A State of Unions Address - BodyShop Business

A State of Unions Address

While many shop owners say a unionized workforce would spell disaster for their businesses, many techs say industry labor rates are making a disaster of their paychecks. Is a drastic change needed – and will that change come in the form of unions?

Editor’s Note: Sick and tired of not being able to properly treat the sick and tired, members of the American Medical Association (AMA) recently voted to develop an affiliated national labor union to represent doctors.

Why should you care?

Aside from the fact that many people aren’t receiving adequate medical care because of the way some HMOs are being managed by insurance companies, many predict that direct-repair programs will evolve into preferred provider organizations (PPOs) — a fraternal twin of HMOs. (PPOs won’t be identical to HMOs, but their genetic makeup will be the same.) If this evolution happens, today’s health-care industry may be the crystal ball that reveals where tomorrow’s collision industry is heading.

According to Randolph Smoak Jr., chair of the AMA Board of Trustees, members of the AMA created a union to allow eligible physicians to advocate more effectively on behalf of their patients, stressing that doctors who join the union won’t strike or endanger patient care.

"Our objective here," says Smoak, "is to give America’s physicians the leverage they now lack to guarantee that patient care isn’t compromised or neglected for the sake of profits."

Now substitute the word "physicians" with "shop owners" and the words "patient care" with "vehicle repair." Sound familiar?

An even better question is: Could collision repair technicians be the next to unionize? Some say yes, some say never.

— Georgina Kajganic, editor

As with everything else in life, the only constant is change. Unibodies, computers, safety restraint systems and all the other equipment and knowledge needed to repair vehicles has advanced our industry into a new era. No longer are we just "mudslingers." We’re technicians now.

With all these advances, we had to learn more — and also hoped to earn more. But something happened that hampered our opportunity to increase our income based on our skills and talents: cost containment. Insurance companies — in their effort to cut costs — have erected a wall that we haven’t been able to scale. And, while shop owners often express their discontent with the situation — saying that, if they could, they’d pay us what we’re really worth — their hands are tied, making it almost impossible for them to scale that wall.

Don’t get me wrong, many shop owners have tried — and are still trying. They’ve lobbied their legislators for fairer laws and enforcement of existing ones. They’ve instituted diminished-value inspections and post-repair inspections to force quality repairs and payment for them. They’ve worked to educate vehicle owners about their rights and their choices. Even major consumer publications — such as Consumer Reports — have helped spread the word that "cheaper ain’t better."

But, still, that wall stands.

No single person has been able to scale it or bring major change to the industry. But, say some collision repairers, maybe it’s not about scaling it; maybe it’s about getting together and, collectively, knocking it down.

After all, there’s strength in numbers.

Steve Bowden learned about strength in numbers after leaving the collision repair industry in June 1998 to become a union sheet-metal worker. Why’d he leave? "[My employer] wanted no part of helping me provide for my future," says Bowden, who had topped out at $12.50 an hour flat rate in only four years in the trade — and wasn’t receiving any benefits. "I had a son in ’94, which changed my whole perspective on life and my future. I wanted to start saving money for my retirement. When I looked into it, I was surprised how much I’d have to put away to have anything for when I turn 65 — and I’m only 29 now. After I figured it out on paper, I was knocked down to $8.50 an hour to live on for the next however many years it would’ve taken till the insurance companies chose to let my employer give me a small percentage of his raise.

"I had no where to go but out the doors of the trade."

As a union sheet-metal worker, Bowden started at $8.98 an hour and, after 90 days, received full benefits, which includes an international pension fund; a local pension fund; medical, dental and vision benefits; and a 401k.

"The total benefits package is right around $9 an hour above the $8.98 an hour I saw on my paycheck, so I pretty much got a raise of $5 an hour three months after I quit the body trade," says Bowden, explaining that he’s only at 40 percent of scale because scale for journeymen is $22.47 an hour — and with benefits that comes out to more than $31 per hour. "Every six months, I receive a 5 percent increase in pay as long as I’m completing the requirements of the program," he says. "It’s been a year for me, and I’m already up to $11.23 an hour. When I turn journeyman in three years, I’ll be taking home more than $25 an hour, plus benefits."

Besides the money, Bowden says being in a union provides other advantages as well. "I’ve heard good and bad about unions," he says, "but one thing is always there to fall back on: a contract of agreements between the union and the contractors. They have rules we have to follow, and they, being contractors, have to abide by them, too. Whenever there’s a grievance between us, they always pull out the contract.

"As autobody techs, we have nothing to help or guide us in our efforts to keep control of our future. If we have a problem with our employer, we have only his rules to go by — and he may change them day to day. We have nothing in writing to say that our employers can’t make us complete procedures for free. Every shop owner has his own set of rules as to what he expects of us — and we have nothing for him to follow. And the usual response to a grievance is, ‘If you don’t like it, leave!’

"So the tech with a problem is left standing there alone because his fellow techs won’t stand with him."

Why won’t they back him up? For many reasons, says Bowden, such as: It’s not their problem, they don’t care, they can’t afford to lose their jobs or they don’t know if the guy with the problem has a legitimate complaint — after all, "there’s no book or contract to tell him if he’s right or wrong."

Says Bowden: "We cannot stand together if we have nothing to stand for together."

But, the question is, could unions work in the collision repair industry?

Examining a Unionized Body Shop
For this assignment, I wanted to find a shop that’s been unionized for a while to examine the long-term effects of a unionized workforce on the business. In Philadelphia, Chapman Ford has been in business for nearly 25 years, and according to whom you talk to there, it’s been unionized anywhere from 18 to 24 years. To look at unionization from all angles, I interviewed the owner, the manager, his assistant, the shop steward and a union technician. Here’s what they had to say …

In This Corner …
Michael Chapman, COO of Chapman Auto Group, headquartered in Noristown, Pa.

BSB: Owners of smaller shops seem to think it would bunkrupt them to be unionized. What do you think about that?

Chapman: No, I don’t think it would bankrupt them.

BSB: What do you think about being unionized? Has it hurt you or helped you?

Chapman: I don’t think it’s hurt us or helped us. We’ve got five body shops, and there’s only one shop that’s union.

BSB: If shop owners are against unions, what can they do to prevent them from happening? What can they change that will keep techs happy?

Chapman: Don’t let profit stand in the way of employee satisfaction; make employee satisfaction the No. 1 priority. If you do that, employee satisfaction will take care of customer satisfaction, which will take care of profit.

BSB: In your opinion, what are the odds of mass unionization occuring in this industry?

Chapman: I don’t see it happening. With so many small, independent garages, I don’t see it as a threat. Like I said, we have five body shops total, this is the only body shop that’s unionized.

BSB: Would unions help to attract and retain employees?

Chapman: No. Guys hate to work in a union shop because if your hourly rate is $15 an hour, you pay $30 a month in union dues, and you pay $300 just to join the union, and a lot of guys don’t want to do that. It’s easier hiring in a non-union shop.

The Referees Are …
Manager Keith Summers — who’s been with Chapman Ford for 10 years — and his assistant, Kathy Ruppert.

BSB: Do you have a good working relationship with the union?

Summers: With my employees, I do — the ones in my department.

BSB: Have there been any situations or problems?

Summers: Well, there are always a few situations or problems — a lot of stupid little things.

BSB: Any examples?

Summers: We bought a new paint system, and they brought some people in to demonstrate it, to work with us. The union shop steward noticed there was someone else working back there, someone new, and he wanted to know who he was and who was getting paid for what he was doing. Now that’s a stupid thing. But they thought it was taking work away from a union employee, when actually all he was doing was training our guys.

BSB: Your guys are flat-rate. Have they ever complained to the union about not getting paid for doing work that wasn’t on the ticket — especially insurance estimates that don’t pay for certain procedures?

Summers: No, my guys aren’t like that; they don’t get that deep. They question me, and I prefer they come to me. If they go to the union, they make a big deal out of it. If you get the union involved with anything, it snowballs, so I try to avoid all that, and if they have a problem, I’d rather they come to me. In other words, it really gets out of hand.

BSB: But it’s there as a last resort?

Summers: Yeah, but we have a good relationship, so it’s not necessary.

BSB: Have you had any job actions since you’ve been here?

Summers: Yeah, we’ve had two strikes. And both times my employees didn’t want to go out, but they had no choice; they had to go. They won’t cross the line.

BSB: So that’s two job actions in 10 years. That’s really not bad, is it?

Summers: One only lasted a few hours, the other one lasted a week.

BSB: How did the union get in here?

Summers: Around 18 years ago, a few people probably convinced everybody to vote them in — and once they’re here, it’s kind of hard to get them out.

BSB: Has the owner ever tried to get them out?

Summers: No, you can’t do that; it’s not possible to do. Management or ownership can’t initiate anything.

BSB: Would you say the guys are content with the union? Do you hear any bad things from your guys?

Summers: Every once in a while I hear some bad things about the union. The union makes some stupid decisions when the contract is being negotiated. And over the strikes we’ve had, quite a few employees have been a little disgruntled. They were upset with the union about how the strikes went down. The first strike we had, the guys didn’t even know they were going on strike. They were in negotiations and the contract had expired — but they were negotiating. And one day the union rep came in, asked for a show of hands and said, "How many guys want strike pay if we strike?" Well, naturally all the guys raised their hands, and then he went right up to the owner and said, "Everybody down there wants to strike." They misconstrued it. They led the guys around, and all the employees are standing around scratching their heads saying, "What did we just vote for? We really didn’t want to strike, but now this guy is telling them we really do want to strike." Then the next day, the union guys poured epoxy in all the locks, and nobody could get in. They vandalized the locks, and they didn’t tell our employees they were striking. They just had goons at every gate — teamster goons — and our guys were just standing there; they didn’t know what to do. It was the union goons who told them they were on strike.

BSB: Was that the one-week strike you were talking about?

Summers: No, that was the couple-hour strike. The last one was in January of this year. The contract expired Dec. 15, and the strike lasted a week — actually five working days. You get $50 a week strike pay, but you have to be out two weeks. The union didn’t tell them that either.

BSB: Were you personally affected during the strike, and how was the relationship between you and the workers after the strike ended?

Summers: I’m not in the union, and I crossed the picket line every time we had a strike. Kathy [Ruppert] also crossed the line.

BSB: Did they hassle you?

Summers: The first time they did.

Ruppert: I got threatened and everything — but not by our men — by the goons. Our guys had to watch what they said and did because we all had to work together again.

Summers: There was a lot of animosity right after the strike. It took a while to heal the hurt between me and all the other employees.

Ruppert: Things were said as we crossed the line that were very upsetting. Still, I remember one night when they were on strike when it was freezing — raining and sleeting — and our owner went out and bought blankets. He took the blankets out to all the workers outside. That tells you a lot about Mr. Chapman.

BSB: The body shop is a profitable part of the dealership, right?

Summers: Yes, but it’s not astronomical. There are only five employees.

BSB: So it’s not as if the union came in here and bankrupted you. The shop has always shown a profit, hasn’t it?

Summers: Yes, but the union has hindered the company somewhat. You can’t make a lot of changes. Every time you want to make a change, you almost have to get the union’s approval. And that’s not advantageous to business. If you want to make a change, you should be able to make a change. You shouldn’t have to get the union involved.

BSB: So that stuff would have to be negotiated in the next contract?

Summers: That’s right — and they’re pretty tough on that stuff.

BSB: So what you’re saying is that if the company treats its employees fairly, there’s no real need for a union?

Summers: There’s absolutely no need. The Chapmans are good people, and they treat their employees fairly. And the guys who are really good workers, they really don’t need the union. As far as compensation and hospitalization and all that good stuff, they’ve always had that. They would have had that without the union.

BSB: So the real advantage to being in the union is to have that extra representation when there’s a dispute?

Summers: Yeah, I would imagine that without the union, a few guys wouldn’t be here. In fact, I can guarantee you that. But then, I can imagine that in some shops, owners probably treat their employees pretty poorly — so a union might help them.

And In This Corner …

Shop steward, Gene Warinski, who’s been the union rep for 15 years.

BSB: How long has the union been here?

Warinski: The union was here when I got here, and I’ve been here 21 years. I think it’s been 24, maybe 25 years.

BSB: How are your men paid?

Warinski: Flat rate — at whatever they were hired at. After the contract is negotiated and the raises are given, they’re given the same raise.

BSB: How’s the relationship between management and the union guys?

Warinski: Recently, the company brought in a new paint company and were using a new paint, and a guy was doing some union work. In other words, all work must be done by a union employee before it can be given or subcontracted out. He was doing union work — and we had to tell him, "Look, a union man has to do it." Other than that, there haven’t been any problems in the body shop.

BSB: Say there is a problem.

Warinski: Well, if there’s a problem, there’s recourse. The guy could come to me, and we have a whole grievance procedure in place — where it goes to his manager first. If he gets no satisfaction, then he comes to me. Then I go to the manager to try to resolve it. If we can’t, then the union itself would get involved and would argue the case.

BSB: So the bodymen get paid for everything they do — there’s no work done free when the insurance company says, "We don’t pay for that"?

Warinski: They have a recourse — they have somewhere to go if they feel they’ve been wronged. To me, that’s a big benefit. Not only is that fair, but it also sets guidelines we both have to live with. And there’s no changing them.

BSB: So, if it’s not on the estimate, then the guys don’t have to do it?

Warinski: Oh no, they’ll probably do it. As a part of our agreement, we never refuse work; we don’t refuse to do anything that we’re told to do. But if we do it, we tell them that we want paid for it. Then they either pay us out of their own pocket, or they get the insurance company to pay for it.

BSB: What are the union dues?

Warinski: They’re figured out by their hourly rate. Take the hourly rate, double it and add $2. Then they split it in half and pay every two weeks.

BSB: What benefits did the union help to get its bodymen?

Warinski: Medical, vacation, personal days, sick days, holidays and a 401k plan that they match up to 4 percent, I think.

BSB: How’s the turnover rate?

Warinski: The body shop is pretty much stable.

BSB: Does the union encourage additional training and certification or does the company?

Warinski: More the company, but the union wants us to keep up with our licenses and things — that’s a part of our agreement to work here, to keep up with the latest trends and information.

BSB: So actually the union does, in a way, encourage the techs to keep up with their training?

Warinski: Absolutely!

BSB: Consolidation is something that’s affecting our industry and its technicians. Do you think that unions would help these technicians and that consolidation may encourage more unionization?

Warinski: Let me put it this way, it’s not the company, it’s not the way the company is run, it’s not the people I work for, but in my mind, I’d rather have a union than not have a union — no matter where I work. [My responsibilities are] in writing. There’s no "one day I have to do this, and one day I have to do that. Or one day I’m getting paid this, and one day I’m getting paid that." Everything is uniform. And I know no one’s going to change them without my OK. That’s why I’m saying the unions are worth it. You know what you have. Whatever this company does — if it decides to lower what they want to be paid for a job — it won’t affect my pay.

BSB: Are there any other shops in the area that are union?

Warinski: Yes, one is affiliated with Amalgamated, and the other is affiliated with Aerospace and Machinists.

BSB: It’s kind of surprising that this is a union shop and you pay flat rate. I thought unions preferred an hourly rate instead of an incentive-based wage scale.

Warinski: They were trying to get them to go hourly, but they’ll never do it. You can’t afford to pay these guys what they’re making, and these guys aren’t going to take less.

BSB: Any final comments?

Warinski: A lot of people complain about the dues from their paycheck, but you have to remember what you’re getting for those dues: vacation days, sick days, personal days, medical, 401k. And you also have representation in case of a disagreement; you have an arbitration process if it goes that far, and you don’t have to hire a lawyer — you have a union to represent you.

And the Winner Is …
Technician Ronnie Reemil.

BSB: How long have you been working here?

Reemil: About 10 years.

BSB: Have you been in the union the entire 10 years?

Reemil: Yes.

BSB: Has it ever helped you in any situation?

Reemil: I’ve never really needed it.

BSB: So are you saying you don’t really need the union here?

Reemil: I wouldn’t say we don’t need the union here — it helps.

BSB: Is the union used as an "insurance," a buffer between management and labor?

Reemil: No, more like for security and benefits. I like that part: security, wage increases, that kind of stuff.

BSB: So there’s no rift between management and the workers? You guys work pretty well together?

Reemil: Absolutely.

BSB: Is it because of the union, in spite of the union?

Reemil: The union doesn’t really play a part. I have no problems with my manager or upper management.

BSB: So, in your situation, the union is irrelevant except at bargaining time?

Reemil: Yeah, exactly.

BSB: What are your union dues?

Reemil: I think it’s $24 every two weeks.

BSB: Since the industry is starting to be consolidated, a lot of bodymen are upset with the way they’re being treated and are talking about joining a union. What would you say to them?

Reemil: It wouldn’t hurt to have a union. I know guys are hurting for benefits and wage increases. I know it’s the bottom of the barrel and there’s nothing here to attract anybody — except for a place like this, where wages are guaranteed and benefits are guaranteed. Benefits are a big thing.

BSB: Looking at it this way, unions could help attract new blood to get into this industry?

Reemil: Yes, I think it would help to attract people.

BSB: What about smaller shops? Shop owners seem to think it would bankrupt them to be unionized. What do you think?

Reemil: I don’t think it would bankrupt them. I think it would sharpen them up and keep them on their toes.

BSB: Would it protect techs from being fired?

Reemil: Yeah, a lot of guys aren’t treated right — including wages and benefits. And with unions, you can’t get fired because they don’t like you that day — and that happens a lot in this field.

BSB: Do you think some slackers would be protected?

Reemil: Of course, it’s going to do that but, overall, I think it’s going to benefit the trade.

Making Sense of It All
After conducting these interviews, I came to the following conclusions:

1. The shop is professionally run by Summers and Ruppert, and they seem to really care for their techs. They feel a bit hampered to make changes because of the strings attached by the union, but they manage to get the work out and make a good profit for the company.

2. Warinski is a union man through and through. And why not? He works for a successful company that’s been unionized since he’s been there, and he feels the working relationship between the union and the company is good enough to spend 21 years of his life there.

3. Reemil seems to be enjoying working for the Chapman family. He must also take comfort in the fact that if ever there was a situation that required assistance, he has the strength of a binding contract and the backing of a large organization to represent his side of an argument.

So what do I think about all this? Well, as long as all the parties involved know what’s expected of them, treat each other like the professionals they are, and agree on a fair and equitable wage and benefits package, it seems that collective bargaining can be a success. Of course, this is just one example.

Other collision repairers say unions could happen in this industry but won’t succeed. "Unions will be good for lower-paid employees, but would kill the incentive for the more productive employees, thus rewarding the lazy people and penalizing the achievers," says Bobby Johnson, owner of B&J Collision, Inc. in Jefferson, Texas. "The consolidators will be very wide open for union activity before anyone else. They’re large companies with money, and the unions won’t waste time with small shops. The large shops in metro areas will be union targets, but most shops aren’t big enough to warrant their interests."

But Johnson cautions those who think unions will make everything better. "Joining a union won’t automatically mean higher rates from the insurance industry, especially if there’s a non-union shop down the road with lower rates. Union shops will be faced with trying to compete and make a profit in an environment that doesn’t reward employees for productivity or incentive. The union shops will be in trouble fast, and I expect the owners to move assets or find another business in a non-union area."

And, while Johnson says unions could benefit some employees, he says that no shop owners would benefit. "The owner will find himself playing games on every decision and, for the most part, owning the business will be a bigger headache."

Strength in Numbers
Ask shop owners today what a five-letter word is that strikes fear into the heart of any business, and many will respond, "Union!" As a technician, I find this kind of ironic when, in fact, many shop owners are aligning themselves with groups like the Automotive Service Association, Automotive Service Professionals and Coalition for Collision Repair Equality to right the wrongs, level the playing field and increase their income by getting paid for what they do.

These sound awfully similar to the complaints collision technicians have regarding their situations, don’t they?

Whether or not mass industry unionization ever occurs is anybody’s guess. This industry has always been somewhat fragmented and divided — and shop owners have always been more like lone rangers than team players. Unfortunately, this lack of unity hurts no one but collision repairers — and actually helps insurance companies and consolidators. And who knows if technicians could organize any more successfully than shop owners have.

Although some may argue that unions aren’t the answer to technicians’ problems, no one would argue that this industry needs more unity. It’s hard to make things happen when no one’s working together or, worse yet, when no one knows what it is they’re working for.

Regardless of how you feel about unions, one thing is as certain now as it was 100 years ago when 19th century journalist/poet George Pope Morris wrote it:

United we stand, divided we fall.

Writer Henry Netter has worked in the collision repair industry for more than 36 years, is an ASE Master Certified Collision/Refinish Technician and works at Auto Tech Collision in Philadelphia as the senior repair technician.

An Insurance Adjuster’s View of Unions
If you don’t know Pat, our spy on the other side, you haven’t been reading BodyShop Business closely enough. Shame, shame. Tsk, tsk. OK, enough scolding. Pat is an insurance adjuster who’s on the side of repairers. Here’s what Pat says about the health-care industry unionizing and what it may mean to the collision industry:

"I think unionization was basically an act of desperation. The health-care industry was driven to it by the insurance industry, and it may very well be something the collision repair industry will need to consider. After all, the insurance companies are using similar tactics to squeeze the collision repair industry aren’t they?

"It’s an unsettling idea. If the larger chains/consolidators were to unionize, would that drive up the cost of doing business enough to make the collision industry lose its economic luster and push these business people to other more profitable ventures? That may sound great to independent shops, but if insurers can out-maneuver the consolidators … Uh-oh! So perhaps independent shops have more cause to be concerned.

"On the other hand, a more secure position with better working conditions certainly would be attractive to techs, and that may help ease one burden by enticing more to enter the trade.

"Insurance people I know don’t seem concerned. I think they look at unionization pretty much the same way as diminished value. It will cost them a few bucks in some instances, but overall, it isn’t a big threat and won’t have a serious impact on their bottom lines. I don’t think [unionization] is expected to happen on a scale that would be seriously threatening to them.

"I don’t know if unionization would benefit repairers. Now, if there were a way to spread it out and include a substantial number of independents, that would raise some eyebrows I’m sure. But as long as the majority of the industry remains as divided as it is, there doesn’t seem to be a serious threat. There would need to be enough shops in a given market involved to apply any real pressure to insurers. In that case, they may need to adjust to that particular market’s conditions, but that seems likely to be fairly localized.

"It seems to me that collision repairers still need to get together on some of the basics. They have yet to clear that hurdle and don’t seem likely to in the foreseeable future. As long as repairers continue to be their own worst enemy and give the insurance industry the advantage, insurers will continue to capitalize and profit off repairers’ mistakes. I keep coming back to the same theme: Repairers need to realize strength in numbers to be effective in pushing the insurance industry in any direction. How to accomplish that? Tough if not impossible. The insurance industry has accomplished a lot with the direct-repair concept alone. Not only did they reduce claim costs, but look at how much that one issue divides the industry.

"I just don’t see a union effort leveling this playing field. I hope I’m wrong!"

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