BodyShop Business
Labor Guides Aren't Your Boss!
Charlie Barone
4/1/2001

There are two answers to Tom's primary question: a short one and a much more involved answer that relates to markets, perceptions and estimating procedure. His inquiry is best addressed by the fact that collisions are random events and each damaged car is like a snowflake, with unique characteristics. For that reason, labor guide editors have no choice but to study labor times on undamaged cars. It is, however, crucial that a labor database provider have a thorough working knowledge of the reality of repairing damaged vehicles. Seemingly, this is the purpose of the oft-mentioned P pages.

Why Undamaged?

There's no consistency in collision damage. The force of impact, its directional offset, the temperature at the time and the nature of the offending vehicle determine how the damage is configured. If you examined 40 damaged fenders on identical vehicles, you'd see 40 unique sets of circumstances. There would be substantial impediments to their removal on some, while others might require a simple bolt-on/bolt-off operation (such as that found with the replacement of a new, undamaged part). These circumstances introduce tremendous opportunity for user input.

New, undamaged vehicles, by comparison, are far more consistent, which makes a strong case for the database providers' practice of basing their times the way they do.

"We have few logical choices for a basis," says Phil Cunningham, labor editor for Motor Publishing - providers of the labor database used in all CCC estimating products, as well as a number of others such as Comp-Est. "One could only wonder what type of chaos and confusion would exist if we based our times on collision-damaged and/or rusted vehicles. One party would assume the time was based upon light damage of a car from Phoenix. The other would assume the time was based on heavy damage of a car from a rust-belt state like Michigan."

Says Rick Tuuri, database manager for ADP Claims Solutions Group: "One of the most misunderstood phrases in the industry is the 'new and undamaged panel' statement that ADP and the other information providers make. People like to poke fun and sometimes seriously question the validity of 'time studies on new and undamaged panels.' When ADP refers to 'times that apply to new and undamaged panels,' we simply mean that we use this as the benchmark condition for panels required for collision repair.

"Our database includes time to replace components, not times to repair them. When a shop replaces a component, it's already returned the car to factory specs - I hope -and is ready to install parts under reasonably like-new conditions. Although access time is a reality, access time, like repair time, is not standard and varies based on the actual condition of the vehicle being repaired. Therefore, no provider can automate access time."

According to Kevin Earlywine, Mitchell's senior collision labor editor, "Labor times are developed based on a compilation of the following: We receive all pertinent information from the vehicle manufacturer - such as body repair manuals, build sheets, service procedures and warranty values. We firmly believe that the vehicle manufacturer designed and built the vehicle and, therefore, knows best how to return it to pre-accident condition.

"We also perform time studies to aid in developing new and documenting existing allowances. Our historical database is also queried for pre-established allowances that can be utilized on sister/cousin platforms.

"Lastly, the editor's hands-on experience is utilized to compile this information and to finalize the final values along with specific vehicle labor notes. Currently, we have 10 labor editors - seven collision labor, two mechanical labor and one heavy truck specialist. They average 15 years of industry experience.

"Studies - and therefore Mitchell labor times - are based on new, OEM undamaged parts on new undamaged vehicles. Results from hands-on field research has demonstrated that there are many variables involved when allowances are based on damaged vehicles. We never know to what extent there's previous damage, when access time is required, when parts need freeing up or when tar and grease would need to be removed. Using the premise of new, undamaged vehicles, the variables are minimized and times are verifiable."

It's What You Make of It
If your shop relies on the bids for repair created by its customers' insurers, you're not likely to get the benefit of everything that lies in store for the skilled user of the crash guides. It's important to note that the P-page addenda for each estimating system makes a disclaimer with regard to its usage. That is, all the impediments and conditional factors to the removal and replacement of parts are separate, not-included items. In other words, those items that make each hit unique in terms of its difficulty to repair need to be included in the estimate. More fundamentally, each database provider states that its data is to be used as a guide in estimating damage repair costs. The insurance industry's reliance on the guides as the last word on labor costs notwithstanding, the fact remains that a shop (as an independent business) is free to write its bids as it wishes, taking the fullest advantage of the user-defined portions of the programs.

Body shops also reserve the more basic right to reject a third-party bid as insufficient. Doing so, however, can be problematic for a shop owner. He risks getting dragged into a dispute - one that's essentially between the customer and the insurance company. This tends to place the owner in a most uncomfortable position and, clearly, no one wants that. Far worse, a shop that rejects a bid can be seen as declining work, an act with consequences that might include losing the job and alienating a customer.

Historically speaking, labor guides haven't always been regarded as restrictor plates to profits. When first published, the guides were nothing short of revolutionary for body shop operators. Now, collision repair shops could reduce their non-productive time in the administrative and bidding work because they had an extensive listing of crash parts, prices and illustrations. Instead of having to guess how long it would take to remove and replace a window regulator and how the factories serviced those parts, shops had a guide on which they could base their written estimates. In those early days, the two operative words - estimate and guide - were used in the literal sense.

The object is to open the P-pages and use them! There are real-world impediments to the removal and replacement of car parts. For example, corroded fasteners and bolts can slow down your technician considerably. You might have to soak the fastener in penetrating oil, smack it a few times and come back later. Nothing can be worse than a bolt broken in a cage nut inside a rocker panel or an equally inopportune place for a fastener to snap.

Collision access time is one often-overlooked item on shop estimates. Many times, the collision damage will prevent a technician from opening a door, a deck lid or hood. But the steps he must go through to gain access to parts to replace or repair them aren't included in their replacement times. And why would they be? Undamaged hoods usually open just fine.

Pre-pulling a damaged panel before its welds are drilled out is another commonly forgotten item on the sheets. You simply don't remove and replace collision-damaged welded panels. Also, anything you must do to accomplish this - such as welding tabs, a series of pins or punching a hole in the panels - needs to be added, too.

If a car is filthy before it comes inside your shop, it must be cleaned. Pre-wash operations aren't included in paint times. A solvent wash, however, is part of the refinish operation as defined in most of the P-page guides.

Tinting, blending, back masking jambs, car covers, color sand and polish are also not-included items and must be written separately in accordance with the various estimating programs and books. Note: Electronic and printed versions of the same database should be identical.

Numerous sources for training on how to use labor guides are available. Whether you're using any number of electronic estimating systems or the printed versions, there are untold angles from which each repair can be approached. Glen Funk of Motor Publications has been traveling the United States for years giving seminars on estimating. One principle he drives home to the people is, "If you do it, write it."

Historically Speaking
Back in the old days (say, as recent as the early 1960s), an estimate was exactly that - a rough idea of repair costs given to the customer so he'd have an idea of what to expect when he picked up his car and had to pay the bill. Invariably, the final bill (invoice) was marginally higher (and in some rare cases, lower) than the estimate. However, customers shopped around more in those days, often at the insistence of insurance agents who told insureds they'd only pay the lowest bid. Due to the manipulation and fraud that came as a result of that practice, the lowest estimate game has all but disappeared today.

The guides provided a key to how much time you could expect to spend in the removal and replacement of a limited amount of commonly damaged parts. For someone without experience on certain models, that was useful information. Up-to-date parts prices were also invaluable, both from a body shop's and a parts department's perspectives. Instead of having to call a dealer for prices or rewrite the bids after receiving parts, it was all right there.

In the 1960s, the labor guides enabled insurance companies to begin writing their own estimates, instead of having to "adjust" a shop's bid. The eventual effect was to decrease the number of estimates written by the shop prior to an inspection of the damage by a representative of the insurance company. The body shops' acceptance of the bids created a trend in which the insurers began to assume the mantle of setting repair prices. Either by sheer complacency or the operators' willingness to jointly work up an estimate with an adjuster, the responsibility to bid on work began to shift away from the body shops. In fact, some shops preferred to have the insurance company speak first, fearing they underwrote the estimate.

With the development of the now omnipresent labor guide - which at its inception primarily served as little more than an up-to-date parts price list - estimates could be written more efficiently. Fast forward 40 years and we can see how the effect of the guides and their universal usage was to standardize labor. Clock time gave way to book time.

Matter of Choice
Ultimately, disputes over repair costs boil down to what a provider of collision repair is willing to accept. If virtually every shop in town rejects a bid from an insurance company, how valid is their estimate as a measure of damages to the policyholder's car? The problem with rejecting bids, however, is that there's almost always someone - be they hack or crackerjack - that will take a bite from an unripened apple.

"The labor standards that 'reflect life' referred to by Mr. Ferguson can be achieved by using the time standards combined with your own expertise in providing and accounting for repair times and access time, when applicable," says Tuuri. "I know of no one who - in my estimation - will ever be able to automate 100 percent of an estimate because of the variances that occur in each case. Put another way, I've personally had more than 25 collisions in my driving career and I've never had the same one twice."

Writer Charlie Barone has been working in and around the body shop business for the last 27 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.

What Does It Really Matter?
You don't compete with databases; you compete against other shops. With that understanding, the labor database times don't carry that much significance and aren't relevant to what you sell your labor for

In the final analysis, what does all this matter to an operator of an independent body shop? In all the years I worked for the Chilton Company - the name synonymous with automotive labor guides - I never actually witnessed the Chilton Book Company doing a time study for their professional manuals. Over time, that database dominated virtually all corners in that market, establishing itself as the pre-eminent reference. But their management of the information and the way the times were derived might surprise you. There was one fellow in the company who essentially held that responsibility. His name was Bob. Through his vast industry contacts with dealers and independent mechanical shops and his own personal knowledge, he was in a position to have the last word on times. What an enormous task! To think that the financial future of all these businesses hinged on Bob's best judgment - or did it?

Was this lack of extensive hands-on research scandalous? Or did it make any difference in their database's acceptance in the market? Apparently it didn't because the Chilton guides stood on their own and were a matter of tradition in the mechanical service market, long before Bob came on the scene. Repair shops have relied on the Chilton professional manuals for service information and labor times as a matter of faith ... but you never heard their customers demanding to see time studies. Why do you think that was? Was Bob always on the money? Did Bob's opinion, or for that matter Chilton's labor times, control the mechanical service dealers? Of course not.

What if there were a Bob working for one of the publishers of the collision labor guides? Would he bear responsibility for repair costs? What would be the point?

The difference with the Chilton scenario and what BodyShop Business readers face is that mechanical shops generally don't let third parties write their bills or set rates. For them, the book labor times are what they're intended to be: guides, not prices. And despite the presence of a growing number of third-party pay systems in the market for mechanical service, prices for mechanical labor tend to self-adjust based on demand and availability.

It's the same for the autobody business ... or at least it should be. Just remember you don't compete with databases; you compete with each other. With that understanding, the labor database times really don't carry that much significance, so existence of time studies isn't relevant to what you sell your labor for, is it?

If you find a third-party bid won't cut it and labor times are low, simply ignore them. Reject the bid and concentrate on what the work is worth in your area. What's the job's actual market value using the assumption the job is done correctly? Not perfect, mind you, because that's not always a realistic expectation. As well-known West Virginia body shop owner and activist Jim Graley once said, it's not about being perfect. It's about a safe and acceptable repair - one you'd be proud to sell to your customers. That's your target.

Editor's note: Since the sale of the Chilton Company and the dismantlement of its assets, the Chilton labor database has been licensed to Nichols Publishing. Nichols does, in fact, have a fully equipped facility for their study of actual mechanical labor operations.


Why are the labor time standards done on clean, undamaged parts?
The industry's Big 3 labor database providers respond:

ADP Claims Solutions Group: "Our database includes time to replace components, not times to repair them," says Rick Tuuri, ADP's database manager. "When a shop replaces a component, it's already returned the car to factory specs - I hope - and is ready to install parts under reasonably like-new conditions. Although access time is a reality, access time, like repair time, is not standard and varies based on the actual condition of the vehicle being repaired. Therefore, no provider can automate access time."

Motor Publishing (providers of the labor database used in all CCC estimating products, as well as a number of others such as Comp-Est): "One could only wonder what type of chaos and confusion would exist if we based our times on collision-damaged and/or rusted vehicles," says Phil Cunningham, labor editor for Motor Publishing. "One party would assume the time was based upon light damage of a car from Phoenix. The other would assume the time was based on heavy damage of a car from a rust-belt state like Michigan."

Mitchell International: "Results from hands-on field research has demonstrated that there are many variables involved when allowances are based on damaged vehicles," says Kevin Earlywine, Mitchell's senior collision labor editor. "We never know to what extent there's previous damage, when access time is required, when parts need freeing up or when tar and grease would need to be removed. Using the premise of new, undamaged vehicles, the variables are minimized and times are verifiable."



More articles in Articles
article image
The 2014 NACE/CARS Expo & Conference is taking place July 30-Aug. 2, and what better place to have i...
article image
Add-on businesses can be just the thing to give a lift to a sagging bottom line.

Most Commented