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January 2013//Vol. 32 No. 1
www.bodyshopbusiness.com
The Best Idea I Ever Had Collision repairers share the inspirations that catapulted their businesses to the next level.
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Inside
January January 2013
Vol. 32 No. 1
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ON THE COVER The Best Idea I Ever Had Top collision repair experts reveal the ideas that took their businesses to the next level.
FEATURES
32 Bonding Time TECHNICAL
Following automakers’ recommended repair procedures when using adhesives is critical to consumer safety and quality repairs.
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MSO/CONSOLIDATION GUIDE CONSOLIDATION What’s Your Exit Strategy?................................................................53 Sell your business on your own terms.
SHOP PROFILE The Doctor Is In................................................................................58 Global Collision treats its customers like patients.
VIEW FROM AN MSO Eight Stores and Counting ................................................................62 Eight-store collision owners Ron and Dan Nagy recount their growing pains and the lessons they learned from them.
SHOP TALK Editor’s Notes
6 8 Publisher’s Perspective 10 Clark’s Corner 14 Web Presence Management
Gen Xers and Gen Yers are light-years apart.
A full slate of engaging editorial awaits you in 2013.
NEW!
Guns and “dart” gave industry veteran Mark Clark some early lessons.
BODYSHOP BUSINESS (ISSN 0730-7241) (January 2013, Volume 32, Number 1): Published monthly by Babcox Media, Inc., 3550 Embassy Parkway, Akron, OH 44333 U.S.A. Phone (330) 670-1234, FAX (330) 670-0874. Copyright 2013 Babcox Media, Inc. All Rights Reserved. Periodical postage paid at Akron, OH 44333 and additional mailing offices. POSTMASTER: Send address changes to BODYSHOP BUSINESS, P.O. Box 13260, Akron, OH 44334-3912. Member, BPA Worldwide
Resolve to market your business better in 2013.
DEPARTMENTS Guess the Car ....................................................................................4 NASCAR Performance ......................................................................18 Industry Update ..............................................................................20 Tech Tips ......................................................................................22 Product Showcase............................................................................64 NEW! The Shop ............................................................................68
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Guess
the Car
SOLVED!
Reader Contest! Win $50! What vehicle MODEL does this picture represent? Fax your guess to (330) 670-0874. Include name, title, shop name, city, state and phone number. Or submit your guess with our online contest form by visiting bodyshopbusiness.com/guessthecar. The winner will be randomly selected from correct entries and awarded $50. Entries must be received by Jan. 31. *Only one winner will be selected. Chances of winning are dependent upon the number of correct entries received. Employees of Babcox, industry manufacturers and BSB advertisers are not eligible to enter.
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#117 See the February 2013 issue for winner of Guess the Car #117.
Trailblazer = (Chevy) Trailblazer
!
WINNER #116 Allen Ott, manager, Foster Chevrolet Cadillac Collision Center, Sandusky, Ohio
#118
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Super B = (Dodge) Super Bee
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Editor’s
Notes
Publisher
S. Scott Shriber, ext. 229 sshriber@babcox.com Editor
Seeing the Light n incident happened the other day between me and my brother that was one of the clearest generation-defining moments I’ve ever experienced.
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My brother, Danny, is 23 and defined as a “Millenial,” or Generation Yer. I’m 41 and part of Generation X. He came over my house to use my VCR to convert my parents’ old family VHS tapes to DVD, which was going to be his Christmas present to them. I was rooting around in a closet looking for an old remote (don’t ask what it might have been doing in the closet; I don’t know) and realized I needed a flashlight. I reemerged in the living room and said, “I need a flashlight” and starting pawing through the drawer where last I remembered putting my big, black, C battery-powered Maglite. “Hey,” Danny said. “Did you know there’s an app now that
can turn your cell phone into a flashlight?” He then proceeded, after a couple taps on his phone, to beam a bright light out of the top of it. I looked at him like he had three heads, but I didn’t want to totally burst his bubble. “That’s really cool, but I think I’ll stick to my trusty Maglite,” I said, lifting the behemoth that could double as a weapon above my head for added effect. And then it occurred to me: my brother represents the next wave of customers who will come into your shop. He thinks there’s an app for everything. What if you don’t have an app where he can check on the status of his car or contact you at the scene of an accident? What if you don’t have a way for him to request an estimate online? It’s likely he’ll pass you up. What if a 23-year-old technician struts into your shop to start his first day of work? Do you have an environment that will challenge and engage him? One where he’s encouraged to solve problems and look for “better ways” to do things rather than do things the old way “just because?” If you haven’t yet thought about this, it’s high time you do.
Jason Stahl, Editor Email comments to jstahl@babcox.com
Jason Stahl, ext. 226 jstahl@babcox.com Associate Editor
Gina Kuzmick, ext. 244 gkuzmick@babcox.com Contributing Editors
Charlie Barone, Mitch Becker, Mark Clark, Mark Claypool, Erica Eversman, Tom Ferry, Hank Nunn, Carl Wilson Graphic Designer
Lisa DiPaolo, ext. 281 ldipaolo@babcox.com Advertising Services
Kelly McAleese, ext. 284 kmcaleese@babcox.com Director of Circulation
Pat Robinson, ext. 276 probinson@babcox.com Director of eMedia & Audience Development
Brad Mitchell, ext. 277 bmitchell@babcox.com Subscription Services
Ellen Mays, ext. 275 emays@babcox.com Tel: (330) 670-1234 Fax: (330) 670-0874 Website: bodyshopbusiness.com Corporate
Bill Babcox, President Gregory Cira, Vice President, Chief Financial Officer Jeff Stankard, Vice President Beth Scheetz, Controller A limited number of complimentary subscriptions are available to those who qualify. Call (330) 670-1234, ext. 288, or fax us at (330) 6705335. Paid subscriptions are available for nonqualified subscribers at: U.S.: $69 for one year. Canada/Mexico: $89 for one year. Canadian rates include GST. Ohio residents add current county sales tax. Other foreign rates/via air mail: $129 for one year. Payable in advance in U.S. funds. Mail payment to BodyShop Business, P.O. Box 75692, Cleveland, OH 44101-4755. VISA, MasterCard or American Express accepted.
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Publisher’s
Perspective 2013, Here We Come he New Year is upon us, and if you read my December column, I’m sure you have all done your planning and are working at attaining the goals that you have set for yourselves and your businesses. That is no small task, and if you have already done it, my hat is off to you. If not, there is still time to look at what you want to do and make a plan. As the ad says, “Just Do It.”
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In the publishing business, it’s imperative that we plan out a year in advance. That gives us the ability to have the best editorial available for you from the most knowledgeable sources. Of course, we also need to have the flexibility to add in pertinent stories on issues that crop up throughout the year. We all know in this business and economy that there will be lots of changes and hot topics during the year. You can count on BodyShop Business to be on the scene and have the most up-to-date information to help you run your business. That’s why we have someone at all major industry events and regularly attend the Collision Industry Conference (CIC). If you’re looking for up-to-date information, visit us on the Web at
BodyShopBusiness.com or sign up for our newsletter. In addition, all previous content from past issues is available free of charge on the website. We feel it is our job to be the best resource possible for our readers. We make it our mission to constantly bring you the latest products, procedures and trends in our industry. This year, we have a jam-packed lineup covering everything from cycle time to succession planning and everything in between. Technical articles will cover subjects like: curing technologies, hybrid material construction, radar sensing and, of course, waterborne/low-VOC updates. If you need to know about it, you can count on us to have the information you need. Whether you’re a single store owner or a multiple shop operator, you’ll find relevant and productive information on our pages. However you choose to get your information – magazine, Web or enewsletter – we have you covered. If you have a particular subject you would like to read more about, just drop Jason Stahl or myself a note and we can research it for a future article. Thanks for being a loyal reader, and have a great 2013!
S. Scott Shriber, Publisher Email comments to sshriber@babcox.com
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Clark’s
Corner
By Mark Clark
Guns and
‘Dart’
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empus fugit” is Latin for time flies, and as I write this first 25thyear anniversary column, it certainly seems so.
In the Beginning » My auto body career began in 1970 when I opened a paint, body and equipment (PBE) jobber store with my dad. In 1986, I began speaking about auto body topics to manufacturer, jobber and shop personnel (mostly to anyone who would listen to me!). In 1988, I wrote my first article for BodyShop Business. I’m certain neither the magazine nor I knew I would still be at it in 2013. It continues to be a great ride. Industry Issues » Some industry issues today were present in 1970: insurance company influence, color match, paint and material costs, safe repairs, clean paint work and even cycle time (although we didn’t all call the time the car spent in the shop by that name). Many of my original “Paint Shop” columns were about getting deliverable paint work on the first try. I remember being at a national paint company’s school in 1970. Eating dinner the night before the class began, I spotted another guy wearing the paint company logo and we struck up a conversation. He was from way down South and had a real drawl. I asked him what the biggest paint problem was in his market. He said it was “dart.” I was an Iowa boy and didn’t understand how darts played into collision repair. Was this like an English pub game? From both my puzzled expression and my verbal “Huh?” he repeated the issue was dart. Seeing that I still wasn’t getting it, he pointed at the floor and said again, “Like 10
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on the ground – dart!” “Aha, you mean dirt,” I replied. “Yes,” he said, “dart.” And sure enough, controlling the dirt in the paint finish was a problem in 1970 and continues to be one in 2013. Moving more air past waterborne finishes to drive out the water also moves more dirt around the booth cabin. As always, careful prep makes for clean paint work.
Safe Repairs » Safe repairs for both the vehicles and the technicians are still critical issues today, too. In the early 1970s, I attended the Kansas Jack School in the remote (and “dry”) town of McPherson, Kan. (I was, and continue to be, a big proponent of industry education. You don’t know what you don’t know. Attend some classes and find out!) I was the only jobber there and spent a rewarding week learning about accurate and fast structural repair. Early on the second morning of class, Larry Booker, who owned Kansas Jack, came into class wearing the local cowboy duds – belt buckle the size of a quart can lid, pearl snaps on his shirt, embroidered arrows around his pants pockets and fancy boots. As he walked up the aisle between
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»| Clark’s Corner |« the class tables, you could see he had a chrome-plated, pearl-handled Colt 1911 .45 automatic stuck in the back of his pants. My classmates and I looked alarmingly at each other. I hadn’t thought to bring a gun to frame school! After welcoming everyone and thanking them for their business, Booker drew the gun and told us he had brought it in to make an important point. When a pulling chain breaks while stretched at 10 tons of force, the broken link moves faster than the slug from a .45. His point was that you should always cover a pulling chain with a blanket, moving pad or burlap bag so when it breaks, the blanket will catch the flying chain. I took his advice to heart and even today nag the techs to cover their tensioned chains whenever I see one uncovered.
Paint and Materials » Paint and material costs remain a concern with many shops 43 years later as well. There are several ways to measure paint and material expenditures. Two of the most common are dollars per month per tech, and as a percentage of shop sales. In today’s business environment, I use $1,000 per tech per month as an easy benchmark for what the shop spends to buy paint and materials from a jobber. Remember to count everyone who touches the car in that head count: the wash person, the painter’s helper, etc. Anyone who has a hands-on role in repair counts toward the total dollars. Part-time people are counted as a percentage of a 40-hour work week. For example, using my math, a shop that has 9.5 techs should spend
about $9,500 per month on paint and materials. Another way to look at paint and materials is as a percentage of shop sales (before any taxes). I believe that paint and material costs should run between 5 to 7 percent of shop sales; using 6 percent as a middle value, a shop doing about $160,000 per month in total production should spend about $9,600 per month to complete all vehicles. Make sure of two things: (1) only purchases that are truly paint and material should be counted (no booth filters, tools, equipment or safety gear) and (2) to make appropriate money on the paint and materials expenditures, the shop must sell about 9 percent of sales in paint and materials on the RO. This means adding refinish labor hours until the 9 to 10 percent billing level is achieved. While the percentages haven’t changed dramatically since I began in our industry, the dollar values sure have. When I started in 1970, a pint of acrylic lacquer color cost the shop $2.15. Today, a pint of basecoat color costs the shop about $70! Tempus fugit!
Congratulations » Each month throughout 2013, I’ll reminisce a little about how our industry has stayed the same and how it has changed over my long tenure. We’re a unique segment of the American economy, and I’m still pleased to be part of it. Congratulations to you as well for being a key ingredient in keeping the nation’s fleet rolling attractively and safely forward! BSB Mark R. Clark is the owner of Professional PBE Systems in Waterloo, Iowa; he’s a well-known industry speaker and consultant and is celebrating his 25th year as a contributing editor to BodyShop Business. Circle 12 for Reader Service
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Web Presence
Management
By Mark Claypool
Resolve to Market
Your Business More in 2013 t this point, New Year’s has come and gone and you’ve made your resolutions. You know, those promises you make to yourself to make positive differences in your life and others’…promises you make now as you consider a fresh start…promises you usually break by now! I hope that one of your resolutions was to market your business and bring more work to your door. If you’re reading this, the prediction that the world would end proved once again to be premature (remember Y2K?). So, since life has gone on, I’m going to share four things related to your web presence that you should resolve to accomplish during 2013.
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Freshen Up Your Website » When’s the last time you took a look at your website? What’s the copyright date at the bottom (if you have one, and you should)? Does it still say you’ve been in business for X years, which was true years ago when you launched your website but now you’ve actually been in business for Y years? Search engines will reward you for fresh content and pick up on the slightest change you make to the site. Regularly updating your site shows search engines that your business is alive, viable and worthy of ranking. If your site is five years old or more, you should probably look at redesigning it. Your website is your online lobby. Having said that, maybe your lobby area hasn’t been updated lately either, but I’ll leave that topic for other people to write about. Conduct a search on Google, Yahoo and Bing using this information: “auto body [INSERT YOUR TOWN AND STATE’s TWO-LETTER ABBREVIATION].” Skip past the sponsored listings and 14
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map pointer listings and look for what are known as the “organic” search results. Is your shop on page one? Two? If not, you should resolve to have an SEO expert do some work on your site. Contact me for more information.
Build a Mobile Version of Your Website » Generation Y (those folks under 30 years of age) is now the largest generation on the planet. And in case you haven’t noticed, they do everything on their phones. So, a mobile version of your website is in order, something that’s optimized for the size of a small screen. (This was the topic of my August 2012 column titled, “Going Mobile With Your Website”). Connect with a reputable firm that understands how to do this correctly. This will enhance your chances of getting Gen Y vehicles to fix. It’s worth taking the time and spending a few bucks to do it!
Measure Your Online Results » If you aren’t getting reports on your online performance, it’s way past time to do so. Anything worth doing is worth measuring – and that holds true for your Web presence. And the best part is that these reports are free! If your website developer/hosting service is charging you for reports, fire them. It takes about one minute tops to insert Google Analytics coding into a website and about 10 minutes to create a Google account if you don’t already have one, so there should be no excuses why a developer can’t set this up for you. If they complain, ask yourself why. Is it that they don’t want you to know how poorly the site is performing? Facebook reports through its Insight system. After you’ve gotten 30-plus “Likes,” you can start viewing these reports. On
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»| Web Presence |« these reports, you’re looking for people “Talking About This,” meaning they’re liking things you’ve posted, commenting on them or sharing them on their wall. You can see how many “Likes” you have and the total number of people your followers are friends with. That’s how your Facebook page can go viral: getting your followers to participate in your posts.
Participate In Social Media » Is your business on Facebook? Google+? Twitter? It should be. Ninety-seven percent of Generation Y is, and a large percentage of the rest of us are, too. Social media is about branding, and now it’s also about ranking better through Google+. This doesn’t mean just creating accounts and posting from time to time. This means actively promot-
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ing your accounts, getting “Likes,” “Followers” and “Circles.” This also means posting the kind of content regularly that gets people participating, commenting and sharing. If you don’t have the time to do this, then outsource it to someone who can do it for you. Contact me if you have questions.
Keep Your Resolutions » Don’t let these resolutions fall into the bottomless pit of broken and forgotten ones. Your business deserves better than that, and so do you and your employees! Make 2013 a year of online marketing action! BSB BSB Contributing Editor Mark Claypool has worked in the fields of workforce development, business/education partnerships, apprenticeships and Web presence management for 30 years. He’s CEO of Optima Automotive (www.optimaauto-
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motive.com), which provides website design, development, search engine optimization (SEO) services and social media management services. He’s also the Director of Business Development for Metro Paint Supplies in Chicago. Claypool’s work history includes VP of VeriFacts Automotive, founder of Mentors At Work (now a division of VeriFacts), executive director of the I-CAR Education Foundation and the National Auto Body Council (NABC), cofounder of the Collision Industry Foundation and national director of development for SkillsUSA. Claypool served, on a volunteer basis, as the SkillsUSA World Team Leader for the WorldSkills Championships.
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Track Talk NASCAR Short Track Aces to Light Up Daytona
Beach” trophies are replicas of the trophy bestowed u p o n i n f a m o u s throttlestomper Fonty Flock for Back to the future: NASCAR’s next generation of drivers will winning compete for 1954 trophy replicas at the Battle at the Beach. on the Daytona beach circuit in 1954. With the addition of the “I always like old trophies Battle, Daytona International and the history of NASCAR Speedway is the first track to and where it comes from and feature every level of NASCARwhat it began as,” said sanctioned racing at its facility, Pulliam, who lists Dale as the short-track teams join Earnhardt, Sr. as his racing the three national NASCAR inspiration. “I think that's an Series and the Grand-Am important part of this sport. To Series at the famed speedway. see that trophy being a replica “It's our first foray into shortof one of the first ones given track racing,” said Daytona out, that's really neat. It would International Speedway Presibe pretty sweet to take that dent Joie Chitwood. “Now thing home.” we've got this new two-day event on Monday and Tuesday of race week, and we're really excited.” Tickets for the UNOH Battle at the Beach, along with all other Speedweeks 2013 events, can be purchased online at www. daytonainternationalspeedway. com or by calling (800) PITSHOP. Stay up to speed on the latest news by following hashtags #NASCAR, #DAYTONA500 and #NASCARBattle.
For 2012 NASCAR Whelen All- youngest K&N Pro Series West American Series national Champion in history; Chase champion Lee Pulliam, being Elliott, son of two-time locked into the starting field Daytona 500 champion Bill for the Late Model race at the Elliott; and Joe Gibbs Racing 2013 UNOH Battle at the developmental driver Darrell Beach is the opportunity of the Wallace, Jr. young racer’s lifetime. “This is all about the stars “For me as a driver, the of tomorrow vying for glory opportunity to go to Daytona at Daytona International is a really big deal,” Pulliam Speedway,” said George said. “This is probably going to Silbermann, NASCAR vice be my only opportunity to run president of regional and at Daytona, so it’s going to be a touring series. “During two big deal for a lot of us.” days and nights of intense Pulliam, a Semora, N.C., competition, fans will be able native, will be among many of to see today’s aces of short NASCAR’s up-and-coming track racing and some great stars getting a chance to com- young talent.” pete at the legendary Daytona Racers will compete on a .4International Speedway during mile oval track on the famed Speedweeks 2013. Superstretch of Daytona The bright lights of the International Speedway. The “World Center of Racing” will ultimate prize? A piece of shine on the stars of NASCAR’s throwback hardware. regional and touring series, as Inaugural “Battle at the Daytona International Speedway hosts the inaugural UNOH Battle at the Beach Feb. 18-19, 2013. The two days of racing will be headlined by three non-points special events – the NASCAR K&N Pro Series, NASCAR Whelen Modified tours, and the Late Model division of the NASCAR Whelen AllAmerican Series. Joining Pulliam at the event will be many of NASCAR’s up-and-coming stars, including: NASCAR K&N Pro Series East champion Kyle Larson; 17-year- The inaugural 2013 UNOH Battle at the Beach will be the destination for fans to old Dylan Kwasniewski, the get a glimpse of NASCAR’s stars of tomorrow. Follow NASCAR Performance on Twitter and Facebook www.twitter.com/NASCARauto ■ www.facebook.com/NASCARPerformance
By Kimberly Hyde, NASCAR
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Industry
Update (Counterclockwise from top): (Left to right) Dave Dewalt, Steve Feltovich and Lee Rush field questions from the crowd; Rex Green of BB&T Capital Markets; Troy Neuerburg, manager of marketing business services for Sherwin-Williams Automotive Finishes; Tom Hablitzel, president of SherwinWilliams Automotive Finishes; Elainna Sachire of Square One Systems.
Sherwin-Williams A-Plus Vision Group Conference Focuses on Trends, KPIs By Jason Stahl ore than 100 top collision repair shop owners were educated on business strategies and industry trends at the SherwinWilliams A-Plus Vision Conference Dec. 6-7 in Palm Springs, Calif.
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What Is Success? » Elainna Sachire of Square One Systems kicked things off by asking, “What is success?” “It’s what you do with your ability, and how you use your talent,” she said. “And when you clearly define it at the beginning, all parties are 20
more likely to work toward the same goal.” Sachire also outlined the three “P’s” of success: 䡲 Purpose 䡲 Passion 䡲 Performance
State of the Capital Markets » Rex Green of BB&T Capital Markets was up next, offering a glimpse into the investment in the growth of multi-shop operators (MSOs) over the last five years. BB&T was the adviser for four of the last six deals that involved 20 or more collision facility locations: Service King, The Boyd Group (Gerber Collision & Glass), True2Form and CARSTAR.
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Green characterized the collision industry as a “star perfomer” over the last few years, opening the eyes of Wall Street and large equity groups. A couple reasons for that, he said, was an increase in miles driven and new cars sold. “To have a firm like Carlyle invest in collision is very rare and interesting,” said Green. Green called the broader automotive aftermarket an “absolute winner” from an investor standpoint over the last 10 years, although he admitted it has been a “little tired” over the last six to nine months. The second wave of consolidation in the collision industry, Green said, is being driven by
industry dynamics and investor appetite. He said the difference between this wave and the first wave, which occurred in the late 1990s, is that insurance companies are now fully engaged, and their own strategic objectives are now in sync with the benefits of consolidation. “It’s the same idea today as it was then: to drive more volume and drive down cost. But insurers didn’t play that game back then the way they are now,” said Green. “Insurers are now focused on cost more. Fifteen years ago, it was just on a Continued on pg. 42
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Tech
Tips
By Dan Espersen and Jeff Webster
Chrysler Park Assist System Service and Repair e may not have flying cars yet, but not long ago, the capabilities of newer cars was the stuff of science fiction writers. Now you’re seeing vehicles with collision avoidance, navigation, parking assistance and many more sophisticated systems. Of course, all these electronics vary from make to make. About the only sure thing in the collision repair business these days is that OE information is critical to repair a vehicle to ensure it conforms to safety, fit, function and appearance. Here is an excerpt of OE repair information from Chrysler on its park assist system in the 2011 Chrysler 300 V6-3.6L.
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Service Information » Always refer to ALLDATA Collision for safety procedures, identification of material types, recommended refinish materials, removal and installation procedures. Always refer to the manufacturer for questions relating to applicable or non-applicable warranty repair information.
Park Assist Module — Removal 1. Disconnect and isolate the battery negative cable. 2. Remove the inner trim panel from the right quarter panel to access the park assist module (1), which is located just behind the right rear wheel well. 3. Remove the push-pin type retainers (1) that secure the park assist module to the inner panel (Figure 1). 4. Remove the module from the vehicle. 22
Park Assist Module — Installation 1. Position the park assist module (1) to the right inner panel, at the rear of the vehicle (Figure 1). 2. Install the push-pin type retainers (3) (Figure 1). 3. Connect the body wire harness connectors (2) to the module connector receptacles (Figure 1). 4. Install the trim onto the right quarter inner panel. 5. Connect the negative battery cable.
Park Assist Sensor — Removal 1. Disconnect and isolate the battery negative cable. 2. Remove rear fascia. 3. Unsnap the Park Assist Sensor from the retaining housing and remove from the fascia (Figure 2).
Park Assist Sensor — Installation 1. Position the Park Assist Sensor over the retaining housing and firmly snap into the housing in the rear fascia. 2. Install the rear fascia. 3. Connect the battery negative cable.
Park Assist System — Testing and Inspection, Component Tests (Excerpted as an example only) WARNING: To avoid serious or fatal injury on vehicles equipped with airbags, disable the Supplemental Restraint System (SRS) before attempting any steering wheel, steering column, airbag, seat belt ten-
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sioner, impact sensor or instrument panel component diagnosis or service. Disconnect and isolate the battery negative (ground) cable, then wait two minutes for the system capacitor to discharge before performing further diagnosis or service. This is the only sure way to disable the SRS. Failure to take the proper precautions could result in accidental airbag deployment. NOTE: The presence of jackhammers, large trucks and other vibrations in the vicinity of the vehicle could impact the performance of the system. The following textual messages may appear in the Electronic Vehicle Information Center (EVIC):
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»| Tech Tips |« 1. Service Park Assist – If a service park assist textual message appears in the EVIC display, the system may have a hard fault, and further investigation may be needed. 2. Clean Park Assist Sensors – If a clean park assist sensors textual message appears in the EVIC display, be certain to confirm the following: 䡲 The rear bumper is free of ice, snow, mud or other obstructions that will prevent the system from operating properly. 䡲 The park assist system is selfcorrecting; verify that the area of the rear bumper where the sensors are located is not blocked by ice, snow, mud or other obstructions. If the area is blocked, remove the blockage, shift the transmission selector lever into reverse and verify the message is no longer present in the EVIC display. The system may also be corrected when the vehicle is driven at a speed greater than 14 kph (8 mph). 3. Service Park Assist Sensors – If a service park assist sensors textual message appears in the EVIC display, a sensor or the sensor wiring may be damaged, and further investigation may be needed. 4. Park Assist Off – If a park assist OFF textual message appears in the EVIC display, the system may be manually cut-off. BSB Dan Espersen is ALLDATA’s senior collision program manager, holds an AA degree in automotive technology, and has 46 years of experience in the automotive industry, 19 in collision. © 2013 ALLDATA LLC. All rights reserved. All technical information, images and specifications are from ALLDATA Collision S3500. ALLDATA is a registered trademark and ALLDATA Collision S3500 is a mark of ALLDATA LLC. Chrysler and Chrysler 300 are registered trademarks of Chrysler Group LLC. All other marks are the property of their respective holders. Circle 24 for Reader Service
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COVER STORY
Top collision repair experts reveal the ideas that took their businesses to the next level.
The Best Idea I Ever Had By Jason Stahl
COVER STORY » Best Idea Gary Wano
Brad Zara
Executive Vice President G.W. and Son Auto Body Oklahoma City, Okla.
Owner Zara’s Collision Springfield, Ill.
Listening to the Industry y best idea ever was to listen to the industry. From a business model standpoint, the auto body industry, for the most part, has vested itself in DRPs. Once the good ol’ boy network turned into a viable, measurable referral source, a lot of us bought into that and began using it. But now we’re increasingly seeing the insurers accumulating data that gives them the upper hand and allows them to know what’s going on in our businesses and then convince us to do things differently than we normally would.
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As we began to expand our business, we were going down that same path. We were reaching out to as many insurers as we could to build more relationships and increase volume. But the more I listened to shop owners who were part of that business model, the more I heard the truth: that DRPs were a necessary evil. So we began looking at ways to divest ourselves from that arena. And that was the best decision we ever made.
Jim Shreve Manager Waikem Collision Center Massillon, Ohio
Scheduling by True Capacity he greatest idea I ever had was to implement a scheduling system geared around our true capacity. That’s something I find a lot of shops still don’t do. It has been extremely helpful to us in that it has helped us manage our workflow and get away from the “everything in on Monday, out of Friday” scenario. When we’re tainted by what we know, then we don’t believe that people will bring their vehicles in on Thursday or Friday for repairs. But we quickly found out that if there is a method to the madness, people will do whatever you ask them to do.
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Becoming a Farmer y greatest idea was to become a farmer and plant the seeds to change my shop’s culture. When I got here, it was very bad. Out of 15 employees, only one survived. I went through several people until I handpicked a team that could understand that we were a team. But for me to affect change, I had to come up with a way of doing it. I seek knowledge constantly. At any one time, I’m reading three to four different books. So the way I affected change was to grab articles from BodyShop Business and read them to my guys at morning meetings. Sometimes I would give them copies and tell them to read them when they got the chance. I wouldn’t bring it up again for three to four
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months, then I would ask them what they thought about the article. They would typically reply, “Oh, I forgot to read it.” And then I would give them a week to read it so we could then meet and talk about it. After I started planting these seeds, the crop blossomed with ideas. And now I have them asking me for information. I never get to read the hard copy of BodyShop Business anymore because it disappears off my desk. I have them reading everything, and they’re now telling me (as opposed to me telling them) what will or won’t work. They’re developing their own culture. I empowered them to run the shop, and now it’s very efficient.
Ron Nagy President Nagy’s Collision Repair Specialists Doylestown, Ohio
Opening a Second Location he greatest idea I ever had was to open a second location. We met at a small coffee shop and decided to run with it. The idea came from being involved in the industry and having a hunch that multi-location shops might be the future. We sat down and put a plan together that we thought was thorough. We now have eight locations and we love what we’re doing.
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COVER STORY » Best Idea Ray Gunder Owner Gunder’s Auto Center Lakeland, Fla.
Going Legal he best idea I ever had was to take my business back and keep it from going down the trail of bankruptcy. And that was the day I decided to go legal. I had to gain knowledge so I wouldn’t get blown out of the water, plus I had to find a great attorney and
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a consultant because I didn’t have all the answers. It literally saved my business when I decided to fight back. All I had to do was look at my numbers to know I was in trouble, and I refused to be a good man who was forced to do bad things in order to make a profit. Cutting corners was not an option for me. I recommend that shops stand up to insurers, but whether they go legal or not is their choice. They need to tell insurers that we are the repair professionals and we know how to fix cars, and they sell insurance. Please pay us properly and reimburse our customers properly to have their cars fixed back to pre-loss condition.
Lane Griffin Vice President of Operations Laney’s Collision Center El Dorado, Ark.
Morning Meeting he thing that has worked the best for me was starting a release meeting every morning with all of our employees. I think it really does help make the day go better with everybody being on the same page when you walk out the door to go to work in the morning. We’ve been doing it for about two years. Before that, it always seemed like somebody had to be running around and be the “walking boss.” We just talk it out and touch on every car that’s here and what stage of the process it’s in. That way, everyone knows the parts should be here today for this vehicle so it can move to this stage, this one is coming over from the body shop to the paint shop so my paint shop will be looking for it, this one will be coming out of the paint booth so I know I’ll need to be looking for it to put it together, etc. It keeps someone from having to run around all day and tell everybody what’s going on.
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COVER STORY » Best Idea Jim Patrick
Jonathan Kazary
Collision Repair Manager Lang’s Chevrolet Beavercreek, Ohio
Owner Kenwall Autobody Linden, N.J.
Scheduling by Severity
Buying P & M Calculating Software
he best idea I ever had was scheduling by the amount of damage or severity: light hits, medium hits and heavy hits. You get more production that way because you’ve got the right person assigned to the job. If I have a heavy-hit guy who’s hanging a bumper, he’s not working at his full potential. He could be making me more money working on a frame rack. Then I have the fast-track guys who can take those little jobs like fixing a bumper and run it right on through to the paint shop and out the door so we can get two- to three-day turnarounds. That allows the heavy-hit guys to spend more time on the heavy hits. We found in the past that if you didn’t keep a guy on, say, a 50-hour job, the job seemed to die. Now that we schedule by severity, they seem to stay on those jobs a lot better.
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urchasing paint and materials calculating software was the best thing I ever did. I got it a few months ago, and now I get $50 to $500 more per estimate depending how big the job is. Instead of getting paid, say, $250 for paint and materials, I’m now getting $350. Or instead of $750, I’m getting $1,250. All the insurance companies are paying it except one. I try to tell every body shop I know about it because not many of them are using it. And it’s only $300 per year, and one job will cover that. The insurance adjusters who come in to my shop used to say they never heard of it, then they would call up their managers and they would end up paying. One insurer even let me put in a 10 percent markup! It’s really made a big difference in my profitability. BSB
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TECHNICAL
Bonding Time Following the automakers’ recommended repair procedures when using adhesives is critical to consumers’ safety and the completion of a quality repair. By Mitch Becker
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usiness decisions have to be made every day in the collision repair industry, including decisions on how to repair today’s vehicles or what to repair in them. That particular repair decision can be tough, considering that the repair instructions can sometimes be hard to find. Hopefully, nobody is intentionally repairing vehicles incorrectly. I think what happens more often is that sometimes, when decisions are made, we don’t see the big picture or are not correctly informed when it comes to vehicle repairs.
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OEM Recommendations » Some of these poor decisions based on incorrect information occur when working with adhesives in repairs. Many vehicle manufacturers are using adhesives in the factory and have recommended procedures for repairs. Many have started to use adhesives to adhere the roofs of many vehicles. Some weld the roof at the factory, but the repair calls for adhesives to be used with either adhesives only, rivet bonding, weld bonding or spot welds
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in the corners with adhesives. Which procedure does a shop follow? Does a shop replace the adhesive or not? Should it use adhesive instead of welding? Is weld bonding best? These questions must be answered in order for the shop to make the correct decision. First, how does the OEM want the vehicle repaired? This consideration is always No. 1. Second, does the shop have the proper equipment and training? Keeping up with a rapidly changing industry can be expensive. Third,
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TECHNICAL » Bonding Time why should a shop keep up with these procedures? It takes time and training. Is it worth it? I commonly hear, “I’ve been doing it this way for years and haven’t had any problems, so why should I change?” These are not easy questions to answer without some good background information. I believe that if a person is going to make a decision, they need the “why” something is needed or used. Armed with this information, a person can make a sound decision that will be in everyone’s best interests.
Daunting Challenges » Automakers have been facing some daunting challenges. How do you make a safe, lightweight, strong, comfortable, electronically advanced, powerful, fuel efficient green vehicle that looks good, costs little to manufacture and will maintain its resale value? Sounds simple enough, but I don’t build them. They’re trying to think of new ways to meet these demands, and one of those ways is through adhesives. Adhesives used for vehicle construction are multi-purpose products that perform a variety of functions. Here are some of those functions: Vehicle Stiffness or Rigidity. Steels today are lighter and stronger than in years past. This strength also leads to steels being more brittle, which can be a problem in areas where there is high stress. This high stress can cause metal fatigue. Adhesives minimize movement by using more surface area for the bonding of metal. A spot weld or plug weld may only be 8 millimeters in diameter, but adhesives are bonding much larger surface areas. They spread the force over a larger area and reduce stress on one point. They also add strength to areas required for crash safety in this same way. Good examples would be the occupant compartment on Chrysler or Ford through weld 34
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I-CAR to Introduce Enhanced Adhesive Bonding Course with Live Demos in April 2013 lthough the processes used for adhesive bonding haven’t changed significantly in recent years, repair facilities need up-to-date training to properly make the adhesive bonding repairs recommended for many of today’s vehicles. The I-CAR Adhesive Bonding course (ADH01) provides current and relevant information necessary to help ensure collision repair professionals are trained on how to achieve quality repairs. The Adhesive Bonding course provides detailed information about the processes used in collision repair situations and will be introduced in April 2013 with enhancements and newly introduced live demonstrations. Incorporating live demonstrations provides students the opportunity to experience firsthand how to properly prepare parts and use adhesive materials. The “Live Demo” portions of the course will simulate adhesive bonding procedures using two-part adhesives and will present the steps for an adhesive that is applied to bare metal, as well as the steps for an adhesive that requires a primed mating surface. During the course, students will learn about the main types of adhesives used for collision repairs (epoxy-, acrylicand urethane-based), differences between materials, characteristics and what is required when working with them. The course explains that each type of adhesive has specific work and handling time, bond line and clamping considerations, and cure time recommendations. Other course details include considerations around knowing when to follow the instructions provided by the vehicle maker, and when to follow recommendations from the adhesive maker. The typical recommendation is to follow the instructions provided by the vehicle maker if the product being used is labeled by the vehicle maker. If the vehicle maker recommends the use of a product brand, follow those product instructions. Using adhesives for repairs includes adhesive bonding, weld bonding and rivet bonding. The course provides an understanding of how the types of weld bonding and rivets used for rivet bonding are important for making the proper repairs. There are also specific considerations for using adhesives in aluminum repairs. Considerations for part removal and cleaning for one- and two-part adhesive bonding repairs, as well as preparation for part attachment and factors that can impact successful attachment, are provided in the course. For more details on Adhesive Bonding (ADH01), visit www.i-car.com.
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TECHNICAL » Bonding Time bonding, and the use of adhesives for structural glass for many years now. Corrosion Protection. Vehicles today are built to go the distance. With some achieving 200,000 miles relatively easily, adhesives are a major contributor to their longevity and resale value. Welds have been notorious for corrosion issues. Adhesives help seal and possibly
limit the number of welds required. Consumers are also keeping their vehicles much longer than previous years, so making sure the repair holds up over the time the owner will have the vehicle is an important consideration. Sound Deadening. Consumers want a sound vehicle while driving or just closing a door. Adhesives keep a lot of
the popping and noise levels down. Many people judge the airtight quality of a vehicle by the way a door sounds when closing. A thump is good versus a metal-sounding “ting!” Hybrid Construction. Not to be confused with hybrid-electric vehicles, hybrid construction refers to the bringing together of many different strengths of steels, plastics, glass or other building materials. For example, adhesives allow for aluminum panels to be used on steel structures. This allows for many different materials to be used together to meet all requirements. Cold Fusion. Many metals used today require STRSW welders or are recommended to not be welded during repairs. These are mostly ultra high strength steels that come under names such as boron alloyed steel. This can also hold true with aluminum outer panels bonding to steel. Using adhesives in place and in conjunction with items such as rivets will bond these metals, thus maintaining their strength and not creating corrosion hot spots normally associated with welding.
Basic Guidelines » So what can a shop do? Here are some guidelines:
4 Common Failures Preparation. Many adhesives require bare metal for bonding; others require that primer be applied first. Knowing and following directions is key.
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Plungers. Not leveling plungers on epoxy-based products before attaching the static mixing nozzles. This will cause an uneven mix to come through the tip, affecting all adhesive properties.
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Incorrect nozzles. The use of incorrect nozzles is also a source for failures. Not all static-mixing nozzles work the same.
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Improper cleaning. The improper cleaning of surfaces will also have a direct effect on the adhesion properties of any product used.
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TECHNICAL » Bonding Time 1. Only use adhesives if the manufacturer has a written procedure that says to use them during repairs. If a vehicle was welded from the factory and there is no adhesive procedure provided, then welding would be the
primary decision. If a business decision is made to move forward, document and follow adhesive manufacturers’ procedures diligently. Many manufacturers have guidelines or procedures if a shop decides not to use adhesives,
one of which might be to increase the number of welds. 2. Training is a must. Training classes from adhesive vendors and I-CAR help technicians use products correctly. Follow through and check that products are being used correctly. Rivet bonding is being used in the manufacturing of more and more vehicles and is being included in the recommended repair procedures. Training in the use of the correct fasteners and adhesives is critical to the safety of vehicle occupants and the quality of the repair. This can be seen in the procedures required by Jaguar, BMW and Audi. 3. Equipment requirements. Specialized Squeeze Type Resistance Spot Welders (STRSW) may be required to weld bond steels. These welders can be expensive. Depending on requirements and frequency of use, doing research can save a shop time and money. Self-piercing rivet tools may be an option for aluminum intensive vehicles.
Type of Repair » The type of repair will largely determine what type of adhesive is recommended. Types of substrates being bonded for many hybrid construction vehicles will be a critical consideration as one adhesive may not do it all. Cure time and clamp time will also be a variable, as will bond line thickness. All of these considerations are discussed in many different training programs. Learning to identify when and where adhesives are to be used and how to use them correctly is critical.
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Product
Spotlight AudaNet Makes North American Debut Next-Generation Platform Comes to U.S. Following Proven Success Throughout Europe udaNet is an intelligent, next-generation automotive claims and collision repair platform from Audatex that seamlessly connects insurers, independent appraisers, repair shops and vehicle owners. Optimized for the North American automotive market, AudaNet is built on proven, innovative technology successfully used for years across 20 countries throughout Europe, where the platform processes more than 30,000 transactions daily. AudaNet provides optimized outcomes to insurers by maximizing efficiencies and customer satisfaction, while also reducing loss adjustment expenses (LAEs). For repair facilities, AudaNet delivers peak operational performance by increasing repair accuracy, reducing cycle times, maximizing customer satisfaction and optimizing shop success. Finally, AudaNet enables maximum vehicle owner
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satisfaction by informing and empowering customers to get them back on the road as quickly as possible. The platform harnesses business rules engines, robust data connections and predictive analytics to deliver intelligent and seamless customer solutions. AudaNet solutions serve our clients throughout the automotive claim life cycle – from collision, to appraisal, and through repair or total loss settlement. Delivering maximum customer satisfaction is at the very heart of the AudaNet platform – the most advanced, innovative and intelligent automotive claims and collision repair platform in the world. Audatex 3D Intelligent Graphics offer 360degree rotation, unlimited zoom, colorcoded parts and substrate materials identification, making it fast and easy to create an accurate estimate.
Learn More: www.audanet.us (800) 237-4968
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TECHNICAL » Bonding Time
The recommended clamp time is different depending on the type and manufacturer of the product.
and epoxy-based products are twopart products, with the acrylic-based having the fastest cure rate. Urethanebased products are generally one-part products that, in the past, had twopart options but were dropped due to the expense and equipment cost.
Roof Replacement » Let’s look at a roof replacement on a new vehicle. Many roofs are being applied at the factory using laser brazing, spot welds, weld bonding, rivet bonding and adhesive-only bonding using urethanebased adhesives. Some automakers actually recommend the exact same product used in the windshield adhesive bonding. When using urethane adhesive, primers are generally required for adhesion. This is different than the epoxy-based products that will bond to bare metal. Urethanebased products are flexible as they’re
capable of bonding to many substrates including steels, aluminum, glass, composites and plastics. This flexibility with a longer wet or working time make them an ideal product for roof skins. A manufacturer may adhere an aluminum roof to a steel structure and eliminate concern over galvanic corrosion of two dissimilar metals. The adhesive chosen for this type of roof replacement must have the properties needed to bond the materials. An adhesive used for glass and steel is different than an adhesive used for aluminum and steel. With aluminum, a non-conductive adhesive may be required. Along with adhesive choice, the surfaces must be properly prepared. An epoxy primer is generally required before the application of the adhesive manufacturer’s primer, which will give the proper adhesion and corrosion protection. Some procedures
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also require mechanical fasteners such as rivets or even a tack weld, which are used to prevent peeling of the panels. This knowledge can make the difference between a happy customer or a mad one with a warranty claim.
Avoid Bad Situations » Lack of training and knowledge can put the best technician in a bad situation. When your shop’s reputation is on the line, can you afford not to learn? One last bit of advice: If your shop is not replacing adhesives when used by the vehicle manufacturers, I hope you’re following the corrosion protection procedures. Once the corrosion starts, it spreads quickly. BSB Mitch Becker is a technical instructor for ABRA Auto Body & Glass. He can be reached at (763) 585-6411 or mbecker@abraauto.com.
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»| Industry Update |«
More than 100 collision repair owners attended the SherwinWilliams A-Plus Vision Conference.
A-Plus continued from pg. 20 PowerPoint presentation. Now it’s here for real. I don’t see that changing. When you outsource something, I don’t think
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it’s easy to reverse it.” Green continued, “Consolidation will be different now. Now there is discipline. We have to show investors the performance of an acquired
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shop. A dozen years has added a great deal of maturity to this industry.” Direct-repair programs (DRPs) continue to increase their influence, and their growth favors MSOs, Green said. He cited the statistic that, on average, large MSOs have 7.9 DRPs per store. Not all is rosy with collision, however, Green admitted. Claim volume is decreasing, cars are getting safer, severity is increasing and body shop sales decreased in 2012. “We would like a little more growth,” said Green, “but [collision] is a consolidating industry. The insurance industry will dictate just how much and
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how quickly the industry will consolidate.” On the topic of cars getting safer, Green said advanced collision avoidance technology won’t affect claim volume for years. “But it will affect conversations with investors because we’re hearing about it a lot,” he admitted.
Buy vs. Build » Green also delved into the acquisition process. “A single shop is rarely valued on its earnings but rather against the costs to a buyer of building an alternative location in that market,” said Green. Green said another
»| Industry Update |« cost that could make building an alternative location unattractive to an MSO is building goodwill, which he defined as the propensity for customers to come back. This includes insurance relationships and programs. “As insurers enter into more and more large-scale DRPs, the goodwill of independents and small MSOs is disappearing,” said Green. On a positive note, those shops looking to sell right now are getting top dollar. “There’s lots of money out there that needs to be invested, which means prices are high,” said Green. “If [private equity companies] don’t invest it, they lose it. That’s why money is being invested in collision.” Green sees three options for the small, single-store independents: 䡲 Sell sooner or at an otherwise advantageous time 䡲 Grow and sell later 䡲 Change your business model to offset the lack of insurance-pay customers “Keep in mind, the last guy standing is not necessarily the most valuable,” he said.
two to four national chains will share 25 to 50 percent of the market, 20- to 50-unit chains will spring up in different regions, and there will be only 10,000 to 15,000 independents left. Large MSOs will expand in all regions, and independents and small MSOs will work harder for less revenue.
Green predicted MSOs will soon pop up in Washington, D.C., and Virginia; they want to penetrate the Northeast, but he said they don’t know how to do that yet.
Competitive Landscape » Matt Ohrnstein of Symphony Advisors gave attendees a view of the current
The Future » What will the future bring? Green says the logic for having national collision providers is strong because national brands add customer awareness on top of DRP positioning, which drives revenue. Plus, scale allows: 䡲 Superior systems 䡲 Superior purchasing 䡲 Spending on consumer marketing 䡲 Better customer experience and satisfaction 䡲 Insurer benefit from national presence as costs go down and KPIs go up “Consumers have proven that they assign value to national brands and the consistent service they imply,” Green said. In 10 years, Green predicts that Circle 43 for Reader Service
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»| Industry Update |«
Matt Ohrnstein of Symphony Advisors.
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collision industry competitive landscape, telling the crowd of mostly singlestore owners, “You have a horse in the race. You may be a little behind, but there’s no reason you can’t be in the race.” He listed the many factors working against body shops today: 䡲 Aging vehicles 䡲 Higher fuel prices 䡲 Higher insurance deductibles 䡲 Increasingly sophisticated vehicle technology 䡲 Cashouts and unreported claims 䡲 Higher equipment and training costs He also listed insurers’ concerns: 䡲 Earnings pressure
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䡲 Increasing competition 䡲 Performance-based environment 䡲 Desire to “own” the customer 䡲 Downsizing/rightsizing DRPs 䡲 Securing long-term quality 䡲 Repair capacity 䡲 Consolidation Regarding State Farm’s controversial PartsTrader parts procurement program, Ohrnstein had a distinctly different take than some collision repairers who are against it. “State Farm has 20 percent market share. It’s not smart to walk away from them,” he said. Speaking generally about insurers, he said,
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“They don’t want to put you out of business – they need you.” He added, “If insurers want you to do something, do it. Because if you don’t, five guys down the street will.” Ohrnstein said that insurers, just like body shops, are driven by economics. Shops that have a lot of cars coming in are using price to get those cars. “All things being equal, MSOs lead with price – reduced labor rate, parts price, dollars going back to the carrier if their cycle time exceeds their promise, etc.” said Ohrnstein. “If you get an extra carrier that brings
»| Industry Update |« 20 cars to your shop and your gross margin drops from 44 percent to 40 percent, think of what drops to the bottom line. Ninety-five percent of shops will elect not to take this hit because they think they’ll make less money, but I would argue that getting more cars through without increasing your fixed costs is better.” As Ohrnstein sees it, collision repair facilities need the following things to survive and thrive today: 䡲 Scale 䡲 Management 䡲 Capital 䡲 Relationships What is the competi-
multi-markets 䡲 Integrating systems and processes 䡲 Leveling supply chain to support performance 䡲 Implementing lean processes 䡲 Developing SOPs 䡲 Leveraging technology 䡲 Embracing alternative parts usage
Honda ProFirst Program » Gary Ledoux Marcy Tieger of Symphony Advisors.
tion doing? Ohrnstein hit on several things: 䡲 Focusing on select preferred relationships 䡲 Developing self-man-
aged relationships 䡲 Giving significant discounts for volume 䡲 Concentrating geographically in single and
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of American Honda Motor Company informed the group of the automaker’s new ProFirst body shop recognition program. “Honda vehicles are becoming more sophisticated,” said Ledoux.
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»| Industry Update |« “We’ve partnered with I-CAR to promote the proper repair of vehicles.” Criteria for the ProFirst program are: 䡲 Use of CollisionLink at least four times per month 䡲 Achieving I-CAR Gold Class status 䡲 Someone at the shop has to complete the Honda Acura I-CAR class
Those shops that meet all the criteria will receive a handsome display plaque, and both dealer-owned and independent shops are eligible. Also, there is no cost to participate in the program. Ledoux also said that Honda vehicle owners would be receiving a letter educating them on the program, and there was also going to be a social media campaign along
with service reminder mailings. Brochures will also be available to shops and dealers to hand out. According to Ledoux, within the first seven weeks of launching the program, more than 600 shops registered and more than 100 qualified.
State of the Industry » Raymond Chew of CCC Information Services offered some interesting statistics that gave everyone a view of how the industry fared in 2012. Some of the stats he cited were: 䡲 Percentage of shops reporting lower sales vs. same period last year increased – the mild winter hurt 䡲 Forty percent of claims involved vehicles aged 7 years or older – the highest in 15 years 䡲 $2,586 = average severity in the first half of 2012 䡲 The 18-34 age group holds a 13 percent share of the new auto registration market; people aged 50 and older hold a 62 percent share 䡲 Forty percent of insurance carriers will soon adopt predictive analytics
Roundtable » The day’s events were capped off with a roundtable discussion involving lean guru Steve Feltovich, and SherwinWilliams managers of business consulting services Lee Rush and Dave Dewalt. All told, these experts touted 91 years of experience in collision repair. The experts answered pre-submitted questions from the audience. One question was, “How can you reduce cycle time as a nonDRP shop?” “I only focus on things I can change,” said Rush. “Is your blueprint 100 percent accurate? Eliminating supplements is very difficult.” Asked what the best cycle time was that they had ever seen, Dewalt said he had once seen 8.9 days nondrivable at Sterling. As far as best touch time, the trio said the best they had ever seen was 5 hours per day. Circle 46 for Reader Service
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»| Industry Update |« North Carolina Shop Sues Nationwide ichael Bradshaw of K&M Collision in Hickory, and when they need them most, and when they fail to N.C., has filed a lawsuit against Nationwide keep their promise, who can blame the consumer for beon behalf of his customer, a Nationwide policoming upset? Our efforts will be to illustrate to the court cyholder. The suit alleges that Nationwide rethe insurer’s intentional breach of contract, unfair and defused to pay for “reasonable and necessary” parts, ceptive trade practices and their acting in bad faith.” procedures and materials. The total amount sought in NYSACTA President Speaks on School Tragedy the lawsuit is $2,956.98 plus legal fees and costs. ike Orso, president of the New York State Auto Collision Technicians Association (NYSACTA), A customer authorized issued the following statement on the tragedy at Sandy Hook Elementary School: K&M to proceed with the reOn behalf of the New York auto body community, I would like to extend heartfelt thoughts of pairer’s recommended recondolence and deepest sorrow over the tragic event of Friday, Dec. 14, 2012, in Newtown, Conn. pair activities and signed I think I can speak on behalf of the entire industry that these people, our customers, friends, family documentation authorizing and neighbors have endured and witnessed life’s ultimate fear. We can only imagine in our own way the Bradshaw to act on his beunbearable grief if faced with the same horror. half in filing a lawsuit. As the news spreads, a day will not pass that we won’t find a connection by way of a friend, family The claim includes denial member or acquaintance of someone lost in this tragedy, adding more perspective. of procedures including testWhile listening to reports Friday and every day as caring parents, grandparents and humans, we all drive, removal of molding are affected and wipe away tears. Let us not forget how grateful we are to the heroes among them that adhesive from painted panday who saved many more lives. els, tint color, finish sand and I know our friends in the Connecticut auto body community who have always put the well-being of buff and others. their customers ahead of any daily activity. I know they too are hurting, and to them we offer our “We value our customers thoughts and prayers in the ability to heal. We know they too will struggle as they watch friends around and work hard to ensure them fight back tears and grieve. their repairs are done propAs Americans, we have experienced too many tragic days. Our parents struggled with tragedy, we erly, thoroughly and in a have endured tragedy and so will our children. Certain days will forever be etched in our minds; Dec. 7, timely manner,” said Brad1941; Nov. 22, 1963; Sept. 11, 2001. Maybe it’s the day we lost a loved one or our best friend. I know no shaw. “It’s unfortunate that words can put Dec.14, 2012 in perspective or make it go away. such legal activities have beIt’s my hope we can help each other honor these lost angels, to somehow help each other to do the come necessary. Consumers next required thing. Know that our thoughts and prayers are with the people of Newtown: to those who rely upon insurers to be are gone who see no more evil and to those who are left behind to hurt and grieve. there in their time of need
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»| Industry Update |«
Corporate AkzoNobel Sells U.S. Decorative Paints Business to PPG kzoNobel has announced the sale of its North American Decorative Paints business to PPG for $1.05 billion. In 2011, the North American Decorative Paints business had revenues of $1.5 billion, around 7 percent of AkzoNobel’s total 2011 revenue. AkzoNobel continues to have a strong presence in North America through its Performance Coatings and Specialty Chemicals businesses, with combined 2011 revenues of more than $2.7 billion and close to 5,000 employees.
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The company made the decision to divest Decorative Paints North America following a successful fouryear turnaround. AkzoNobel has chosen to focus its Decorative Paints Business area on key markets in Europe and its strong positions in high growth regions. The cash proceeds of $875 million will be deployed to support the company’s strategy. This includes investing in organic growth for AkzoNobel and reducing net debt. More details on AkzoNobel’s priorities will be
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disclosed during a “strategy update” on Feb. 20, 2013. “Over the past four years, the team has done a great job in turning the North American Decorative Paints business around,” said Ton Büchner, CEO of AkzoNobel. “We are convinced that Decorative Paints can get better returns from our leading positions in Europe and high growth markets. I am pleased that we have found a respected company to take over the business. This agreement is a good outcome for all stakeholders.” “This acquisition continues the accelerated pace of our business portfolio transformation through further expansion of our coatings businesses,” said Charles E. Bunch, chairman and CEO of PPG. “It is also an attractive way to significantly increase our scale in the North American paint market.”
»| Industry Update |« PPG Awards $20,000 to Collision Repair Education Foundation he PPG Industries Foundation has awarded the Collision Repair Education Foundation a $20,000 grant that will provide named post-secondary collision student scholarships. The scholarships will be part of the Education Foundation’s spring 2013 offerings, valued at more than $300,000, and will greatly assist collision students facing financial barriers. “PPG is privileged to take an active role in supporting the industry’s future professionals through these scholarships,” said Domenic Brusco, PPG Automotive Refinish senior manager, industry relations, and Collision Repair Education Foundation Board of Trustees member. “By providing collision repair students with support for the best technical education possible, we are giving collision repair businesses a chance to hire
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well-trained students who can be productive, efficient and capable employees from day one of the job. PPG is happy to offer these opportunities and continue its strong relationship with the Collision Repair Education Foundation.” Added Collision Repair Education Foundation Executive Director Clark Plucinski, “PPG Industries has supported the Collision Repair Education Foundation since its 1991 inception, and only through the industry’s active participation can our organization provide worthwhile support to the future professionals of the industry. PPG has continued to meet and exceed that challenge. I thank PPG for its continued support, and we look forward to making a positive impact with students this spring through these scholarships.”
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»| Industry Update |« Florida Judge Denies Motion to Dismiss Collision Repairers’ Suits Against State Farm, Progressive
n Dec. 13, a Florida judge ruled that Ray Gunder of Gunder’s Auto Center Inc., and Paul Hawks of Bernie’s Paint & Body Inc., both of
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Lakeland, Fla., do have legal standing on behalf of customers who granted them Power of Attorney and denied a motion to dismiss six lawsuits filed against State Farm by Gunder and one filed against Progressive by Hawks. State Farm argued that the six lawsuits Gunder has filed against them should be dismissed on the grounds that he did not have standing based on the Power of Attorney granted by his customers. Progressive’s legal counsel was also present in court and used the same argument in a suit brought against them by Hawks. “I feel strongly that the court made the correct decision,” said attorney Brent Geohagan, who represented both Gunder and Hawks. “While this is but one more in a long line of victories for Ray and his customers that is warranted and well-deserved, it’s a significant victory for the entire collision repair industry in Florida and beyond…and the fight goes on and will as long as need be.” Added Gunder, “I was extremely proud while I sat watching and listening to Brent’s passion, preparation and expertise as he defeated each of the insurer’s arguments. This is a huge deal as once again State Farm’s efforts to avoid disclosure of their internal business practices have been unsuccessful.”
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MSO/CONSOLIDATION
determining the value of a business is profitability, it’s critical that a shop’s records accurately reflect the financial health of the company. Records that are well-maintained over a period of years (rather than months) are helpful because they can reveal trends and explain aberrations. Poorly maintained financial records are especially problematic for business owners who take cash from the business “off the books” to lower their tax burden. If there is no documentation of your true earnings, and what you claimed as income in your tax re-
What’s Your Exit Strategy? In order to sell your business on your own terms, you have to be proactive, get your house in order and make sure your financial records are shipshape. By Marcy Tieger recently asked a friend in his late 50s about his plans for retirement. He told me he expected to die at his desk – and he was serious. He gave no thought to a time when he wouldn’t be in his business. Part of being a proactive business owner requires that you look a few moves down the chessboard – whether that means keeping the business in the family, turning it over to a management team so you can golf more, or selling the business. At this time of unprecedented industry consolidation, many independent collision center owners are
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selling their businesses. For any collision shop owner contemplating a future sale, even years down the road, there are a few things you should think about now to get your business ready.
Need a Boat? » You’ve heard the old-school shop owner talk about how he used to handle business finances, right? The story goes that one front trouser pocket was for incoming cash, and the other was for outgoing expenses. Whatever was left over at the end of the month was “profit.” Because one of the key factors in
turn under penalty of perjury was lower than your actual income from the business, it’s difficult to make the case for a higher valuation based on the “real” numbers in a sale transaction. Similarly, many owners run personal expenses (e.g. dry-cleaning, boats, ATVs) through the company and call them “business expenses” on their business tax returns. Not only is this potentially illegal (if not a legitimate business expense), but it may present downstream income tax exposure for the buyer of your business in the event of an audit after a sale. In addition, if you formed your business as an LLC or corporation, you created a separate legal entity to shield you from personal liability (protecting your house and savings accounts) in the event you were sued by, say, a vendor or customer. Howwww.bodyshopbusiness.com 53
MSO/CONSOLIDATION » Exit ever, your legal protection may be erased if it can be shown that your business expenses and your personal expenses are one in the same (commingled). This is called “piercing the corporate veil.” In the event of a possible sale, your legal entity status will be important because certain legal entities may give rise to double taxation. Also, many buyers don’t purchase the real estate when they purchase a business – they lease it back to the owner. Therefore, if you own the business and the real estate, the legal entity status that you operate under, and whether you commingle business operating assets with your real estate, may have significant tax consequences. The time to talk to your accountant, tax professional and legal counsel is now – even if a sale may be a few years down the road. You may
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January 2013 | BodyShop Business
Fix Auto: Entrepreneurial Spirit, Corporate Strength or decades, the collision repair industry was largely composed of independent operators, but over time the landscape has shifted to news of MSO acquisitions and consolidation. For top performing independent operators who want to remain viable and aren’t looking to sell, the future of the industry can be more than a little unsettling. The good news is opportunity abounds for a select few.
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The Franchise Model Advantage The Fix Auto collision repair organization provides a solution for those market leading, independent repairers by offering what is essentially the best of both worlds. Members retain control over their businesses, while gaining access to a breadth of resources — beyond the scope of an individual shop — that maximize performance and productivity while providing much needed visibility. These assets include national representation with insurers, large-scale marketing campaigns, real-time access to KPIs, as well as the pooling of expertise and data with other best-in class operators. Management tools provide feedback that allows Fix Auto franchisees to stay on top of the customer experience. And to ensure the organization is capable of delivering operational performance second to none, Fix Auto is selective about the shops that are invited to join, only adding operators who have proven track records of success and who are committed to excellence. An Undeniable Combination The Fix Auto approach allows an independent body shop to stay true to its entrepreneurial roots while leveraging strength in numbers, positioning its members to best meet the requirements of insurers and consumers. The approach makes the organization unique, effective and undeniable in today’s competitive marketplace.
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MSO/CONSOLIDATION » Exit Strategy valuation, the issues that dominate most sellers’ thoughts are a compatible business culture and integration of the business. This becomes most important when the seller plans to stay on in some capacity with the acquiring company, or where the seller does not intend to stay but is looking out for his or her employees who want to continue working with the acquiring entity. If you want to know how consolidators or a regional player who might view you as a great strategic add-on treat the employees of newly acquired companies, just ask. More often than not, the express terms of an acquisition deal will be subject to a non-disclosure agreement. (This is why you often hear different numbers about the purchase price in industry deals – they’re a product of hide-and-seek played by those inthe-know who do not want to breach
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Get Your House in Order » Some business owners struggle with whether they should sink money into the business when they think they might sell it. Maybe that’s you? You know you want to sell, but you just don’t know when. But let’s focus on what you do know: the condition of your equipment, whether the parking lot needs to be repaved, whether the plumbing in the employee bathroom is unreliable, and whether the fence securing your yard is falling down. Even if you own your real estate and plan to lease it back to a future purchaser of your business, the way your property, building and equipment are treated in the deal is not unlike the way total losses are calculated. Just like the car owner doesn’t get “credit” for regular oil changes or headlights that go on and off, there is a presumption that your space is in good working order and functional as a body shop. You don’t get credit for that – it’s expected. While a purchaser of your business will assume they need to invest in new trade dress (e.g. paint colors, signage, design features, etc.) to make your space look like one of theirs, they will also expect that you maintained the property. If there is significant deferred maintenance, you can expect it will be a deal point – either you take care of it (at your cost) or the buyer deducts it from the purchase price. Even with uncertainty about when you may exit the business, why not create the best possible first impression for your customers and a pleasant workplace for your employees in the interim? Remember, you’re paying for it anyway.
Due Diligence » After business
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be able to make adjustments in your legal structure now that afford you a more favorable treatment in a future sale. Plus, cleaning up your books and undertaking bookkeeping best practices creates a much clearer financial picture in the event of a sale – and may save you some grief in the event of an audit.
MSO/CONSOLIDATION » Exit the agreement and speculation by those who actually know very little.) However, simply asking employees or sellers who stay on with a buyer about their experience under the new regime is fair game. A potential seller who is contemplating a sale should consider attending local and national industry events to find natural opportunities to speak to sellers or employees of selling companies about their integration in a postacquisition environment. Better yet, do it over time. Recognize that a seller’s view three months after an acquisition may be very different 12 or 18 months down the road. In many cases, sellers will ask for employment contracts (customarily six to 12 months) for themselves and/or key employees who will be staying with the acquiring company. It’s not uncom-
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How Can Independent Store Owners Benefit from the CARSTAR MSO Network? ny independent shop owner in the collision repair industry today knows there are multiple challenges impacting their business. Their business is being squeezed from seemingly every angle. We know the way this industry is going — the independent owner is essentially facing one of three decisions: 1. Stay put alone and hope things improve. 2. Sell out to a consolidator group. 3. Join a network like CARSTAR. CARSTAR Auto Body Repair Experts understands and is ready to help. As North America’s largest MSO network with more than 400 locations in 31 states and 10 Canadian provinces, we offer a unique blend of corporate resources and a powerful partnership that helps independent owners build their businesses in an effective way. The CARSTAR model is uniquely attractive to independent store owners. CARSTAR provides the resources, support, buying power, insurance relationships and management expertise needed to compete while allowing stores to retain their ownership, identity and independence. For vehicle owners, CARSTAR delivers national scale, high-quality vehicle repairs, consistent and repeatable outcomes, and the industry’s highest customer satisfaction ratings. Most repairs are backed by a limited five-year nationwide warranty. Insurance carriers increasingly choose to work with CARSTAR because our shops deliver top KPI performance and consistent, repeatable outcomes as well as excellent customer service for their clients. How can independent store owners benefit from the CARSTAR MSO Network? Through our scale, standardized performance and operating procedures, high-quality customer service, corporate insurance staff, regional service staff, standardized reporting, national branding and marketing support, and training programs that only CARSTAR can offer! CARSTAR can open doors that are currently closed to independent operators. It’s the winning solution for more than 400 shop owners — and growing — across North America. To learn more about becoming part of something bigger by joining CARSTAR Auto Body Repair Network, visit CARSTAR.com or call (888) 505-6815.
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MSO/CONSOLIDATION » Exit Strategy
The time to talk to your accountant, tax professional and legal counsel is now — even if a sale may be a few years down the road. mon for those employees to leave for personal reasons after the contract ends, at the behest of the acquirer or both. (Keep in mind that sometimes, the reason for parting ways may also be subject to a non-disclosure agreement.) There are instances where sellers refuse to even consider an offer from a potential buyer because of rumor or a perception (accurate or not) that the buyer will not take care of them or their employees. For this reason, it’s important to get information about culture and integration in advance – before you’re approached by, or prematurely eliminate, a potential suitor.
Time to Say “Goodbye” » The sale of a business does not always occur when or how business owners expected. In many instances, owners who gave little thought to a sale are approached by a potential buyer and suddenly, they’re in the game. In other instances, sales occur during times of desperation, when businesses are struggling. It’s always possible to do a “back-
of-the-napkin” analysis of the value of your business within a likely range, recognizing that there are a myriad of factors influencing the actual offer. Many people mistakenly believe they’re sitting on a gold mine; sometimes they’re right, but more often they’re wrong. Experience shows that valuation is not what tells people it’s time to sell; it’s what they feel in their heart that speaks to them. Until that time comes for you, be realistic about where your business is now and where you want it to be, and plan ahead. If it’s not time to say goodbye, look at how you can build up your business and preserve value. BSB Marcy Tieger is a principal with the consulting firm, Symphony Advisors LLC, which focuses on delivering strategic, marketing, operational and financial advisory services to the automobile aftermarket parts and services supply chain and to automobile insurance physical damage claims organizations. She can be reached at marcy.tieger@ symphonyadvisorsllc.com.
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SHOP PROFILE
The
Doctor Is In Collision seeks to make the repair experience as painless as possible. “You’re turning around disruption and stress for many people, and you’ve got to use empathy and have the convenience and efficiency to get them back on track as soon as possible,” said Milijasevic.
nvestment is key to any business, including collision. Colorado-based Global Collision has found that investing on many levels, from relationships with customers and staff to its operations/procedures, pays off big time.
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Ford to Ferrari » As a certified repair facility for multiple upscale auto manufacturers, the eight-store operation strives to offer its patrons what it calls a “Ford to Ferrari” experience. “You’re getting Ferrari-quality care when you come to our facilities, no matter what your make/model of vehicle,” says marketing director Liza Milijasevic. After CEO George Lilley moved from the United Kingdom to the states in 2003, he opened the first Global Collision location in Denver. Since then, the company has expanded to eight facilities across the state, making it the largest independently owned multiple-shop operator (MSO) in Colorado. The “Ford to Ferrari” mentality is exemplified through the shop’s standard operating procedures, which make the business seem less like a body shop and more like a spa. By referring to customers as “patients,” as well as having Enterprise Rent-a-Car and mechanical and glass repair on-site, Global 58
January 2013 | BodyShop Business
By referring to customers as “patients” and offering them a “Ford to Ferrari” experience, Global Collision sets itself apart from the competition. By Gina Kuzmick
Flow Line System » While Lilley was in the U.K., he developed his own operating procedure called the “flow line system,” with the key theme of responsibility. “There’s no way you can get a production manager to stand behind every technician and make sure he’s putting clearcoat down; everyone has to be made accountable,” Lilley explained. “So, it’s a strict procedure where people are made accountable with regard to documentation, signing off on the actual repair, etc. They’re getting paid to do the job right the first time. You can cut out some middle management there, and clearly that’s a good savings in expenditure.” Before a repair, Global Collision details every vehicle that enters its facilities. This allows the technicians to be able to identify damage more quickly and accurately. From there on out, the company designates a customer service representative (CSR) from its call center to handle each customer. The
SHOP PROFILE » The Doctor Is In CSR also asks each customer how often they would like to be updated and their preferred method of contact: text, email or phone. “We don’t have a lot of incoming calls asking about the status of a vehicle because we’re very proactive,” said Lilley. “We have a golden rule in the company where we do not give a date of completion unless we’re assured that the car is perfect.”
Lilley calls this a “right first time approach,” insisting that the shop is only as good as its last repair. Each location has a production meeting every morning to evaluate every vehicle and discuss which “patients” can go home that day. If a car isn’t fixed correctly the first time, Global Collision will find
a more suitable technician to make repairs. “To rework a car means it’s not profitable,” said Lilley. “If you have to twitch the car again for rework as the result of a neglectful approach by someone, that individual never gets the opportunity to rectify that car again.
ABRA Evolves with a Changing Industry… n an industry experiencing contraction over the years, Minnesota-based ABRA Auto Body & Glass is creating quite a stir. Their skyrocketing growth over the past 18 months and plans for aggressive national expansion in 2013 has confirmed their position as one of the top multi-shop collision repair operators in the country. This is a full-tilt acquisition spree. During the course of 2012, ABRA Auto Body & Glass acquired its 16th repair center, welcomed seven new independently-owned franchises, and opened four newly-developed corporate centers. Nationally, ABRA now operates 92 company-owned repair centers and 44 independentlyowned franchises. They expect to continue boosting their presence in the collision repair industry with additional acquisitions in existing and new markets, expansion of franchise operations, and concentration on their industry-leading operating metrics. ABRA is actively seeking new opportunities to acquire repair centers as part of its aggressive national growth plans in major markets. Interested parties should contact Scott Gerling, Vice President of Corporate Development (sgerling@abraauto.com or 763-585-6210). For franchise opportunities in small and midsize markets, contact Mark Wahlin, Vice President of Franchise Development and Operations (mwahlin@ abraauto.com or 763-585-6315). Founded in 1984, ABRA Auto Body & Glass employs more than 2,000 in its nationwide system and is a leading provider of vehicle repair services specializing in collision repair, paintless dent removal, and auto glass repair and replacement.
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SHOP PROFILE » The Doctor Is In for repairing a customer’s vehicle.”
Going with the Flow » To get customers back on the road quickly, each shop is set up with a paint booth in the center of the floor. (Above) A glimpse of the “It’s set up that inspection and teardown way so there aren’t department of Global Collision’s a lot of cars that have Boulder, Colo., location. (Left) A to be moved very painter sprays Standox Standoblue waterborne paint onto far or around,” said Terry Lake, operaa vehicle. tions director. “It can “People can make good salaries in go from disassembly to repair to paint this industry based on this ‘right first booth, and then right to reassembly.” This “flow circle” setup serves as a time’ approach, which people sometimes don’t grasp. But after a period win-win for both Global Collision and of training, [that] approach is para- its customers. “Time is everything,” said Lake. “If mount. These individuals have to be aware they’re working on high per- you save 10 minutes a car times 100 formance vehicles so there’s respect cars a month times eight shops, that
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makes your productivity go up higher, so you can get more cars out the door and make more profit.”
Class Act » Another thing that makes Global Collision stand out is its numerous certifications to repair highend vehicles. From Porsche to Bentley, the MSO strives to give these vehicles the highest quality care. And although the average Joe can’t say he owns one of these cars, Global Collision says it doesn’t treat him or her any different. “These high-end, high-profile brands demand the absolute highest levels of training and professionalism,” said Milijasevic. “If we can deliver what those companies want, then we will bring the same kind of service and attention to detail to any vehicle.” Ahead of the Curve » The decision to repair high-end vehicles came after close examination of trends within the industry, such as the increasing
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SHOP PROFILE » The Doctor Is In sophistication of materials used to manufacture cars. Jaguar was the first make that Global Collision took on, and that certification prepared the repair center to accept other brands. “Jaguar is one of the first cars that had a huge emphasis on aluminum, but now aluminum is in almost every brand of car,” said Milijasevic. “So the investment we made with aluminum training and equipment and knowledge is paying off tenfold because we geared up for that before anyone else.”
As long as investment persists, so will the company’s business. “You’ve got to be prepared to invest. And ultimately, that will attract better technicians,” said Lilley. BSB
Hitting the Books » Lilley recognized the importance of having a strong marketing presence so that potential customers would have Global Collision top-of-mind before needing them. The business takes that idea to the next level by printing its own custom magazine, Global Collision Magazine, offering articles covering everything from winter driving tips to technical information to accident dos and don’ts. The first issue was released at the end of 2012. “We’re trying to appeal to everyone, from a customer who’s never had contact with us before to an insurance company partner whom we’ve known for 10 years,” said Milijasevic. Recruiting Efforts » Lilley believes that the biggest challenge confronting the industry is finding young people willing to make collision a career. As one way to draw young talent, Global Collision purchases used tools and equipment for its technicians.
Looking Forward » Global Collision has opened a facility every year since 2003, and will continue growing. It’s awaiting certification from Nissan and Volkswagen. It still sees opportunity to expand within Colorado, but in five years, its expansion may venture beyond the state’s borders.
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MSO/CONSOLIDATION GUIDE By Ron and Dan Nagy s we mentioned in the cover story of this month’s BodyShop Business (pg. 27), the greatest idea we ever had to catapult our business to the next level was to open a second location. We figured this might be the way the industry was going, and we were right. The third location came about when a dealer contacted us out of the blue and asked if we wanted to run a body shop at his location. The ensuing locations were pursued by us. With our recent growth in the last six years or so, I’ve been asked over and over, “How big are you guys going to get?” So I thought I would explain why we expanded to eight locations and didn’t stay as a small family business. My dad, Dave Nagy (or Pop as we call him), started the business in 1973 in Doylestown, Ohio, behind our house
A Stores & Counting
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MSO/CONSOLIDATION GUIDE » Eight Stores for the sake of convenience and customer service. He really understood what it meant to take care of the customer. From there, the business grew and grew. As my brother Dan and I took over, we had people driving miles and miles to come to Doylestown to have their cars, vans and trucks repaired. In 2006, we decided to make it convenient for the Wooster and surrounding communities by opening a location there. A couple years later, we were approached by Kirk Spurgeon of Spurgeon Chevrolet (formally Red Ferris Chevrolet), who wanted to partner with us and bring the Nagy’s process and culture into his building. That started a string of reactions from other dealership owners and some independents, some of whom were ready to retire or just wanted to be part of a bigger team. Nagy’s process and culture is simply the UCE (Ultimate Customer Experience), which comprises all of our policies, processes and documents. Simplified, it’s the “customer is always first” culture. Dan and I, with the help of many of our staff, built a complete repair process with standard operating procedures (SOPs) so that the repairs and quality would be the same as they were when Pop ran the store back in the
Lessons Learned, Mistakes and Brilliant Moves Lessons Learned 1. Don’t outrun your administration. 2. When you think you’re organized, organize some more. 3. Many minds make better decisions. 4. Make sure you have at least some DRPs or relationships so you have work coming in from the start – even if it’s slow. 5. Quality standards must be held very high – no exceptions. 6. Communication, no matter how painful, must be direct and timely. 7. Buy-in from all involved is paramount. 8. Get all the facts, not opinions, that you possibly can before making decisions. 9. Location, location, location. 10. The harder you work and the more you know you can, the more you can.
Mistakes 1. Not having DRPs or relationships set up ahead of time. 2. Not communicating quickly and precisely on problems with processes or personnel. 3. Not working smart enough. 4. Not having one of our people in a decision-making position exemplify our culture. Brilliant Moves 1. Asking questions of persons smarter than myself – sometimes from outside the industry. 2. Owning up to our mistakes. 3. Viciously defending our reputation. 4. Being born from parents who handed down an amazing legacy (we had nothing to do with this, but still…). 5. Getting involved with the community (schools, Chamber of Commerce, businesses and charities).
1970s and ‘80s. The SOPs are one part of the UCE, which spells out the “perfect repair” – from how we want to answer the phones, to greeting people, to final billing paperwork. From the metals and plastics to the electronic controls, the vehicles have changed dramatically. But one thing
we’ve remained consistent on is the customer service culture that Pop used to jump-start the business. BSB Ron and Dan Nagy are co-owners of Nagy’s Collision Repair Specialists. They can be reached at ron@nagys.com or dan@nagys.com.
ADVERTISER INDEX COMPANY NAME
ABRA Auto Body & Glass Aframe Spray Booths Airomax/U.S. Body Products Alloy Wheel Repair Specialists Inc. American Honda Motor Co. Audatex Automotive Mgmt Institute Automotive Service Equip BASF Corp. Bendpak Blackburn’s Hubcap & Wheels, Inc. Blair CARSTAR Franchise Systems Cebotech Inc. Certified Auto Parts Association Crash-writeR Dent Fix Equipment
PG. #
59 48 30 60 17, 29 15, 39 60 42 11 52 44 49 56 62 9 Insert 23
COMPANY NAME
PG. #
DuPont Performance Coatings 5 DV Systems 28 Evercoat 3, 33 Farecla Inc. 4 Fix Auto USA 54 Goffs Curtain Walls 16 H & S Auto Shot Mfg Co. 36 Herkules Equipment Corp. 55 I-CAR 35 Induction Innovations 12 Innovative Tools & Technologies, Inc. 13 Klean-Strip Automotive 21 Malco Products 7 Martech Services Co. 57 Matrix System Automotive Finishes LLC 19 Motor Guard Corp. 57 PPG Industries Cover 2 -1
COMPANY NAME
Pro Spot International RBL Products Rubber-Seal Products S.A.I.M.A. Of N. America SAAB Parts North America Scorpion Truck Bed Linings Shop-Pro Equipment Southern Polyurethanes Spanesi Steck Mfg. Co. Suburban Mfg. Tite Spot Welders Toyota TYC/Genera Corp. Zendex Tool Corporation
PG. #
Cover 3 40, 47, 50, 61 45 31 46 49 25 37 24 50 62 61 Cover 4, 38 41 55
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Product
Showcase Precise Masking The new 3M Precision Masking Tape is constructed with an ultra thin smooth paper backing, which makes it ideal for producing sharp paint lines with both solvent and waterborne paint systems and strong enough to cut through layers of color and clearcoat. Its design also improves UV resistance compared to other masking tapes. The combination of the smooth backing and even adhesion allows painters to tape over freshly painted surfaces sooner with less chance of imprint damage, resulting in improved productivity and superior paint results. 3M www.3M.com Circle 150 for Reader Service
Custom Websites
Urethane Supply Company’s new Bumper & Cladding Coat Adhesion Primer is an advanced, lowVOC, solvent-based primer designed to stick to problem plastics without sanding or scuffing. The primer is designed for easy refinishing of new, unprimed OEM replacement bumpers. It’s compatible with all popular urethane and waterborne base-clear topcoat systems and many single stage products. Urethane Supply Company www.urethanesupply.com Circle 153 for Reader Service
Collision Websites quickly creates custom websites for collision repair shops. Services include search engine optimization (SEO), mobile site creation, social media integration and estimate requests. Sign up today for a 14-day free trial.
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New Bulk Packaging sia Abrasives’ Very Fine Maroon hand pads now come in a new bulk packaging, which contains 5,5000 shrink-wrapped packs of 10 pads. These aluminum oxide hand pads measure 6-by-9 inches and are washable and rust-resistant. sia Abrasives www.sia-USA.com Circle 152 for Reader Service
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No-Sand Primer
January 2013 | BodyShop Business
Bumper Stripper is a unique formulation that will not swell or attack most urethane. The viscous consistency clings to the bumper without sagging. It’s designed to totally remove all refinish material but not the original factory-baked finish. Dominion Sure Seal www.dominionsureseal.com Circle 154 for Reader Service
»| Product Showcase |« Quick-Application Sealer Permasolid Spectro Sealer 5450 is a premium 2K high solid system that can be used as a wet-on-wet sealer, underhood color or as a flexible sealer for plastic repairs. Fast and easy to apply, this low-VOC sealer delivers excellent coverage and a smooth finish. Spraying requires only 1.5 coats with no flash-off time between coats. This product is currently available in black and white. Red, blue, green and yellow will be available in 2013. All colors can be mixed together to get an unlimited number of colors, including shades of gray. Spies Hecker www.spiesheckerUSA.com Circle 155 for Reader Service
Plastic/OEM Surface Primer Dual Prime Select Shade primer surfacer is specially formulated for application on plastic parts and OEM surfaces. It’s ideal for sand-through areas and can be directly top coated with basecoat/clearcoat systems. Dual Prime is available in three colors: MRS7570 Tru-Black, MRS-7572 Medium Gray and MRS-7574 White. Medallion Refinish Systems www.medallionrefinish.com Circle 157 for Reader Service
Ergonomic Sander AirVANTAGE sanders are ergonomically designed to deliver greater control, balance and comfort. The motor generates up to .28 hp for a fast, efficient performance. They’re available in a variety of models: non-vacuum, central vacuum and self-generating vacuum. AirVANTAGE Tools www.airvantagetools.com Circle 158 for Reader Service
Work Gloves with Enhanced Traction 3M’s Work Gloves utilize gripping material that provides a 270 percent improvement in friction when used as a two-part system with other Gripping Material products. The enhanced traction results in reduced slippage and improved productivity with less fatigue. In addition, these gloves are resistant to abrasion and punctures.
Add Sparkle to Finishes PPG Automotive Refinish has supplemented its Ditzler Big Flake product line with seven brilliant new flakes: mini gold, mini silver, red, orange, blue, purple and green. The popular flakes, intended for use with PPG’s Vibrance Collection brand of custom colors and special effect finishes, add intense color and sparkle to custom car, truck or motorcycle finishes. PPG Automotive Refinish www.ppgrefinish.com Circle 156 for Reader Service
3M www.3M.com Circle 159 for Reader Service
Print Custom Images on Tires LAC’s Tire Printer uses inkjet technology to print in full color on a tire’s sidewall. The average printing speed is six to seven minutes for one sidewall, and printed images are durable for one year. LAC Corporation www.laccorp.com Circle 160 for Reader Service
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The
Shop Lane Griffin Vice President of Operations Laney’s Collision Center 䡲 El Dorado, Ark.
Skoal or Copenhagen? Copenhagen.
What is the most common misconception about Arkansas? Probably that we’re backwoods, down home and out of touch with the real world. As a whole, we’re really not behind on the advancements in technology.
Are you proud that PGA golfer John Daly is from Arkansas? That’s okay. I’m not really a big golfer. I’ve never seen him around. We’re kind of located in the middle of nowhere.
What’s with your camouflaged phone clip? That’s just me, man. I enjoy the outdoors.
Are a big-time hunter? I like to duck hunt a lot. We’ve had several good duck hunting trips.
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January 2013 | BodyShop Business
Do you watch that new reality show, “Duck Dynasty?” I’ve seen it a time or two, but I’m not going to say I watch it. The father on the show, Phil, taught my mother in high school back when he was a teacher.
Are you a Razorbacks fan? Not this year. They didn’t do well at all. I don’t keep up with them that much. It’s something to do when there’s nothing else to do. If I don’t watch the game, that’s okay.
How did you celebrate New Year’s? We had steak for dinner and were in bed by 9:30. I was going to celebrate with a duck hunt but it was raining. I guess I’m getting old because I didn’t want to get out there in the rain. BSB
Circle 69 for Reader Service
Circle 70 for Reader Service