Creating Disharmony - Collision Repair Magazine

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Volume 6

Issue 1

Creating Disharmony

Written by David Gold

Saturday, 17 March 2007

Fragmentation is leaving the industry vulnerable.
I recently got to talking with one of our long time collision repair customers who had some strong things to say. To get at the untarnished truth I promised her total anonymity. For the sake of convenience we will call her Alice.
Alice is a very proactive repairer, continually educating herself on new technologies and embracing them.
For Alice, work is not just a means to an end but rather a true love for the satisfaction of making sure the car is repaired to manufacturer specs.
The entrepreneurial spirit that her family felt over 50 years ago when they got in the business is now slowly fading. The flow of satisfied customers and repeat business has subsided and it   is not because of the quality or their workmanship but rather due to the modern day era of DRP’s or as Alice calls them “Dirty Rip–off Programs.”
{quotes}It appears that a stronger need for autonomy needs to be nourished at all levels in the repair process. {/quotes}
Alice believes that the fragmented nature of her industry has essentially created a platform for the insurance industry to exert control, creating disharmony in the business.
The issues as Alice describes them have to do with how shops are compensated by the insurance company.
“The insurance industry dictates how much we can charge them for our services,” says Alice. “If you tell me I have to charge fifty dollars per hour for my services, this can’t work.”
Alice feels that if the amount a professional collision repair centre can charge is dictated, this will simply lead to “creative accounting” to re-coup money lost.
It is clear to me that any spirit Alice may have felt in the repair process is gone. The struggle for profitability and the feeling of helplessness seem to have overcome her.
It appears that a stronger need for autonomy needs to be nourished at all levels in the repair process. Most troubling is that independent repairers do not feel like they are part of a team in the repair process.
Alice goes on to note that insurance companies often “Instill fear in the consumer.” She has heard too often customers explaining to her that they “...don’t want their insurance company to give them a hard time.”
So what’s the answer to these industry woes and what would Alice suggest be done? For starters she says, “We have to fight back. The affected shops must fight back to avert this domino effect that is taking place.”

complete reversal
Alice believes that there needs to be a    complete reversal of the compensation methods for collision repairers. The existing situation leads to corruption and creative accounting so collision repairers can make a profit.
“Insurance companies are so powerful that they have convinced customers to drive farther and farther to get estimates,” says Alice.
As an independent Alice also feels that the provincial government needs to get involved to curb all unfair business practices in her industry.
Interviewing Alice opened up my eyes to the serious issues facing the industry today. It is her contention that part of the problems in her industry stems from DRP lists that fragment the industry as a whole and hold it back from growing.
To sum up, Alice has noted an increasing trend in cars being written off. This is not good for anyone.
To me it seems logical to reward repairers heavily for fixing and saving cars. At the same time insurance companies could also rate the shops on many other metrics such as cycle time, rental car costs and usage of recycled auto parts.
Having the opportunity to investigate and critique all levels of the collision repair process has led me to conclude that the existing situation is underachieving on a grand scale. This is not a pretty scenario for any of us.
Insurers have said that the objective is to make sure vehicles get fixed. Repairers and recyclers could not be happier to hear this.
However in order for any harmony to exist we need a sustainable solution that will foster the most economically feasible collision repair. One way or the other the entrepreneur will fight back. When repairers feel as though they have become cheap labourers we know we are in trouble!!
More effective solutions need to be fostered with respect to the industry in general that inspires all of us and allows us to reach our business objectives   otherwise we will continue to be part of an industry that is depressed.

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