Clark's Corner: It's Classified

It’s Classified

After all these years of watching collision repairer licensing efforts, I still think the solution is to do the absolute best job your shop can and let the market punish the poorly run competition.

clark

“My body shop has better equipment, better trained techs, more DRP relationships and higher CSI. Therefore, my shop should be paid more per hour than my competitors who have none of these things.”

Ever heard that before? I have, starting 37 years ago and continuing every few years since then. Classifying or licensing shops based on those criteria appeals to shops that have spent money on and invested in expensive equipment and technician education. Historically, several things stand in their way.

Establish and Enforce

First, some legally recognized authority has to establish and enforce the standards and regulations to be used to segment the universe of shops. Whether politicians or bureaucrats, my experience is they’re reluctant to hinder, restrict or forbid any U.S. citizens from making a living. In addition, staffing the entity responsible for inspection and enforcement is expensive. Secondly, the main money sources for our industry (90 percent of collision repair is paid by insurance) are interested in keeping their repair costs low. Paying more per labor hour than a competitive repair shop down the street is a tough sell. Repair costs are much easier to influence than injury costs from the insurer perspective.

$25,000 Entry Fee

The first time I was aware of a concerted effort to stratify body shops as good-better-best or class A-B-C was when the unicoupe automobile was brought into mass production in 1979. The 1980 model year General Motors X-Body (Chevrolet Citation) put more of these frameless cars on the road and in shops than ever before. The cost of a suitable device to hold, pull (and most importantly) measure the damaged auto was about $25,000.

In 1980, way less than 2 percent of the cars on the road were unicoupes (no perimeter frame, three-sheetmetal boxes), and it took a body shop with lots of foresight and good credit to acquire one of these pieces of equipment.

Rightly, to my thinking, the shops that did spend that money wanted to be recognized for their investment. In several states, associations petitioned their elected representatives or insurance commission members to establish classifications for collision that would distinguish them from the floor pot pulling post and tape measure shops down the block, and they met with little success in establishing legal constraints. (They did, however, meet with financial success).

We Can Do It

Over the years, the effort to establish rules or criteria for body shop grading has arisen many times in many states. Almost without exception, the shops that have acquired specialized and expensive repair equipment and/or specific and exact training ahead of their competition want to be rewarded for their investments. As a guy who sold the original $25,000 unicoupe frame racks and benches, I was – and am – wholly on board with that idea.

Finding a suitable regulatory authority that could delineate and enforce those desires remains a big problem. Is it the state insurance commission? Is it the state legislature? Is it the insurers themselves? Can the members in some local shop association who test and grade their own members be enough to get paid more? The answers remain elusive.

With all the extraordinary changes in auto construction these days, shop licensing efforts are on the rise once again. New and expensive equipment to join disparate structural materials will be required. Required tools like self-piercing rivet guns or UV-cured adhesive systems are expensive and currently used on just a small portion of the nation’s fleet. If top shop licensing and compensation differential efforts are to succeed, they’ll have to be more compelling than in the past.

OEM Help

As the world’s automakers scramble to make lighter, safer, cleaner and more fuel efficient vehicles, their engineering solutions become more diverse. One possible arrow in the current shop classification campaign is increasing support from the OEMs.

Currently, high-dollar European car companies are adamant about having the sophisticated aluminum engineering and exact assembly tolerances in their cars repaired only by factory-trained and suitably equipped shops – mostly, of course, their own dealerships. Fair enough. I don’t want my $100,000 Jaguar or Audi fixed with a torch and a log chain either.

Smart car companies (currently Ford, for example) will offer plentiful repair training in their OEM-approved process to independent body shops too. Ford dealers couldn’t possibly fix all the collision-damaged Fords if they wanted to and need happy Ford owners who had their damage repaired elsewhere. Showing other shops how to do it is a smart move.

But Your Honor…

Body shops making a case in a law or regulatory courtroom that new vehicle assembly techniques require certain equipment and technician training will be helped by the OEMs’ confirmation and support. Then, we just have to get insurers to agree to pay those licensed, equipped and trained body shops more money.

I’m hopeful that future collision repair regulations will enable the best equipped and best trained body shops to charge more money for their work. In the meantime, they’ll have to justify their investments the same way we did in 1980 – by completing the repairs correctly in less time than allowed. A trained tech using the right equipment can complete the repair in much less time than the shop down the block without that equipment and training. One lesson I learned early was that a quality repair within spec could be done by a talented repairman NOT using the suggested equipment – but it always took longer.

For example, those original $25,000 unicoupe repair systems had a go/no-go measuring tool. When the pin hit the hole or the laser hit the bullseye, the tech stopped pulling and moved on. The same result could be achieved by ill-equipped shops, but they had to pull, cross measure, pull, cross measure, etc., until they had the dimensions back to spec. An investment today in new equipment of any kind should always include the business math to pay for it. Back in 1980 when the door rate was $30 per hour and the insurance company paid for 12 hours of structural repair, the shop with the cool measurement tool could do the job right in six hours. That extra $180 helped make the payment on the device. It still will.

Free Market

Until we can find the appropriate regulators, decide on the exact shop requirements and establish all the enforcement and penalties, we’ll just have to go with the free market. The body shop with the right education and tools will complete the same repair faster and better. Mrs. Smith will be happier, and their shop’s CSI will rise. They’ll complete the job in less time and deliver a better result, so the insurers will assign them more work and our business rolls on. After all these years of watching collision repairer licensing efforts, I still think the solution is to do the absolute best job your shop can and let the market punish the poorly run competition.

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