and Looks to Exit Industry Stage Right��������

At Autobody News, we get emails and letters every week from auto body shop owners all over the country. In most cases, they’re either venting about the industry or promoting themselves.

We like being a sounding board and learning from shop owners and managers to learn their concerns and what’s going on in their particular region.

Recently, we received an email and a phone call from Greg Rajczi, owner of Ken’s Auto Body in Galway, NY. He started in the industry as a young man working for his father and later his uncle, Jim Rajczi, at Jim’s Auto Body in Hyde Park, NY.

He learned every aspect of the business from his dad and his uncle and eventually took over his father’s shop 13 years ago. He cares a lot about his profession as a body shop owner and that’s why he’s not happy with the current state of the collision repair industry, in New York and nationwide.

He’s been running a successful one-man show since day one and is used to making a profit, he said. But now multiple factors are impeding him. The rising cost of materials, low labor rates and the insurance companies steering customers all are taking their effect.

“A lot of shop owners are dealing with these issues. Most are silently struggling and even consider closing their doors. I don’t foresee a great future for the auto body business unless things change,” Rajczi said.

One important issue on Rajczi’s mind is the fact insurance companies are steering car owners to their preferred shops, something he encounters every week.

“I don’t have a tow truck, and if I had a dollar for every time the tow company steered my customer elsewhere, I’d be rich,” he said. “If the customer can drive their car here to my shop, I can get the job. But, in the winter, for example, when the cars have to be towed, I lose them. Once they tow the vehicle to their lot, the insurance companies can steer them anywhere and they usually do.

“They’ve become sophisticated and know exactly what to say in order to scare the owner of the car. They say the repair won’t be under warranty if I fix the car. It’s a lie, but most people don’t know that.”

When he’s able to fight off the steering and get a car in his shop to fix, Rajczi then has to fight to get paid for the work.

“The insurance companies work really hard to suck all of the profit out every job,” Rajczi said. “We’re already struggling with higher costs for everything and then they’re going to sit there and pick away at the estimate? Ten years ago, a gallon of house paint cost $30 and now it’s more like $100. Techs used to make $20 an hour, but how can they survive anywhere in this country at that rate? They need to be I-CAR trained so that they can work on the cars today, but it’s hard to pay them a fair wage with the cost of parts and materials and the insurers trying to save every penny.”

The labor rates need to reflect today’s prices with inflation and other factors, Rajczi said. With the high cost of parts added to the fact insurers will wrestle without exception on every repair, every body shop has to deal with low labor rates.

“They’re all over the road with these rates, it’s crazy,” Rajczi said. “State Farm is at $65; GEICO is $48, and Allstate is at $52. They say they poll shops in each area, but why shouldn’t State Farm’s rate be the standard? If you own a shop, you know that the rate should be more like $85 to $100. So before we even touch a car, we’re in a hole caused by our labor rates which are ridiculously low.

“I tell the young kids, don’t get into this industry because you’ll never get paid enough,” he said. “This is not a good career choice— go to college but do anything other than this. With costs spiraling and DRPs grinding away on each repair to save pennies, body shop owners

Maryland

MINI of Montgomery County

Gaithersburg 240-238-1204 Parts (240) 238-1493 Fax M-F 7:30-6:00; Sat 8-4 minipartsmd@ miniofmontgomerycounty.com

New Jersey

MINI of Ramsey

Ramsey 888-30-PARTS 551-777-5605 Parts (201) 760-5072 Fax M-F 7-6; Sat 7-4 cbetsch@driveprestige.com

Choose Original MINI Parts.

The Dealers Below Are Original MINI Parts Distributors

New York

Keeler MINI

Latham 877-553-3909 518-785-4197 Parts (518) 785-4710 Fax M-F 7:30-6; Sat 8-4 miniparts@keeler.com keelerMINI.com

Pennsylvania

MINI of Allentown

Allentown 610-820-2950 Parts (610) 336-8125 Fax M-F 8-5:30 parts@danielsbmw.com