By Jeff Sanford
Calgary, Alberta — August 8, 2016 — Every collision repair industry executive wants to make their business stand out. One way to do this is to find and exploit a niche sector in the wider industry. Doing so allows a business to create a unique model. Few in today’s collision repair industry have found as unique a market as Western Paint and Body Works has. The one-time heavy truck collision repair facility is one of the few shops in Alberta to focus exclusively on the recreational vehicle (RV) market.
If you thought keeping an auto-based collision repair center on track and out of the ditch was a challenge, you’ve never had the humbling experience of putting a 45-foot home on wheels back together. For those with exceptional skills, the RV sector just might be the ultimate test.
Just ask the General Manager of Western, Steve Ray. In a recent interview, he took the time to explain how exactly the company came up with the idea of moving into the RV collision repair space. The decision came after several years of dabbling in other sectors, including heavy truck repair and heavy equipment repair.
Western occupies a huge 12,000 sq. ft. shop on 1.3 acres in the Foot Hills industrial park in Calgary. “It’s humongous. We’re proud of that,” says Ray.
Humongous is right. There is a massive 64-by-14 foot paint booth, along with 45-foot and 27-foot booths. Ray wanted to fill those bays and put the equipment to use. But he didn’t want to have to worry about DRP programs.
He explains, “What we’ve seen in the industry out here is a strong push from the insurers to go to direct repair programs. In the early 2000s there was no DRP work in the heavy truck collision repair space. Ten years ago about 30 percent was DRP. This year that number is predicted to be 76 percent. That’s a huge change. If you’re not on one of those networks, the amount of collision work is really small,” he says.
Venturing out
Ray started looking for a business line that featured large companies running big fleets and that carried their own insurance. The first idea was specializing in motor coach and school bus collision repair. “I felt there was an opening in that market for a shop that could provide a higher level of service to the discerning customer on their motor coaches,” says Ray. It didn’t really work out. Another experiment followed.
Western took on a contract to work on heavy construction equipment. In the 2000s, when the price of oil was higher, and the energy sector in the west was booming, the company agreed to paint and prepare more than 40 trailers, all of which were piled up with oilfield equipment. Western was at the heart of the action. “We ended up in a fleet situation. These are self-insured long-haul companies that have warehouses, oil equipment transport companies and the oil companies themselves. They needed our services,” says Ray.
The trailers were 55 feet long. Western had the parts delivered on a pallet, did the painting and final construction. “We painted a huge number of frack pumps, 42 of them,” says Ray. “It’s a very challenging bit of work in terms of equipment. The physical exertion by the workers is extreme.” Pallet upon pallet of loose parts arrived in the shop and had to be painted. The shop began running four booth cycles a day.
“These are not just 55 foot truck trailers. There are radiator units on them, huge diesel engines, a giant rad enclosure,” says Ray. The engines are six feet high, 12 feet long, and had to be hand prepped before going through a tri-stage painting process. “There were a lot of little parts around. We were putting in 240 hours on single units, and were turning them around in a week and a half,” says Ray.
The shop came up with a strict process for painting. “We systematized everything. When the loose parts were being sandblasted, the trailer was being prepped. When the trailer went in the booth, hand prepping began on the loose parts,” he says.
The trailers went into the largest of the shop’s three paint booths. The facility is equipped to handle a massive amount of refinishing, but the high volume frack work turned out to be too much work. “We had two shifts going. We were bringing the paint in by the pallet, hundreds of litres at a time. It was really hard on the equipment. Our breathable air systems were doing ten times the work than what an average shop would. I looked at the cost of maintaining the facility … it’s a grind. You’re going all the time,” says Ray.
When the contract was complete Western assessed the opportunity and the costs and found the benefits didn’t make it worth the effort. “We said it’s not panning out like we want. The costs are so high. We began to look at changing our direction,” says Ray.
He did some research. He spent a year and a half talking to various people. “I wanted to determine what the market needed. I talked to independent appraisers. My conversation with these guys was, ‘I know the car stuff is going DRP. That’s cool. But is there work that isn’t DRP-dependent? One guy said, ‘Sure there is, but it’s the work that nobody wants …’, I thought, ‘Let me take a look.’”
Moving onto RVs
Ray investigated the RV sector; he found it was ripe for a serious competitor. The fundamentals of the market also seemed solid. The baby boomers are retiring in ever-greater numbers. Many of those are hitting the road in RVs. This is especially true in western Canada where the market for RVs is especially large. The answer to Ray seemed obvious: “We have this big facility. It was already set up as a heavy truck shop. We’ve done a number of RV units at the dealership level. Speaking to people it turned out there was an opening here. I opened up a new avenue. We found a market where there aren’t too many guys. We really chase the RVs now,” he says.
He admits it’s been an adventure. “I can tell you the reason no one does it … It’s damned near impossible.”
The number of RVs on the road may be larger than ever, and the vehicles are bigger and more complex. And they are all packed with the features of an everyday home. Repairing one of these home on wheels is one of the bigger jobs in the industry. There’s a lot that can go wrong.
“If someone cuts a corner too fast and hits a post all these aluminum sub-frames are crumpled. There are steel components that get bent. The HVAC and sewage system have to be repaired. Talk about getting dirty, you should see what happens when the sewage system is damaged,” says Ray. “There is a lot more than just ‘remove and replace’ being done here.”
Jobs are so complex that a cycle time of four weeks is common. Sure, the bills are big, but so are the headaches. Ray goes into detail about some of the eccentricities of the market. Each vehicle is constructed by hand in a factory. This means that at, “any given time, at any point in the repair process, you can come across human error. There will be three different types of screws holding a part on. They’ll have Philips head screw here, a flathead there,” says Ray. “The door gaps can be huge.”
Repairing one of these improvised vehicles often means techs end up bringing it up to factory quality for the first time. Because the bills are huge, insurance companies want to see all the work being done. Techs at Western often end up repairing an RV to a state that is even better than it was new. “Often we have to get it better than the factory,” says Ray.
Not just mechanical help
Techs also need to have a wider range of skills than would be found in other shops. Often a job will include wood and carpentry work. “We’ll get your coffee table back to the way it was,” says Ray. Someone in the shop needs to know how to service an electrical system similar to a residential home. Modern RVs have wall outlets, air conditioning, cable satellite television, refrigerator, patio awning systems with a power lift, hot water tanks and now even heated floors. It all has to be repaired along with the standard vehicle 12-volt electrical system.
This is a lot to keep track of on one of these jobs. “I’ve got guys who remove and service the tech. I’ve got guys that all they do is remove trim. Some of these RVs will have 15 power locks and they all better work. I’m lucky to get quality employees. But every day is a challenge. There’s never a boring day,” says Ray.
Even hail damage becomes a huge hassle when it comes to RVs. On the roof of a modern land cruiser are satellite dishes, vents, antennae and awnings. It all has to be fixed, even if original replacement parts can’t be found, which is often the case with these vehicles. “Sometimes you’re dealing with an aftermarket roof and so you can’t go to the manufacturer … and then you find the maker doesn’t exist any more. In those cases we have to go do the next best thing. But how do you communicate that to a client? They don’t understand why you can’t just put it back like it was,” says Ray.
The hassles are endless, you can be sure. And then there’s the oversight on the part of insurance companies that goes far beyond the auto collision repair sector. “It’s a different estimating procedure than the one in auto collision. There, repairers have a very set process for estimating cars. You’ve got Mitchell and Audatex systems where everything is automated,” says Ray. This is not the case here.
“In this industry every repair involves a conversation with the insurer or third-party appraiser. Every repair job has an independent review by the insurer, which is an old school way of doing things, but there is no other way to do it. I don’t foresee any automated system being developed because the industry is pretty small. The industry likely doesn’t warrant the investment,” says Ray.
As result a lot of decision making is still done by humans on the shop floor. “It’s very different from a management perspective. There’s a lot of labour in managing one of these jobs. You’re tracking down parts, many of which were only manufactured for one year. If you can’t find the right part you have to an alternative. There is a lot more decision-making regarding what replacement part to use. Administratively there are a lot more decisions to be made,” says Ray.
He added, “You can’t just call up and say ‘I need this or that.’ There’s always a catch. One out of three times the part will have already changed and been discontinued. Knowing who to talk to when you call up the manufacturers, that’s 50 percent of the battle.”
Of course, once the repairs are done, the battle is only half over. Once the RV is back together it has to be painted. Which is where things really get interesting.
Repainting an RV after a collision requires a highly skilled painter. Striping packages offered by the manufacturers are more complex and difficult to replicate than ever. High-end models will have five colours with fades and stenciled outlines. There is 45 feet of body to cover. There can be a blend of colours covering 10 feet of that. “You’ll have red in the middle, grey outside and then fade that together. This is a finish quality you’d have on a high-end car,” says Ray. “The standard is so high. It has to be. And so you have to develop the skills to match that. If you’re passing over the money for an RV you want it shiny, something you can show off. When it comes down to it, it’s a high quality finish. The challenge is reproducing that.”
The big hassle when it comes to painting is that the manufacturers will change the paints used on a model line almost yearly. According to Ray, “The manufacturers will buy from the cheapest producer that year. One year it’ll be AkzoNobel, then Sherwin Williams, then another.” Many US manufacturers are also non-compliant in terms of VOC standards. “Our problem is that they are using custom colours that are non-compliant and so I can’t get them here. That can be a problem,” says Ray.
Western has been lucky in terms of staffing. The company has managed to find some “really skilled techs” who like the challenges and diversity of the work. The head painter comes from Revelstoke where he was painting helicopters.
There are benefits
The big benefit to working in this sector is that the work is remarkably steady. RVs are expensive vehicles. Relatively few of them are written off. Which is different than the auto sector these days. “We’re looking at a lot more repairs these days. The thing is that the actual cash value, or ACV, is high. If a GM car is worth $10,000 and it needs $6,000 in repairs, the repair might not be financially feasible. When you’ve got an AVC of well over $100,000 and your repair is $10,000, that’s a drop in the bucket compared to a new vehicle. The repair size is inherently large in this sector,” says Ray.
Another bonus: In contrast to what one might think, the work in this sector is spread out over the entire calendar year. “It’s a funny thing. The industry is really strange. Some use the RV for the summer and then drop it off at the body shop in the fall. But we also have the ‘lifers’, the ones who are living in their RV year round. They would prefer to be displaced from their home in the summer. They might have to stay with family and that can be easier to do in the summer. So we get work in that season as well,” says Ray.
The snowbirds leave in September and come back in the spring. That’s when they’ll get their RV fixed. “They’re going to get their stuff fixed up here, once they are home. Five thousand dollars worth of repairs down south is equal to ten grand up here,” he says. The summer also brings work from the so-called weekend warriors. These are the guys who rent a massive RV for the weekend and drive it from one campground to the next. They invariably come back dented and scratched. “We slow down around Christmas. But that’s about it,” says Ray.
Another neat little bit of business in this sector involves check-ups on RVs that have been delivered from the factory. RVs can’t be shipped. They have to be delivered to the buyer. Typically an RV is driven up from a manufacturer in say, Indiana, to Alberta in spring. That trip can put some wear on an RV and often there will be some road damage at the end of the trip. But the manufacturers also want to deliver a pristine vehicle to the buyer and so the driver will bring the RV into the shop after the delivery run for an inspection just before it goes to the buyer.
Any minor work that needs to be done is taken care of, ensuring the RV looks like new and is dent-less when it’s delivered to the customer. “The clients are spending hundreds of thousands of dollars. It has to be in perfect shape when it arrives. It’s good warranty work. You take care of the cracks and the chips that can occur on that delivery trip,” says Ray.
Western techs often do work repairing roofs damaged from the high amounts of UV sun in the south. “You’ll have to do refinish work and polish peeling paint,” says Ray. “We get that a lot. But you do whatever can be done to make this major investment look good. Owners are hypercritical when it comes to their RVs. When the vehicles comes out of the garage, if they’re grinning you’re good. We don’t have many frowning customers, but we have a few. Sometimes there are repairs you just can’t do. You’re limited by what’s available. You have to explain to the customer that sometimes there are issues, maybe the AC units you had on there are no longer built and that they’ll just have to accept what’s on there.”
He added, “Customer education is important. You have to explain why this is the best replacement. You hope that they have realistic expectations. But what can you do? These people are fussy. They wash their RV by hand. They live in it. These guys know these things in-and-out. There is a reason not many shops are doing this work. It’s a unique business, that’s for sure,” says Ray. “It takes a certain amount of passion and pride in your ability to do this. You have to want to do well. That’s the spirit and attitude we’ve created in the staff. It’s a unique place in the collision repair sector. It’s not cut and dried like many DRP-based repairers. That was my sell for my staff. Use the skills you’ve developed.”
How many other shops are doing similar work? Ray suggests a handful. “My understanding in talking to industry people is that there are maybe a half-dozen in Alberta and that I’m one of three specializing in this,” says Ray.
He sees other shops getting into the sector down the road. But he also sees those shops getting out again as soon as they realize how difficult the work is. “They get in, and then they get out. It takes dedication and some love. But it’s good business. The people in the RV business are good people,” he says.
Western has stayed in the game, partly by putting such a huge premium on client satisfaction. “The thing I cannot stress enough: Every repair is a ‘make it or break it’ thing with the owners of the vehicle. The problem with DRP in my view is that it takes the focus away from the quality of the repair and focuses only on repairer expense. You’re working for the insurers and all they care about are numbers. But it’s the person who owns the car who cares the most, and that’s the person you have to satisfy,” says Ray.
He talks about the importance of listening to the customer the first time he meets them. “At that initial meeting and appraisal I try to be aware of what it is the owner is telling me. I really try to listen to what they’re trying to tell me. That’s the thing … that’s the difference between a customer-focused approach and a production-based approach. I think that’s important. I’m interested in carrying on this business. It started back in 1989. It’s important to me we build a reputation for doing good work,” he says.
