WMABA Annual Meeting Announcement
www.wmaba.com
Training the EV Generation
Prepping for a Heavy Summer
May 2021 Volume 14, No. 5 $5.95
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CONTENTS May 2021
24 COVER STORY BY JOEL GAUSTEN
TRENDS TELL ALL: WMABA REVEALS 2021 LABOR RATE SURVEY RESULTS - PART TWO The information you need to know.
EXECUTIVE DIRECTOR’S MESSAGE BY JORDAN HENDLER
6 OVERCOMING “VIRTUAL BARRIERS”
Having fatigue with virtual adjusting? WMABA has the cure.
LOCAL NEWS 12 “VIRTUAL BARRIERS:” A WMABA PANEL DISCUSSION
ON ISSUES FACED IN THE TIME OF COVID-19
WMABA goes face-to-face on May 20 for member meeting.
COLLISION P.R.E.P. PREVIEW
DEPARTMENTS 7
WMABA Membership
16 REAL-WORLD FIGURES: WHY RETAIL RATES MATTER
Application
8
Editor’s Message
BY JOEL GAUSTEN
A look inside a must-attend session.
NATIONAL FEATURE 20 REPAIR TRAINING 2.0: EDUCATING THE EV GENERATION
I-CAR responds to the electric vehicle surge.
INDUSTRY ADVICE: ASK MIKE 32 AS THE COVID-19 THREAT DECLINES, HOW CAN SHOPS PREPARE FOR INCREASED WORK?
13 WMABA Board of Directors 17
WMABA
Sponsorship Page
34 Advertisers’ Index
Tips for getting back in gear. May 2021
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May 2021
May 2021
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EXECUTIVE DIRECTOR’S
MESSAGE
Save your seat! BY JORDAN HENDLER
OVERCOMING “VIRTUAL BARRIERS” There’s probably been a few times in the past year when you wished FaceTime or Zoom didn’t exist and you could look someone in the eye or even take them by the hand and show them exactly what you mean – or what the car needs. Our industry is very personal and hands-on, and taking away the personal aspects is a huge pivot. Since the start of the pandemic, virtual barriers have been brought forward to us by members and non-members alike. It’s a bucket of issues relating to the lack of in-person or face-to-face conversations about repairs, a hodgepodge of problems with virtual adjusting and the creation of extensive delays for the customers. Our upcoming May 20 meeting at Topgolf in Ashburn, VA (see more on page 12) will be just the place to talk about all the transgressions or transitions that you’ve been facing. Our panel of Board members will have candid back-and-forth on what their experiences have been through the last year and what they foresee moving forward. Several of our Board members recently talked about how they want to share these experiences in a way that doesn’t just identify problems; they also want to talk about the solutions they know of or would like to see to move forward. Complaining for the sake of complaining gets us nothing, but sharing these “woes” in a constructive way will bring forward potential change. WMABA meetings are known for giving our community a place to safely air opinions. We keep it professional and
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on track while looking forward positively. If you’re feeling all doom and gloom, this is definitely a way to get back that confidence. Being given a sense of who you can talk with or run ideas by is what our association is all about. This isn’t a clinical, passive group; this is a collective of movers and shakers. Our area is truly amazing, and each repairer should take advantage of this rich history alongside our future-facing personalities. I strongly encourage you to get your seat, have some vittles and, if you want, stay after to play some golf, too! It will be the frank conversation you’ve been craving, and I promise it will not disappoint! Head to wmaba.com for information and registration! H&D
Jordan Hendler
(804) 789-9649 jordanhendler@wmaba.com
Check the WMABA website and newsletters for regular updates and reports from the Executive Director’s perspective.
JOIN Y! TODA May 2021
7
EDITOR’S
Joel Gausten
(973) 600-9288 joel@grecopublishing.com
MESSAGE BACK ON THE ROAD This industry has been through a lot over the past year, but it appears that bright days are finally here again. With the winter season over and more Americans receiving COVID-19 vaccines every day, people will inevitably hit the roads more than they have since the early part of 2020. This means that collision repair facilities will soon have schedules that match or even exceed their numbers before the pandemic. While this is encouraging, it can also be daunting for some businesses to get back into fighting shape after being out of the ring for so long. In this month’s “Ask Mike,” industry consultant and longtime WMABA supporter Mike Anderson of Collision Advice offers some great words of wisdom and food for thought to help owners, technicians and office staff get ready for what’s to come.
Of course, one of the best ways to plan for the future is to know where your numbers are today. Last month, we published the first part of the results of WMABA’s latest Labor Rate Survey. This month, we wrap up this bi-annual endeavor by detailing the WMABA region’s outlook on a slew of critical business practices and repair processes. We hope the results of this most recent Labor Rate Survey give you plenty to consider as you formulate your game plans for the rest of 2021 and beyond. And if the results point out things you don’t like, it is within your power as a business owner to change them. On a personal note, I can’t tell you how excited I am to finally mark up my calendar with upcoming in-person industry events. As of this writing, the next Collision Industry Conference (CIC) is scheduled as a live event in Cleveland this July. WMABA will again participate in the Alliance of Automotive Service Providers of New Jersey’s (AASP/NJ) NORTHEAST® Automotive Services Show in Secaucus, NJ this September 10-12 by providing a live version of its popular Collision Professional Repairer Education Program (Collision P.R.E.P.). In addition, the SEMA Show is slated to return to a live format at the Las Vegas Convention Center this November. As someone who normally spends 100-plus days on the road each year for this industry, I can’t wait to see airport terminals and hotel lobbies – and many of you! – again. I’ve spent way too many days in my home office. As we continue to return to more familiar living, I wish you all well in making the transition back to an everyday “normal.” We’re getting through this…finally.
H&D WMABA OFFICERS
PRESIDENT Torchy Chandler torchy.chandler@gmail.com 410-309-2242 VICE PRESIDENT Bill Hawkins hawkinswilliamjr@gmail.com 510-915-2283 SECRETARY Phil Rice phil@ricewoods.com 540-846-6617 IMMEDIATE PAST PRESIDENT Mark Schaech, Jr. markschaech@gmail.com 410-358-5155
BOARD OF DIRECTORS
Don Beaver (donbeaver3551@gmail.com) 443-235-6668 Rodney Bolton (rbolton@aacps.org) 443-386-0066 Kevin Burt (kevinburt@walkermillcollision.com) 301-336-1140 Kris Burton (kris@Rosslynautobody.com) 703-820-1800
ADMINISTRATION
Barry Dorn (bdorn@dornsbodyandpaint.com) 804-746-3928 Ben Gibson (bgibson@richmondmarinecenter.com) 804-355-8151 Steven Krieps (srkrieps@live.com) 304-755-1146 Danny Szarka (danny@dynamiccollisionservices.com) 410-500-9200
EXECUTIVE DIRECTOR Jordan Hendler (jordanhendler@wmaba.com) 804-789-9649 WMABA CORPORATE OFFICE P.O. Box 3157 • Mechanicsville, VA 23116
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May 2021
STAFF PUBLISHER
Thomas Greco thomas@grecopublishing.com
SALES DIRECTOR
Alicia Figurelli alicia@grecopublishing.com
EDITORIAL DIRECTOR
Joel Gausten joel@grecopublishing.com
EDITORIAL/CREATIVE COORDINATOR
Alana Bonillo alana@grecopublishing.com
OFFICE MANAGER
Donna Greco donna@grecopublishing.com
PRODUCTION COORDINATOR
Joe Greco .joe@grecopublishing.com
PUBLISHED BY TGP, Inc. 244 Chestnut St., Suite 202 Nutley, NJ 07110 973-667-6922 FAX 973-235-1963
Reproduction of any portions of this publication is specifically prohibited without written permission from the publisher. The opinions and ideas appearing in this magazine are not necessarily representations of TGP Inc. or of the Washington Metropolitan Auto Body Association (WMABA). Copyright © 2021 Thomas Greco Publishing, Inc. Stock Images courtesy of istockphoto.com.
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May 2021
11
LOCAL
Finally face to face.
NEWS “VIRTUAL BARRIERS:” A WMABA PANEL DISCUSSION ON ISSUES FACED IN THE TIME OF COVID-19 On May 20, the WMABA community will meet at Topgolf in Ashburn, VA for its Annual Meeting – the first in-person event the association will hold in well over a year. In addition to introducing the new WMABA Board of Directors, the event will feature a panel discussion with several Board members who will be discussing “Virtual Barriers,” including the added hurdles in insurance relationships and other complications brought about during the pandemic. “This is an ever-evolving and hypersensitive area of collision repairers’ lives right now,” WMABA Executive Director Jordan Hendler says. “There’s been a steady increase in volatility around repair negotiations between insurers and repairers, and the customer is trapped in the middle. Many want to improve relations and don’t know how. Just in our recent Board meeting, our directors were discussing the difficulties they’ve been facing, knowing everyone else is feeling the same. We’d like to have a candid conversation with our membership community to look at the situation in-depth – what’s working and what’s not. The pandemic is different for our industry in that we’ve been working all along but with even more pressures and chaos than before, including a downturn in accident frequency. Vehicle technology is changing at a pace none of us are ready for – even the most learned and equipped shops are struggling to keep up. Also, the wave of electric vehicles headed our way will separate the wheat from the chaff, as they say, leading to yet another revolution in our industry. “It has been frustrating even today dealing with ADAS, performing routine vehicle scans and post-repair diagnostics or calibrations,” Hendler adds. “With that continuing to change, there’s still a crazy amount of pushback by the third-party payers to reimburse for costs. There’s a lot of additional research time, and calibrations take much longer. It’s very frustrating that insurers charge premiums to insure these high-tech vehicles, but when it comes time to get them back to pre-accident condition, they want to cut costs – and even corners. But the repairer is responsible for that vehicle’s systems working properly and also for a subsequent accident. They really just have no choice here. There’s just so much to talk about on all fronts, and having candid conversations on these topics at our upcoming meeting is so needed.”
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May 2021
2021 WMABA Annual Meeting & “Virtual Barriers” Panel Discussion MAY 20, 2021 - 6:30pm START TOPGOLF 20356 Commonwealth Center Dr. Ashburn, VA 20147
Contact (804) 789-9649 or jordanhendler@wmaba.com for info Above all, WMABA hopes that members will make it a point to attend this gathering to have a long-overdue chance to finally connect with their fellow industry members in one place – and without Zoom calls. “With the pandemic, and us not being able to meet as members in person, it’s been hard to keep that feeling of community in a virtual format. We hope to have an informative and refreshing gettogether where we can talk about all the current issues over a meal. Conversation is so much more conducive face to face – or mask to mask – and we could not be more encouraged by the fortitude our members show. This is a huge opportunity for all those repairers who want to broaden their circles of influence to network with peers. You can’t quite put your finger on it, but everyone always leaves feeling part of something bigger than themselves. It gives hope.” For more information on the May 20 Annual Meeting, please visit wmaba.com or contact Executive Director Jordan Hendler at (804) 789-9649 or jordanhendler@wmaba.com. H&D
May 2021
13
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May 2021
15
COLLISION P.R.E.P.
Legitimizing Labor Rates.
PREVIEW REAL-WORLD FIGURES: WHY RETAIL RATES MATTER As revealed in last month’s coverage of the latest WMABA Labor Rate Survey, many collision repair facility owners in the region still consider the volume wholesale rates they offer to insurers to be the same as the retail rates they would offer a consumer not going through their carrier to pay for an auto body repair. To help member shops gain greater insight into the importance of differentiating between these two rates, WMABA will welcome Tim Ronak, senior services consultant for AkzoNobel Performance Coatings, for “What Is a ‘Retail Door Rate’ and Why Market Surveys Should Not Include Contracted Rates,” a May 12 virtual presentation in its Collision Professional Repairer Education Program (Collision P.R.E.P.). Ronak’s course will explore a host of topics, including how to calculate a loaded labor true gross profit margin percentage, the impact of credit cards on profitability (and how a retail Labor Rate can help offset that impact), the concept of the Sherman Antitrust Act and why shops should protect themselves from the consequences of the Clayton Antitrust Act by never using a contracted rate as part of any Labor Rate survey. The presentation will dive into the fundamental differences between wholesale and retail rates, stressing that a wholesale pricing model is typically related to purchase volume and wholesale pricing arrangements are typically based on volume. “Can customers buy fenders at the same price as a body shop? In most cases, they cannot,” Ronak explains. “The reason they can’t is because shops buy a lot of fenders. On a group or volume purchase, you’re given a preferred vendor discount. A customer only buys one, so they don’t qualify for that volume discount.” In addition to considering volume in
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May 2021
determining a retail rate, shops need to acknowledge how consumers are paying for their services. With the vast majority of the motoring public using credit cards, Ronak suggests that credit transaction fees – which typically cost a shop three to four percent of the overall charge – should not be overlooked. “In order to be able to compensate for the additional cost of a processing fee to ensure a business actually collects the amount of money they expect for the full cost of repair, they need to charge some amount more than the full repair cost to ensure they actually capture the revenue they need beyond what they’re actually billing their customers, because the customer is going to pay with the convenience of a credit card. This is different than an insurance company that’s paying for multiple jobs with a single check with no additional fees attached to it. If you only have one door rate and you charge
customers the same as you charge insurers, you’re missing out because consumers that pay with a credit card actually pay less than a discounted wholesale rate. In the end, you make even less than you expected based on your pricing model.” Of course, credit card fees aren’t the only consideration in developing a realistic retail Labor Rate. “The only thing left that’s really up to businesses to determine is their individual labor gross profit, and they do this by controlling their labor costs and setting the price they charge out for the labor per unit they bill. The five general sales categories most shops deal with are metal labor, refinish labor, materials, parts and sublet, with labor as the only category that shops have some specific control in pricing. “The only real flexibility a shop has to establish pricing that can offset the ‘credit continued on pg. 34
COLLISION P.R.E.P.
VIRTUAL EVENTS SCHEDULE May 12 - 12pm EST What Is a ‘Retail Door Rate’ and Why Market Surveys Should Not Include Contracted Rates [Tim Ronak, AkzoNobel Performance Coatings] This course will cover a variety of topics, including: • Why a retail door rate is so important; • How to compute your own door rate; • The credit card effect; and • Consequences of not having a door rate.
June 9 - 1pm EST Differentiating Labor Rates Based on Certification, Skillset, Tooling and Training [Mark Olson, VECO Experts] Mechanical, structural, aluminum or certified repairs are all different categories of Labor Rates. Understanding what goes into establishing a rate and billing based on technicians and type of repair performed are all important distinctions for proper repair documentation. Get insight and deeper knowledge into the variable rates in today’s collision repairs.
wmaba.com/collisionPREP
WMABA THANKS
YOU
WMABA thanks their generous supporters of the
LEVEL 1
Corporate Sponsor Program for 2021!
We encourage YOUR SUPPORT of those who SUPPORT US! For more information about the sponsorship program, please contact Executive Director Jordan Hendler at (804) 789-9649 or email jordanhendler@ wmaba.com
LEVEL 2 BAPS Auto Paints & Supply • Certified Automotive Parts Association FinishMaster • Single Source
www.wmaba.com
National Coatings and Supplies • WheelsOnsite
May 2021
17
NATIONAL
FEATURE REPAIR TRAINING 2.0: EDUCATING THE EV GENERATION As explored in our March 2021 issue (“Electric Shock: Why EVs Will Soon Change Your Business”), electric vehicles (EVs) are the latest major wave to impact this industry. As these automobiles begin to arrive on America’s roadways in greater numbers, every shop owner needs to seriously ask themselves if their technician base will be able to gain the training and expertise necessary to safely handle and repair them – and who will serve as the source of this information. With a growing number of industry members calling for guidance as they broaden their horizons to embrace EVs, I-CAR is one educational entity working to meet this demand. “Today, an electric vehicle is very stable as designed; what we probably need to understand is how stable it is if it’s in an accident,” explains I-CAR Vice President of Technical Products, Programs & Services Jeff Peevy, who returned to the organization last summer after a five-year stint as president of the Automotive Management Institute (AMI). “When you take a technician who’s not trained and they begin to raise the hood on these cars and start to do things to [them], it can become very dangerous. So, a real high priority for us is to help the shops understand what they know and what they don’t know about electric vehicles, with safety being a big concern. A lot of where the training and so forth goes will be determined in that relationship we have between the car manufacturers and the repairers.” As of this writing, I-CAR has seven EV-related courses available (with more information at rts.i-car.com): Hybrid Vehicle Identification & Damage Analysis: This onehour course explains the different types and parts of hybrid and electric vehicles. Hybrid, Electric & Alternative Fuel Vehicle Service: This course teaches students the safety precautions when working with compressed natural gas (CNG) and liquid propane gas
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(LPG) vehicles and explores safety parameters for personnel, vehicle systems/parts and shops. Introduction to Electric Vehicles: This 30-minute course introduces the different types of EVs on the road today. Understanding High Voltage Safety: This 45-minute course explains the elements of electricity and the relationship between voltage, current and resistance with high-voltage systems. Electric Vehicle (EV) Initial Inspection & Handling: This course helps the learner understand the different considerations surrounding these and other issues: When an EV shows up at a collision repair facility, how should it be handled/where should it be parked/should it be quarantined? Is it safe to bring it into the building? What types of concerns are there with high-voltage battery condition? What do the dash warning messages mean? Is it safe to move? How should it be moved? Electric Vehicle (EV) Damage Analysis: This course explores safety, cautions and warnings; identify systems and parts locations and discuss diagnostic trouble codes (DTCs) and the importance of pre-and post-repair scans. Electric Vehicle (EV) Service Considerations: This course is not intended to replace OEM service information but will be designed to help the collision industry understand some of the unique considerations and requirements associated with EV system service. This course addresses (among other things) typical R&I/R&R of EV system parts associated with common collision (or other loss) repairs.
High-voltage learning. BY JOEL GAUSTEN
According to Nick Notte, I-CAR’s vice president of sales and marketing, the organization hopes to broaden its audience beyond the one that would typically seek education of this nature. “We’re looking at expanding the scope of these courses and possibly getting them out to the towing community and those first responders who grab these cars and may not know how to handle them.” So, where does the industry at-large currently stand in terms of its readiness to take on EVs? According to Peevy, the answer to that question is hazy at best. “I think in the industry, the 10,000 or so shops that are doing their best to stay abreast – most of which are Gold class – provide some insight into probably the more progressive [facilities], but I don’t see the preparedness right now for repairers. It’s very, very low, and most of it is driven by OEM certifications. Even when the shops go through OEM electrified vehicle training, what a lot of them are still told is what to do [to prepare] to send it to the dealer. We’re going to continue to see that for a while.” While the industry may not be fully up to speed with the EVs, that doesn’t mean that production of these vehicles will be slowing down. Fortunately, Peevy reports that the information flow between OEMs and I-CAR in regard to EVs is stronger than ever. “Our relationships with the car manufacturers are extremely good. The car manufacturers, in general, are really good in sharing information with us. We’re gearing ourselves up to continue to expand and grow so that we not only are positioning ourselves to work with the car manufacturers but to support them as well […] It’s probably one of those periods of time when we all need each other more than ever – and we all recognize that.” As shop owners and repairers continue to embrace the reality that EVs are unlike any other kind of automobile they’ve ever experienced, the traditional lines between mechanical service work and collision repair will likely blur like never before.
“There has always been kind of a gap between us, but that gap’s closing very quickly,” Peevy observes. “I think probably one of the biggest shifts and challenges is going to be hiring people who embrace [EVs] and have the skillsets and experience to be very comfortable working on all of this computerization and electrification.” Although focusing on EVs should be a priority for today’s forwardthinking (and appropriately trained and equipped) collision repair facility, it is equally critical not to fall victim to believing that this is the only trend worthy of attention. The rise of EVs should be seen for what it truly is – one of many exciting (if somewhat initially daunting) developments that will drive the industry into the future. Not surprisingly, Peevy is quick to stress that I-CAR has done a lot of legwork already and pledges to be there for technicians and owners every step of the way. “Today, the big thing seems to be battery-powered electric vehicles, but that’s just the next thing – there’s stuff lining up behind that. I-CAR is not unlike a collision repair shop; we have a lot to invest in and a lot to learn. We needed to set ourselves up so that we culturally could take our ability to expedite new technology, research it, learn, work with the car manufacturers and convert that into training quicker and quicker – and just be more efficient and effective at it. “This time next year, we’re probably going to be talking about things that we really aren’t overly aware of today […] It’s just going to become one thing after the other,” he adds. “The ability to adapt and move quickly is going to be the key.” H&D
Executive Director’s Thoughts The wave of electric vehicles is just coming; there’s no way around it. The OEM repair procedures and training, in addition to I-CAR training, are the saving graces to keep on top of what is required to fix these vehicles properly and safely. Safety is a huge concern with these vehicles – and even for the first responders. Knowing more about systems in advance of them arriving is key to taking much of the stress out of it!! - Jordan Hendler
May 2021
21
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May 2021
23
COVER STORY
TRENDS TELL ALL: WMABA REVEALS 2021 LABOR RATE SURVEY RESULTS - PART TWO Last month’s Hammer & Dolly featured the first part of the results of WMABA’s latest Labor Rate Survey. Although providing statistically valid information on the rates paid by repair facilities is vital, these figures only present half the story. To truly gauge where the WMABA region is at, the association also asked respondents a series of questions designed to provide a look inside the industry’s current mindset with respect to common repair procedures, in-house operations, relations with insurers and more. The results in this month’s issue showcase WMABA’s findings in these areas.
WHICH BENEFITS DO RESPONDING BUSINESS OWNERS PAY FOR?
Yes, fully paid
Yes, partially paid
No
Health Insurance
7.92%
65.35%
26.73%
Dental Insurance
6.00%
44.00%
50.00%
Vision Insurance
4.00%
40.00%
56.00%
Long-term Disability
2.11%
21.05%
76.84%
Life Insurance
16.16%
19.19%
64.65%
Paid sick leave (after a set period)
51.00%
19.00%
30.00%
Paid vacation (after a set period)
83.00%
10.00%
7.00%
Personal leave (after a set period)
39.80%
9.18%
51.02%
401(k) or retirement program
32.65%
32.65%
34.69%
Performance Bonus
37.00%
25.00%
38.00%
Yearly cost of living increase(s)
10.10%
13.13%
76.77%
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May 2021
Big questions, meaningful answers.
BY JOEL GAUSTEN
RESPONDENTS SHARE THEIR VIEWS ON STANDARD PROCEDURES
DO YOU BELIEVE THIS IS A REQUIRED OPERATION?
DO YOU CURRENTLY PERFORM THIS OPERATION?
“Tint” the color
94.06%
86.14%
“Materials” to tint the color
92.39%
80.43%
“Color, sand and buff” and/or denib surface blemishes
96.15%
84.62%
“Materials” needed to denib or buff a vehicle
96.94%
81.63%
To remove tape or painted stripes before refinishing
98.02%
87.13%
Feather, fill, block and prime on repaired panels
97.06%
85.29%
Feather, fill, block and prime on welded panels “Mark-up” or “admin” on sublet (towing, upholstery, mechanical, PDR, etc.)
96.91%
83.51%
96.12%
84.47%
Disable and enable “interlock” devices to move vehicles
96.59%
76.14%
“Clips and fasteners” needed in the repair process
98.10%
88.57%
“Bagging” vehicle to “prime” and for “final refinish” “Bag” opening to “prime” and for “final refinish”
98.02%
83.17%
96.77%
83.87%
“Bonding materials” in the repair process
97.03%
86.14%
“Undercoating,” installation and removal
98.06%
84.47%
“Structural foam,” installation and/or removal
98.04%
85.29%
“Check and test seat belts” being used in the accident
96.81%
75.53%
“Pressure test” cooling systems after front-end damage
95.51%
77.53%
“Prep raw plastic” when recommend by paint supplier “Set up and pull” to access repairs
97.12%
87.50%
98.06%
86.41%
“Weld thru primer” and/or “cavity wax” when needed
98.08%
89.42%
Replacement of information labels, parts and labor
98.08%
88.46%
Removal and replacement of protective coatings
95.56%
84.44%
Reset memory functions (e.g., radio codes, sensors, etc.)
95.83%
77.08%
“Jig” rental when recommended by vehicle manufacturer
95.08%
60.66%
Repairing “weld burn, including grinding and prepping”
97.85%
82.80%
RESULTS CONTINUE ON NEXT PAGE May 2021
25
COVER STORY 2021 WMABA LABOR RATE SURVEY RESULTS (CONTINUED) HOW DO SURVEY PARTICIPANTS FEEL ABOUT INSURER/SHOP RELATIONS? YES NO Do you believe insurers rate you on the use of alternative parts to OEM, such as used or aftermarket?
88.6%
11.4%
Do you feel many insurers try to control or insert themselves into the repair process, including selection of parts and repair methods used?
98.1%
1.9%
Do you have an insurer who requires you to order parts from a particular vendor or through a particular online procurement system?
68.0%
32.0%
Do you believe insurer reimbursement rates are fair to support adequate profit for continuing education, certifications and new equipment?
11.4%
88.6%
Would (or does) ordering parts or materials through a required third-party bidding system increase your cycle time and customer dissatisfaction?
75.8%
24.2%
Have you been told you “are the only one” who charges for what you feel is a legitimate, reasonable and necessary operation? 90.3%
9.7%
Do appraiser(s) tell you, “We can’t pay for that because it is against insurance company policy,” even though you knew it was a fair, reasonable and necessary item?
98.0%
2.0%
Do you feel that after an insurer is notified, that two business days is an adequate time frame for an insurer to come to your shop to inspect, appraise the damage and provide an estimate?
87.3%
12.7%
Is it your experience that a good portion of insurance company representatives will intentionally write “low ball” estimates that omit obvious visible damage?
95.1%
4.9%
Do inadequate or poorly written estimates by insurance company representatives delay the repair process and cost your shop time and money while you rectify mistakes?
98.1%
1.9%
Do you feel appraisers intentionally omit vital processes in hopes the shop will not correct and amend the mistake, giving the insurer unfair financial gain?
93.1%
6.9%
Have you feared retribution from insurers if you charged for a job performed that you feel is fair, reasonable and necessary but that they may not approve of?
75.5%
24.5%
Do you feel insurers are using their “power,” together with a weak economy, in an attempt to coerce shops into accepting less than a fair amount?
92.2%
7.8%
Have you experienced an insurer(s) who has declared a vehicle a total loss when you felt the vehicle was an easy, safe repair and the vehicle owner wanted it repaired but did so because the insurer got a high salvage value?
78.4%
21.6%
Do you experience insurers retaining payment, but telling you that you are “holding the car hostage” when they had more than adequate time to issue payment?
81.4%
18.6%
Do you feel many insurers’ initial estimates lack proper repair procedures necessary to fix the car to pre-accident condition?
98.0%
2.0%
In this year’s Survey, WMABA provided respondents with a list of more than 20 collision repair-related procedures and asked if they considered each a required operation. The number of respondents who answered “yes” rose in all categories. One significant result was the nearly eight percent rise in “yes” answers to “materials” to tint the color from our previous Survey published in 2018. In addition to acknowledging these various operations as required, the Survey revealed that the vast majority of respondents are also performing
26
May 2021
them: “Color, sand and buff” and/or denib suface blemishes rose to 84.62 percent this year from 79.41 percent in 2018; “materials” needed to denib and buff a vehicle rose to 81.63 percent from 73.33 percent; and “mark-up” or “admin” on sublet (towing, upholstery, mechanical, pdr, etc.) is now at 84.47 percent after hitting 78.13 percent three years ago. In terms of shop-insurer relations, the results were a mixed bag. CONTINUED ON PG. 28
May 2021
27
COVER STORY 2021 WMABA LABOR RATE SURVEY RESULTS (CONTINUED) SURVEY RESPONDENTS REVIEW A NUMBER OF QUESTIONS THAT RELATE TO THEIR DAILY BUSINESS:
YES
NO
Is it your experience that blending a panel takes as long, or longer, than refinishing a new undamaged panel?
95.2%
4.8%
Does it take more skill and materials to “blend” a panel versus refinish a full panel?
96.1%
3.9%
Is “clean up” time necessary on most “LKQ” or used parts?
99.0%
1.0%
Can you blend or melt clear coat within a panel and give a lifetime warranty?
9.7%
90.3%
Is it necessary to pre-clean most vehicles prior to entering the shop?
76.5%
23.5%
Given the advancements in system compatibility, should you have the freedom of choice for your estimating system provider?
100.0% 0.0%
Do used structural parts (e.g., quarter panel, hinge pillar, rocker panel, radiator support and apron or frame rails) take more “trim” time than new parts?
97.0%
3.0%
Do you feel that modern vehicles (with boron steel, structural aluminum, multiple airbags, collision avoidance systems, laser welds, etc.) are more difficult to work on than older vehicles without those similar characteristics?
98.0%
2.0%
Do you feel colors on newer vehicles are more difficult to match than those 5-10 years older?
83.2%
16.8%
Do rental car companies unnecessarily contact you about the status of vehicle repairs, requesting numerous status reports and completion dates?
83.3%
16.7%
Would you prefer an itemized calculator for materials based on a computer software program (e.g., PaintEx, PMCLogic, etc.) versus compensation based on current random multipliers using an hourly rate?
80.6%
19.4%
Have you been able to provide across-the-board increases in the pay and benefits of your employees in the past five (5) years?
27.7%
72.3%
On a positive note, the number of respondents who indicated that an insurer requires them to order parts from a particular vendor or through a particular online procurement system dropped down to 68 percent from 75.8 percent in 2018. However, only 11.4 percent of respondents believe that insurer reimbursement rates are fair to support adequate profit for continuing education, certifications and new equipment – down from 15.2 percent in the previous Survey. Interestingly, 100 percent of respondents said that they should have the choice in the estimating system they use – food for thought in light of State Farm’s move to CCC as its preferred system for its Select Service facilities. Considering COVID-19’s dramatic impact on the collision repair industry and beyond, it comes a little surprise that the number of respondents who feel that vendors are using their “power,” together with a weak economy, in an attempt to coerce them into accepting less than a fair amount rose to 92.2 percent this year from 84.4 percent in the previous Labor Rate Survey published in 2018. As the industry enters a safe and more productive era with
28
May 2021
the decline of COVID-19, the WMABA Labor Rate Survey provides the kind of information that shops can use to better identify current concerns and plan for the future. Whether the data presented are in line with your shop’s daily activities or indicate the need for reflection and action, now is a perfect time to utilize WMABA’s research to your advantage. H&D
Executive Director’s Thoughts These Survey responses are at times in alignment with what you would “think,” but they aren’t at other times. As an example, we have 93.1 percent saying they feel appraisers intentionally omit vital processes for unfair financial gain. This is fraud, in my mind. If you knew a vehicle needed something to be road- and safety-worthy for the customer – a family that rides in that vehicle depending on all systems to work – then how can you ethically omit anything? - Jordan Hendler
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May 2021
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May 2021
31
INDUSTRY
ADVICE
ASK MIKE:
As the COVID-19 Threat Declines, How Can Shops Prepare for Increased Work? This month, we “ASK MIKE” to share his thoughts on how shops can best prepare for increased work over the next few months as COVID-19 gets more under control. We at Hammer & Dolly hope you find this following exchange useful, and we encourage you to reach out to us if you have a question for Mike on this or any industry-related matter that he can answer in a subsequent issue. Hammer & Dolly: With the number of COVID-19 vaccines increasing and the weather getting nicer, it’s very likely that the collision repair industry is about to get the heaviest flow of work it’s had in well over a year. What are some ways that shops can prepare for this jump in customer traffic and position themselves to take advantage of a marketplace finally getting back to “normal”? Mike Anderson: I’ve been hearing from people in the industry that things are picking up and they’re getting busier. As we get deeper into spring and summer, I think a lot of people are going to be driving more due to them having cabin fever during the winter. That bodes well for us. Gas prices are going up, but cabin fever from the winter is going to override that concern. Shops need to really start getting prepared for that. They need to make sure their spray booths are maintained and that everything is good to go so they won’t have any issues with them as they move through spring into summer. If there is any online training offered or any OEM or I-CAR training they need to get done before the end of the year, they should jump on that now so when it does get
32
May 2021
really busy, they’re not trying to figure out how to fix the cars and get the training requirements done. As someone who does training for OEMs, I end up with phone calls from people saying, ‘Oh, my God! I need to get five people into training or I’m going to lose my certification!’ There’s a mad rush at the end of the year, so shops should take the time now to be proactive and get some of those things done so that they can take advantage of this work that’s going to break loose. Another thing they should do now is start talking to their people about vacations. The last thing they want to do is let a number of people off at the same time. H&D: I think it’s reasonable to predict that some technicians and other shop staff will feel overwhelmed as work picks up again, which is only natural. How can facilities avoid this problem? MA: I think implementing a really good scheduling program would help. I’ve always preached that we should stagger our drop-offs Monday through Friday in incremental timeslots – maybe every two hours. There are shops that are still caught up in having all the cars coming in Monday, Tuesday and Wednesday, and then they push them out Thursday and Friday. COVID-19 gave us the perfect excuse to stagger drop-offs Monday through Friday due to social distancing concerns. If your shop is still a little slow right now, implement a good scheduling process. Make sure you have the ability for customers to schedule off your website or Google Business listing. Having a good scheduling process implemented will enable you to stagger your drop-offs and be more productive and efficient in the way we produce repairs. There are a lot of great resources out there for scheduling.
Safer travel, more jobs. Do you have a question for Mike? Contact Hammer & Dolly Editorial Director Joel Gausten at joel@grecopublishing.com or (973) 600-9288, and we’ll ask him in a future issue.
I have a free “Scheduling Best Practices” video on YouTube [bit.ly/ MAschedulingbestpractices], and I think every paint company offers something in regard to scheduling. If you use a management system like CCC, Axalta’s ProfitNet or Mitchell, reach out to them and say, ‘Hey, can I get an overview of your scheduling system? I want to make sure I understand it and make sure that everybody is working well on it.’ As we get further into spring and summer weather, I also encourage shops to think about trying to do some kind of teambuilding exercise. Maybe you can have a company softball game or find another shop with a team. Maybe you can take your staff to a paintball place or something. Get your employees out there and do some kind of organizational activity that’s after hours – just something to help them shake off the COVID19 funk. Mike Anderson is an Accredited Automotive Manager (AAM) and the former owner of Wagonwork Collision Centers, two highly acclaimed shops located in Alexandria, VA. He has served as a member of many industry organizations throughout his career, including the WMABA Board of Directors, the Mitchell Advisory Board, the MOTOR Advisory Board, the ASE Test Review Committee, the National Auto Body Council, the Collision Industry Conference and the Society of Collision Repair Specialists. Additionally, he is a past Virginia SkillsUSA chairman, serves as a facilitator for Axalta Coating Systems’ highly recognized Business Council 20 Groups in both the US and Canada and facilitates numerous courses for Axalta Coating Systems’ Educational Series. He currently offers expert industry consulting via his latest venture, Collision Advice (collisionadvice.com).
I’ve seen a lot of shops that suddenly get busy but have employees who are still kind of complacent after a long period of slow work. Just as some people get up in the morning and do jumping jacks, shops need to figure out ways to get the blood flowing in their organizations again. H&D: It’s very easy for people to focus on all the negatives of the past year, but do you think COVID-19 made the industry stronger in some ways? MA: There have been a lot of benefits to COVID-19 that will help shops moving forward. People were able to get back to the basics in trying to figure out how to get the keys. We had so much work before COVID19 that some people got a little bit lazy and didn’t follow up on every single customer like they should have. There were some shops that let their receivables and parts credits
get out of control but got them under control during COVID-19. It’s important that shops don’t let those things fall behind again once it gets busier. I’ve seen a lot of shops streamline their inventories. I’ve also seen shops realize they were overstaffed, and they right-sized their businesses. There were others that probably had never been slow enough to really take the time to go through and clean up their shop. Some people refer to that as ‘5S’ – sort, set, shine, standardize and sustain. I also think a lot of shops learned that they had to write more complete estimates to get every dollar on every estimate when there weren’t as many claims. That has led to improvements in estimating processes. I could go on and on, but I think there have been more positives that have come from this than a lot of people realize. H&D
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COLLISION P.R.E.P. PREVIEW continued from pg. 16
card fee effect’ of consumers using a credit card is to adjust a door rate,” he adds. “When adjusting that Labor Rate, the effect of that change is typically only on 41 or 42 percent – the portion of sales that are labor – of a typical shop’s total sales. This means that for a card transaction fee of a modest four percent of the total charges placed on the card, the Labor Rate may need to be adjusted higher by 11-15 percent to recoup the actual fees charged by a credit card processor when a consumer makes a retail purchase.” Ultimately, this discussion will provide attendees with a path forward in embracing a retail rate as opposed to basing all of their financial goals on what they’ve agreed to charge insurers. “It’s healthy and reasonable for a retail door rate to exist in the market, and it’s important for businesses to understand the difference of that.” To register for this May 12 course, please visit wmaba.com/collisionprep. H&D
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May 2021
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