared to mention that the Nissan had sustained a previous front-end collision and showed all the telltale signs. The "tests" proceeded nevertheless, although my cynicism left me less than anxious to see the scores.
While we're on the topic of non-OE parts, I want to briefly address another myth surrounding them - that A/M parts manufacturers are evil. Fact is, they're not as evil as they are clever in seizing an opportunity.
In a global economy, choices and competition are positive forces and ultimately help all consumers. Producing copies of body parts - even the crudest ones - at the prices they sell for to the U.S. distributors is nothing short of a marvel. Even the OEMs are planning on setting up shop in Taiwan in order to market their own competitively priced parts.
I assure you, when my son's '91 Prelude needs a new fender, I won't be sending him to the local Honda dealer with his hard-earned summertime dollars.
On the other hand, the evil aspect surrounding these parts is the result of their gross misrepresentation to consumers as viable alternatives to invariably better-quality OE replacement parts. Face it, aftermarket body parts are cheap for a reason. But their manufacturers and to some extent, their distributors, are no more evil than the people who brought you $29.95 paint jobs and car batteries that last one season.
Bull: We're Becoming a More United Industry
Truth: Here's one that isn't so much a myth as an unfulfilled dream - one that's eluded so many dedicated and concerned collision repairers. The oratory on this subject is nothing less than inspired, with Patrick Henry-like declarations of independence and freedom as the common thread.
Yet the industry is as divided today as the United States was in 1861, with lines drawn along similar self-interest, political and moral lines of both eras. To DRP or not to DRP, that is the question.
Can a shop be only a little bit DRP and still be a little bit country at the same time? Can one belong to the confederacy and still dance at the parties?
Nothing has torn this industry apart like this argument, and it shows little sign of being resolved. Ever. In fact, the trends indicate a slow but steady penetration of the DRP arrangements into the body shops. According to some studies, the majority of shops participate in some fashion as a preferred shop for some third-party payer.
And as long as the political factions in the collision repair industry remain as exclusionary organizations in an effort to weed out the undesirable elements of the shop clans, they'll remain in their mud huts while Longshanks and his men (we all know who they are) have their way with the population.
By granting land and title (preferred shop for Regal Beagle Insurance Company and customers for as far as the eye can see), unity among the peasant countrymen is as temporary as a three-course meal. And the hungrier the shops are, the more inclined they are to drop the sword and come to the table.
Bull: Cost Shifting Is Fraud
Truth: If your customer tells you that it's not important to him and that he won't pay for you to R&I his trunk lock cylinder, who's to say otherwise? The fact that he has a check for $4,566.03 from an insurance company burning a hole in his pocket isn't relevant. If your shop agrees to fix the customer's car for $4,320 and the lock cylinder stays where the UAW worker put it in the first place, so be it.
What your shop must avoid at all costs is the impression that it's following the insurance proposal for repair (we call them estimates).
The old, lazy habit of writing "repair as per estimate" on a repair order or final invoice must be avoided at all costs. The object is to say what you do and do what you say. It's that simple.
One of the things that perpetuated the myth that cost shifting is an act of fraud came from where else? The insurance industry.
Several years ago, I was reading some bullet points on the National Insurance Crimes Bureau Web site and came across an example of insurance fraud used by the industry-financed quasi law enforcement group. It described a scenario in which a consumer had an insurance settlement check for, say, $4,566.03 and was shopping around for a cheaper repair. The NICB called that fraud. When I asked their spokesperson to explain how an insured or a claimant was compelled to spend that money, I got no reply.
The bullet point I mentioned, however, disappeared off their site. And they still haven't answered me.
Once again, a perception of illegality is all that's needed to keep this misguided balloon in the air. It comes crashing to the ground, however, once you consider the fact that so many car and truck owners trade their vehicles in their damaged state. Cashing out isn't against the law; an insured/claimant has that right.
If that isn't illegal, then how is it against the law to spend some of the money and do some of the work?
Bull: Database Times Matter
Truth: I recently did an audit of a customer-paid collision repair on a late-model Z06 Corvette that was wrecked during a race at Lime Rock. The repairing shop submitted an estimate to the owner that was just under $20,000 - a very expensive hobby when you consider that the loss wasn't covered under his insurance policy.
But what's interesting here is that the owner of the Vette was fairly knowledgeable with respect to estimating systems and wanted to make the case that the shop somehow overcharged him for the repairs when the final bill listed more hours than the estimate showed. While there were significant problems with the work and the billing, there was no basis for his challenge to the shop for billing him on an actual hours-worked basis. In fact, billing for database hours when the actual times are significantly less is where the real briar patch lies for shops.
A number of years ago, I wrote an editorial and posed a scenario in which a woman - who was paying for the repair out of pocket - tried to force a price on a body shop. Clearly, she had no business naming her own price in the sale of collision repair, and putting an insurance draft in her pocketbook doesn't change that fact - nor does it compel a shop to succumb to pressure in terms of price.
This ain't Priceline.com and it never will be.
Estimates are estimates. Labor times are used to generate those estimates and should be viewed as exactly what they are - good guesses. Speaking as a person who hasn't gained hands-on knowledge of all cars on the road, I feel an estimate generated by any of the systems is an invaluable tool, but I don't lend one any more significance than it warrants.
Bull: Industry Forums Effect Change
Truth: Speaking as someone who spent way more time than I'd care to admit futzing with discussion boards, I submit that they're all pretty meaningless. The debates have, at times, been engaging and a lot of cogent thinkers contribute to them all. But the fact remains that no matter what's said on Autobody Online, at CIC and at the various leadership conferences and resolution forums, it's all pretty much a tempest in a teapot - electrons bouncing around in a vacuum tube on an antique table radio. Little more than static.
I mean no disrespect to the dedicated professionals who give their time and resources to the advancement of the industry at large. However, attaching significance to the rhetoric and cyber chat can be a mistake. You may prove a point, but outside of winning that round in a discussion, substantive benefits seem to be elusive.
Bull: You Have the Right to a Profit
Truth: There's a sentiment in this business that's surfaced among the body shop owners who've been victimized by the current trends of commerce. While there are quite a few valid complaints with regard to direction of work, interference with the businesses of independent body shops and manipulation of pricing and bids - all of which are very valid and in some cases actionable - there's a thread of entitlement that accompanies that state of mind.
That is, some shop owners declare that they have a right to a profit, which is fundamentally wrong.
Even though no one deserves to have their customers steered away or to have their reputations trashed, no business has a right to a profit, much less a right to be in business. We're all subject to the vagaries of the marketplace, the economy and our reputations.
When I hear industry people longing for the right to run their businesses free from outside interference, I have to agree. But with the right to operate independently comes the reality that all businesses face: There are no guarantees. And this applies to everyone, be it a street vendor of hot dogs or a Wall Street trader.
The Truth Hurts
Thank you for your indulgence, and I hope I haven't offended too many of you with my blasphemy. What I hope I got across here is that perception can be reality, particularly in this business.
Shops are controlled if they believe they are controlled. And insurers can dictate prices and procedures as long as shop owners are willing to listen.
Worst of all, your customers are inclined to believe what their insurance companies tell them, most of which tends to be self-serving rhetoric with no basis in fact.
Don't let this B.S. infiltrate your way of thinking. As professionals, you know better than anyone where the truth lies. If you don't - if you've let the bull into your body shop - you only have yourself to blame for the mess it makes of your business.
Writer Charlie Barone has been working in and around the body shop business for the last 33 years, having owned and managed several collision repair shops. He's an ASE Master Certified technician, a licensed damage appraiser and has been writing technical, management and opinion pieces since 1993. Barone can be reached via e-mail at charlie@autoclaimshelp.net.