Tim Ronak, senior services consultant with AkzoNobel Car Refinishes, will be leading two Repairer Driven Education (RDE) sessions at the 2014 SEMA Show: “Surviving the Push for Refinish Reductions – Spot within Panel Survival Kit” and “Getting Paid For Investing in Facility, Equipment and Training.”

Ronak is passionate when he talks about getting paid for your investment as it seems the investment in collision repair keeps going up as a result of the new, sophisticated vehicles coming out.

“There is a lack of financial understanding out there,” Ronak says. “People say, ‘Well, OK, so this aluminum repair stuff will cost me $75,000 to retrofit my shop.’ And the insurance industry’s response is, if you don’t want to do aluminum work, then don’t invest in it. The premise is that you’re not going to get paid any more for that than you do for the current level of work you do. Well, that predisposes that you’re currently being fairly compensated for the work you’re doing.”

Body shops, Ronak says, need to create some type of profitability level that allows them to create a solid, sustainable working environment for an individual laborer. Ronak’s goal with his discussion is to give shops a formula to figure this out.

“The purpose of my dialogue will be for me to lay out some kind of plan or formula where people can type in their numbers and figure out – looking at the investment in training, equipment and labor – what they need to raise their labor rate to,” he says.

Ronak says the industry has been watching the slow erosion of its overall profit margins. Parts, labor and materials is all being squeezed, and labor rate increases are being outpaced by inflation.

“At the same time, the cost of insuring motor vehicles has gone up dramatically, so there is money in the fund to be able to fund our industry, which of course is largely funded through insurance-based activities.

“If you go backward and say we need to generate 75 percent labor gross profit in order to  provide a sustainable and solid environment for any new labor resource, in that cost of labor we need to factor in training and facilities and what does that individual labor unit need in that facilities component for equipment, tooling and safety. One thing we’re not good at is determining how much our fixed expenses go up when we have to invest in new technology.”

As far as Ronak’s “Surviving the Push for Refinish Reductions – Spot within Panel Survival Kit” session goes, he will base his talk on a CD tool he built 10 years ago that showed collision repairers how to push back when insurers ask for modified panel refinish or arbitrary finish reduction because they contend only a portion of the panel is damaged.

Ronak says he believes the SEMA Show is the best place for him to be at to educate collision repairers on the rapidly changing industry.

“I donate my time to go to SEMA because I feel it’s really important to offer whatever knowledge I can to the largest group I can. I believe there are very few venues in our industry that allow for as broad an exposure to both industry education and support and the potential for an existing business to diversify its revenue stream. As the collision market starts to evolve, it will be critical for everyone to truly look at the personalization aspect of transportation as a viable revenue alternative. One of the best if not ‘the best’ is SEMA because it brings all the specialty equipment information as well as collision repair tooling and products and now the RDE series of collision- focused training under one roof. With change occurring in the collision industry along with the auto manufacturing industry, it’s almost impossible for a single individual to keep up with all of them – and the broadest opportunity to see all those changes in one place is SEMA.”

Ronak also believes the Society of Collision Repair Specialists (SCRS) has done a superb job putting together the RDE sessions, choosing the speakers and selecting the most relevant topics of today.

“I think the SCRS creating RDE was a stroke of brilliance,” he says. “It was something much needed in that it’s collision industry-focused, and it’s fantastic that the industry supports it the way they do. SCRS does a very good job of selecting the topics that are of interest to the industry but also in organizing the resources and the expertise from the industry to present on those topics.”