Hammer & Dolly July 2023

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Rockville Audi 1125 Rockville Pike

Rockville, MD 20852

Parts Direct: 301.296.2870

Parts Fax: 301.762.5055

www.rockville-audi.com

Audi Silver Spring 3151 Automobile Boulevard Silver Spring, MD 20904 844.413.6929

Parts Direct: 301.890.3015

Fax: 301.890.3748

Email: wholesaless@mileone.com

www.audisilverspringparts.com

MESSAGE PRESIDENT’S

I THOUGHT SUPPLEMENTS WERE SUPPOSED TO BE HEALTHY?

Supplement: a part added to or issued as a continuation of a book or periodical to correct errors or make additions – MerriamWebster Dictionary

In the course of appraisal reviews, repair planning and the other services I am involved in, the one thing that seems strange is today’s supplement process. It seems as though what was intended for a few missed items here and there has morphed into a tool to drag things out. To say it creates confusion and distrust is an understatement. One moment, you are providing a consumer an “estimate,” which is asinine by definition; the next, you are explaining how you missed $4,000 in additional damages. While you read that and think “No, that’s not what happened at all,” take a moment and think about how the consumer views what happened, not what you feel. And how does this save premium dollars if you’re an insurer?

Insurance appraisers (at times, in today’s environment) seem to be incredibly understaffed and under-trained and have created a claims process in which you write only what you can see…and then “we can just handle it with a supplement.” To a consumer it seems like no big deal, and at times, it almost makes sense. They hear, “Let’s just get the claim going. Go to any shop you like, and we will take care of everything after they show us any additional damages.” Sounds easy enough, right? (Additionally, when you send in a “supplement,” how are you documenting the process from initial estimate to supplement one or two, three, four and five.)

The 2023 Crash Course Report from CCC showed the highest supplement rates in recent years, with five percent of all repairable appraisals including four or more supplements; supplement as

WMABA OFFICERS

PRESIDENT Steven Krieps steve@gregclineauto.com 304-755-1146

VICE PRESIDENT Rodney Bolton boltonconsulting61@gmail.com 443-386-0086

TREASURER Kris Burton kris@rosslynautobody.com 703-820-1800

SECRETARY Phil Rice phil@ricewoods.com 540-846-6617

IMMEDIATE PAST PRESIDENT Torchy Chandler Torchy Chandler torchy.chandler@gmail.com 410-309-2242

BOARD OF DIRECTORS

Don Beaver (donbeaver3551@gmail.com) 443-235-6668

Barry Dorn (bdorn@dornsbodyandpaint.com) 804-746-3928

ADMINISTRATION

EXECUTIVE DIRECTOR

Jordan Hendler (jordanhendler@wmaba.com) 804-789-9649

WMABA CORPORATE OFFICE

P.O. Box 3157 • Mechanicsville, VA 23116

a percentage of total repair cost is hitting 40 percent. So, as an industry, are we really so bad at our job that we can only capture 60 percent of the actual damages in our initial “estimates?” The data would suggest yes; however, as I type this, I’m yelling yeswhile knowing that, in some cases, what happens is a shop takes a car in, disassembles it, spends eight to 16 hours going through everything, photo documenting and researching procedures to put together a full repair plan to submit to an insurer on behalf of a policyholder or claimant. A rational mind would believe that, if that’s done, it would be one and done as it were. Right? Wrong! You explain everything to the vehicle owner, they understand and ask you to submit to the insurers on their behalf - which you do, sending them copies. After four to five days go by, what you get back is 15 to 20 percent more than what the insurer originally wrote, but all the other missing stuff is nowhere to be found. Not denied, not mentioned, just gone. So, now we supplement again? With most carriers funneling supplements through an online system they created, it always looks like you are submitting for NEW additional damages. So, whose fault does it appear to be?

It’s questions like these (and many more) that have me wondering whether the current system is designed to work or to intentionally fail. It also seems like efforts to help the collision industry are fueling the fire. How much is this costing your company versus ROI? I did not write this to offer answers. I have my opinions, sure, but more importantly, I hope that you take a moment and consider what I am really saying with the process I am following. H&D

HAMMER & DOLLY STAFF

PUBLISHER Thomas Greco thomas@grecopublishing.com

SALES DIRECTOR Alicia Figurelli alicia@grecopublishing.com

EDITORIAL/CREATIVE Alana Quartuccio COORDINATOR alana@grecopublishing.com

MANAGING EDITOR Chasidy Rae Sisk chasidy@grecopublishing.com

PUBLISHED BY TGP, Inc. 244 Chestnut St., Suite 202 Nutley, NJ 07110 973-667-6922 FAX 973-235-1963

Bill Hawkins (hawkinswilliamjr@gmail.com) 510-915-2283 John Shoemaker (john.a.shoemaker@basf.com) 248-763-4375

OFFICE MANAGER Donna Greco donna@grecopublishing.com

PRODUCTION Joe Greco COORDINATOR joe@grecopublishing.com

@grecopublishing

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 © 2023 Thomas Greco Publishing, Inc. Stock Images courtesy of istockphoto.com.

www.grecopublishing.com

Co-celebrating decades of creating chemistry between two industry leaders

Here’s to 241 years of combined service excellence

This year, as Albert Kemperle Inc. celebrates its 83rd anniversary, BASF also celebrates its 158th anniversary. We are proud of our decades of partnership with BASF and years of serving the auto paint and body industry together. Kemperle’s founders would be proud of this relationship and the growth their company has experienced because of it.

Today, as we look forward to many more decades of service to our customers, we find ourselves filled with gratitude. The creativity, hard work, and sense of responsibility of the people working for our two companies have made us what we are today. Thank you for your many years of loyalty.

BY JORDAN HENDLER

MESSAGE

Is it Just “Chicken

It takes a lot of discernment by repairers to know whether something is posing as an agent of chaos, or really is a warning to heed. Our media – just like the mainstream media – has a lot of stories shouting out for attention to issues presented by ADAS, tech shortages, repair procedures, education, and more. But, are they really emergencies? Would your team be able to know the difference?

Discernment is earned through wisdom (even if it’s borrowed wisdom!), knowledge and experience. After 25 years in this industry, I feel as though I still spend each day learning new things about collision repair and the subtle dynamics of our industry. Just like the game of golf, you can never wipe your hands and say, “I think I’ve got it all now!” We can never stop being a student.

With that said, I can stand firmly and say: Chicken Little ain’t lyin’. Our media isn’t even shouting what they know from our industry experts as loud as they should be. I’ve been hearing the phrase “tsunami of technology” for years, but the water is up to the eyeballs. Just short of flying through the air, today’s vehicles rival anything we saw on The Jetsons. And it does take rocket science-like equipment, education and documentation for procedures to fix them the right way.

The Right Way.

Just what does “the right way” look like today? There is a chasm I’ve seen for decades; growing ever larger between shops’ business models. One side is standing on fixing the car properly and to the procedures every time - regardless of the cost - and the other side is getting cars through the shop any way possible without upsetting the customer or the insurance company. It’s two different visions with two divergent paths, and it’s creating a divide in our industry we are unable to bridge.

The problem is becoming further magnified by the two being in conflict when it comes to insurance pay or customer pay issues.

The insurers are certainly using this conflict to their advantage, pitting shops against each other and even – as I’ve seen and you’ve seen – telling half-truths or flat out lies where they tell you

or your customers no one else charges “that.” It’s disgusting, and it should be a high crime. It’s certainly market manipulation at the very minimum, and tortious interference in many cases. How this has been allowed to transpire is heartbreaking.

When we don’t stand on our truths, we make some things harder for ourselves than they need to be.

What Can We Do?

Philosophy – with a mission and vision - governs in a repair facility. The lack of vision or a mission leaves each man or woman to govern themselves by their own discernment based on their own set of wisdom, knowledge and experience. With a lack of established vision, you could have as many opinions about your company’s vision as there are employees to invent one. That is, unless you plan, execute, and manage the operation with a vision that is plain, simple and understood by all.

Here’s an idea of a vision statement any repairer could use:

• To be a trusted and honest professional repair facility, repairing vehicles safely while providing extraordinary customer service.

Every decision about what’s best for the company, customer or vehicle could be tested against a statement like this. It takes the guesswork out of right and wrong for every member of the team. My dream for our industry is a lot like our mechanical friends: fix the car, by the book; get paid a good rate; pay employees well; and sleep at night!

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BMW of Catonsville 6700 Baltimore National Pike Baltimore, MD 21228

855-996-2906

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WMABA’S JOHN SHOEMAKER RECOGNIZED FOR HIS PASSION, DEDICATION AND EXPERTISE

Passionate. Dedicated. Going above and beyond. These are just a few of the characteristics many collision industry folks would use when referring to industry leader and WMABA Board member John Shoemaker (BASF).

It was no surprise that this industry leader was recognized by WMABA as Board Member of the Year during the association’s inaugural award ceremony held during the kickoff celebration of the Southeast Collision Conference (SCC) this past April. (For a full recap of all the winners, be sure to check out grecopublishing. com/hammer-and-dolly-june-2023/.)

WMABA used the opportunity to honor those who give their all to safe and proper repairs and if anyone meets that description, it’s Shoemaker!

His deep knowledge and devotion to helping others succeed have made him a household name in the industry. Whether it’s through his day-to-day work with clients through BASF, his writings or his informative presentations at SEMA, SCC or NORTHEAST®, Shoemaker is a teacher, a guide and a friend to the collision repair world.

“It really was a surprise,” reveals Shoemaker about the award. He has been serving on WMABA’s Board of Directors for the past three years. Just like his commitment to the industry and helping others, he devotes his time because he believes in paying it forward.

“I want to share what I know with people who need to know it,” he relays. “WMABA gives me another avenue in which to do so. It’s a great way to talk with people.”

Shoemaker’s passion for all things automotive started when he was 14 years old working at a body shop in Campbell, California, assisting a body man and painter.

Years later, while serving in the Air Force, he nurtured his skills further by performing vehicle maintenance. Honing this skill set launched him into the next branch of his career. Upon retirement from the Air Force, Shoemaker settled down in Virginia running the body shop at a dealership where he remained for 14 years. During that time, Shoemaker was recognized by Dupont as a top performer, and eventually launched his own consulting company, performing contract work for Dupont and other paint manufacturers. BASF was so impressed with Shoemaker’s work they offered him the opportunity to come on board to work exclusively for them. He’s been serving as BASF’s business development manager for the past eight years and counting.

Shoemaker works directly with BASF’s body shop customers helping them manage their numbers to maximize their profitability. He assists them in developing standard operating procedures and trains their employees in best practices. Estimating is a key

factor and he puts a lot of time and focus into training in that area. “We have a business solutions portfolio that focuses on the entire business. It’s not just the paint side; I get involved in all aspects of the business to help them become and stay profitable.

“When I was in the body shop, it was the same thing day in and day out,” he continues.

“Doing what I do now, it’s new every day. I get to help different people with different things; there’s variety in every single day. The ultimate thing for me is knowing that when I leave a business, I helped them be better and that’s pretty satisfying. I get the opportunity to help people do better and BASF gives me the tools to help them do that.”

A sought after speaker, Shoemaker’s recent damage appraisal course has been generating a lot of attention. “Insurers are pushing back on almost anything they can. I’m showing people ways that they can document their steps and get paid for those steps. More importantly, every process that has to be performed on that vehicle must be identified.”

The most satisfying part for Shoemaker is getting feedback from folks who have attended his courses or read his articles letting him know they applied his techniques which brought upon positive results. He’s even had people reach out asking him what his

BY ALANA QUARTUCCIO

Whether lending support as a renowned speaker at events like SCC, NORTHEAST® and SEMA, assisting at association events or providing sage industry advice, 2022 WMABA Board Member of the Year John Shoemaker has been a longtime staple to not only the WMABA community but also the industry as a whole.

next SEMA presentation might look like so they are sure to make their travel plans.

Shoemaker may not be hands-on in shop bays at this stage in his career but he still gets his hands on vehicles. Every Saturday, he and a friend build motors for a local speedway. And because he probably wouldn’t be where he is today if he didn’t love cars, Shoemaker also has a collection of his own, including a hot rod Corvette.

“John is always the first one to step up to the plate whenever we need anything,” explains WMABA Executive Director Jordan Hendler. “He volunteers at every single WMABA event! He brings so many great ideas to the table and carries with him relevant information that is helpful to our membership.”

“I have a strong passion for the industry,” Shoemaker submits humbly, “and I love being able to present that passion in a way that helps people grow their business.” H&D

Special Presentation

Storytelling, Resources for Filling Technician Shortages

Presented Jennifer Maher,CEO TechForce Foundation

from coast to coast have been feeling for years…but technicians are actually in short supply in all segments of the transportation industry, from automotive to aviation to diesel. Though all segments are hurting, most business owners are too busy to spend a significant amount of time seeking out technicians to fill the gaps.

“We need to stop complaining and start doing something… but we have started doing something; we’re doing a lot of things that you may just be unaware of,” stressed Jennifer Mayer, CEO of TechForce Foundation, a nationwide non-profit organization focused on championing future and working technicians through scholarships, school partnerships and industry engagement. “You’re not hitching your wagon to solutions. The transportation industry can only solve this crisis if we row together and create a movement.”

Many young people who are interested in becoming a technician simply have no clue how to go about learning the trade.

so they spin and waste time and money, acquiring debt as they try to figure it out. So, as an industry, we need to meet them and help connect the dots.”

That’s exactly what TechForce strives to do through a variety of free resources which seek to inspire, support and connect young and future technicians with the industry that desperately needs them. “We’re passionate about young people because they’re wired for success. But we need to show them a pathway into technical education in the skilled trades.”

TechForce’s marketing team focuses on storytelling to show that pathway to success by changing perceptions about the role of today’s technicians and promoting respect for techs. They accomplish this largely through the Techs Rock Awards, which recognize technicians currently working in the industry, while the Future Techs Rock Awards recognize students for their passion and commitment.

Local Student Experiences

“We need to focus on the aspiring technicians who are trying to find their way to you, not leave them following the breadcrumbs to try to find a career,” Mayer emphasized, explaining that TechForce works to introduce this career path to young people by getting them excited about the future of mobility and demonstrating the extent of promising careers available to them with the right skill set. “We tell young people they can be anything they want, but

The organization also provides career exploration resources and technical education support as well as a variety of scholarships and grants. Since 2007, TechForce Foundation has awarded $18 million in scholarships and grants, impacting over 40,000 students, with plans to award $2.3 million in need-based scholarships this year.

TechForce’s variety of free resources aim to inspire, support and connect young and future technicians with industry members.

apprenticeships, education and job opportunities further helps young people navigate the journey from career exploration to technical education to job placement. TechForce has put considerable effort into starting to attract young people at an earlier age. “When you’re running a business, it’s hard to visit local middle schools to get younger kids excited about this career path, but TechForce Foundation can do that now, while they’re trying to figure out what they want to do with their lives,” Mayer shared. “We tell them the story, and then someone needs to stick with them.”

Industry partners can volunteer to become TechForce ambassadors to connect with local students through various activities, while students’ participation in the TechForce Network provides them with all the resources they need to advance their careers.

Although its focus is on the students and young people interested in becoming technicians, TechForce also provides employer resources such as its annual Technician Supply and Demand Report which breaks down how many technicians each segment of the industry needs. For example, the 2022 report indicated a demand for over 35,000 collision technicians last year, yet it showed that less than 4,500 students completed postsecondary collision tech training in 2021.

A major solution to solving the shortage of technicians entering the industry revolves around diversification, according to Mayer,

Do something to alleviate your suffering.

BY CHASIDY RAE SISK

a whitepaper released by TechForce last year (available online at techforce.org/women-techs-solving-the-tech-shortage) that identifies what employers can do to recruit and retain women technicians.

“Women can do this job; they want to do this job. And we cannot solve the technician shortage if we don’t welcome more people with different backgrounds. This tends to be a very white, male-dominated field, and that’s got to change,” Mayer insisted, encouraging employers to recognize female employees through the Women Techs Rock initiative where women can tell their stories and inspire other young ladies who may be interested in pursuing a career as a transportation technician.

For more information about TechForce Foundation, visit techforce.org. H&D

Executive Director’s Thoughts

At the time of this writing, I’m reflecting on the four separate conversations I had with shops in just one day about tech shortages. The employee shortage is not unique to just our industry, but as our focus, our industry has been facing this long before the pandemic. Our average age was creeping up above the norm long before that. While we shouldn’t be surprised, every person it affects feels like it’s a sucker punch to the gut they weren’t prepared for. -Jordan

Hendler

FEATURE

IS COLLISION REPAIR RECESSIONRESISTANT?

PART 2

BY CHASIDY RAE SISK

Everyone who operates a business does so with the goal of making a profit, but when economic uncertainty abounds, small business owners may worry about their ability to remain operational. As mentioned in the May edition of Hammer & Dolly, the auto body industry may be a bit more recession-resistant than other businesses, providing shops with a chance to take advantage of different opportunities that others may not enjoy.

What exactly makes this industry so much more fortunate than most? To begin with, though many consumers drive less, Americans continue to rely heavily on their personal vehicles, and the combination of inflation and increasing interest rates have created a situation where buying a new (or even used) car is largely prohibitive. In fact, 2022 ended with new car prices averaging over $48,000 with an average interest rate of 6.5 percent resulting in a $700 monthly payment! Given the economic uncertainty pervading society at large, few people seem comfortable making such a large purchase right now.

“People worry about going into debt with such high car payments being financed for long periods of time,” explains Maylan Newton (Educational Seminars Institute). “Rising interest rates also cause people to hang onto their cars longer, investing in engine replacements and major repairs to avoid a new car payment. They’re more willing to invest in what they have to avoid the hassle of buying a new car; between surcharges and premiums, some dealerships are charging more than $30,000 above sticker price! The average consumer cannot afford that and would rather repair their current car instead of going into such massive debt for six years with high rates, especially with the way they’re rushing to complete vehicles now. I expect a lot of recalls in the coming years because they aren’t taking the time to build cars correctly. It’s going to be a good couple years for repair shops because of all these reasons.”

“With new car loans averaging 77 months and 14 percent of new car loans over $1,000 per month, this is the easiest time to take advantage of the opportunities that exist in the repair world,” agrees Rick White (180BIZ). “Consumers often resist investing in repairs, but why throw a $60,000 solution at a $4,000 problem? Service advisors can sell the repair by demonstrating the cost for a new car in payments and interest over a seven to eight year note. Help them understand that their vehicle is an investment and that we’re selling the ability to get more miles out of their car. The next 10-12 years will be one of the best times we’ve seen in the auto repair industry in a long time. People will keep their cars and invest in them because they understand that’s a better use of their money. Even a $3,000 repair costs less than six months’ worth of payments!”

Shops may need to spell this out for consumers, however. “A lot of consumers are not very intelligent about their cars,” Newton

observes. “Our job is to help them understand the value of fixing the vehicle as opposed to replacing it. I use statements like ‘protect your investment’ and encourage them to make sure their car ‘lasts longer than the car payments do.’ Emphasize that neglecting to care for their car means it won’t last the length of time that they finance the car for. We have to change our mindset to focus on the customer’s needs, and that means talking less about the technical side. Instead, we need to explain how we’re protecting their investment and making it last as long as possible.”

In the collision industry specifically, a variety of opportunities arise from this decrease in the demand for new vehicles.

“Customers are more apt to fix their car instead of buying new, whether that means filing insurance claims or bringing the car in themselves,” suggests Mike Anderson (Collision Advice). “Shops are likely to see more customer pay vehicles which are usually the most profitable jobs since they mean more labor, less parts and a higher gross profit, plus there’s the added benefit of working directly with the consumer instead of a third-party payer.”

He also points out that people tend to focus on collision repairs cyclically. “As people slow down and start preparing for summer vacations, it’s likely that they’ll invest in their cars at that point to make sure they’re running properly and that they’re looking their best.”

Amid all these factors, shops focused on maintaining – or even growing – their market share may want to consider whether they are offering all the services that will help propel their business forward in the future.

“It’s important for any entrepreneur to be nimble and able to pivot and change their strategy,” says Rachel James (Torque Financial Group). “Could you market detailing services to help make that old car feel like new again? Or maybe, a conventional collision shop might consider offering some a la carte maintenance and service items to add some line items to their blueprints while creating convenience for their customers. Adding a band of business you’ve never engaged with before, such as glass repair or calibrations, could add an additional stream of revenue and more security.”

Shops that want to convince collision customers to purchase those add-ons will have more success if they’re able to establish those maintenance items as an investment.

“It truly can be an investment to the consumer, so that’s how shops need to position it,” James insists. “As a consumer who doesn’t want to spend additional money on a monthly car payment, you’ll have to accept that there will be expenses associated with maintaining that vehicle. From a shop’s perspective, it all comes down to communication, and a qualified customer service

continued on pg. 20

NATIONAL FEATURE

continued from pg. 17

representative can effectively have that conversation to explain how maintenance prevents bigger repairs down the road and reduces the overall costs by sustaining the vehicle through some due diligence and a little TLC.”

Customer communication makes a huge difference for forwardthinking shops, especially as it relates to explaining technological advancements. “Shops should be holding car care classes to educate people and teach them how to be involved in protecting their investments,” Newton recommends. “It’s amazing how many cars we see without oil in them because people don’t even know how to check their own oil! Attend meetings of the local rotary clubs and chambers of commerce to explain how much technology exists in today’s vehicles.

the surface in regard to ADAS and calibrations which will continue to grow, and I suspect more shops will embrace it and bring it in-house. COVID jump-started the utilization of some technology, but we’re not quite where we need to be in terms of researching repair procedures or utilizing software…There may even be a place for 3D printing in our industry’s future! We just need to stay open-minded and willing to accept the opportunities when they come knocking.

“Too often, we kick new software solutions to the curb because they don’t offer 100 percent of what we need, but we all need to learn to crawl before we walk, before we run,” he encourages. “Instead of penalizing them for what they can’t do today, understand that we need traction to advance along even further and consider what that software might be capable of in the future.”

Despite these opportunities, many shop owners still express fears related to rising costs, but inflation is nothing new…it happens annually or even more often!

“Cars aren’t cars any longer,” he continued. “Multiple systems and modules are communicating with each other electronically via airwaves. Most people don’t even know their car is hackable. We need to educate consumers so they stop learning from Google and YouTube. They think it’s easy, and then we make it sound easy by advertising prices or quoting prices over the phone. We need to educate customers and talk about how it takes special knowledge and tools to even know WHAT to fix before it can be fixed.”

White believes that advancing technology is one of the reasons that people are keeping their vehicles longer, but “as technology continues to grow, the do-it-yourself market is going to get smaller and smaller because they can’t keep up with the technology. And although there are early electric vehicle (EV) adopters, a lot of people are resistant to EVs, plus there are still enough bugs in the infrastructure that I think internal combustion engines are going to be around for a while, even after they stop being made. So, while shops need to start investing in future technology to repair tomorrow’s cars, today’s vehicles are already complex and will be around for a long time, offering plenty of opportunities for us all.”

“No one has all the answers, but I definitely believe there are lots of opportunities for our industry,” Anderson says. “This whole EV revolution provides opportunities and will likely separate some shops in a way that aluminum never did. We haven’t even scratched

“We have increasing costs every year, whether there’s a recession or not,” Newton points out. “Shops need to stop being afraid to charge what’s correct. Reevaluate your hourly rate every year – or preferably every quarter – and increase it as needed. Quarterly increases allow you to keep up with inflation, plus it’s easier to raise that number a little at a time instead of a lot all at once. It’s important to do the math and calculate your true cost of doing business, but understand: your hourly rate isn’t as important as your effective labor rate, which is the amount you’re actually charging based on productivity. You need to understand your numbers in order to make money, and we also need to sell value, not repairs. Sell knowledge, not what our hands can do for us. We’re selling peace of mind and safety, not just parts and labor.”

Anderson concurs that shops should be looking at their labor rates more often. “Most people do it yearly, but I recommend evaluating your cost of doing business every quarter in order to build budgets and pro formas for the upcoming year. Surround yourself with experts like your 20 group peers and other knowledgeable people that can help you better understand what expenses you should be considering and what rates you should be charging. We need to be monitoring our expenses and our overhead, especially as we look at repairing EVs due to the investment we’ll need to make in training and equipment for those vehicles. It’s a good rule of thumb to have at least six months’ of expenses saved in cash reserves; that’s the sign of a healthy business.”

White shares a similar viewpoint. “We should be watching inflation all the time because it averages around three percent each year. It’s the silent killer of profit since people don’t always pay attention, but it’s about buying power. Something that cost $100 in 2019 now costs $117. Prices go up constantly, so shops should be adjusting their rates quarterly or even monthly. Realize that these increases don’t allow you to make more money; they’re simply giving you the same buying power. And when you’re thinking about that, you also need to be giving employees a cost of living increase

“The next 10-12 years will be one of the best times we’ve seen in the auto repair industry in a long time. People will keep their cars and invest in them because they understand that’s a better use of their money.”

-Rick White

because if you’re worried about inflation, so are they. As the shop owner, you need to be taking care of them. No matter how hard things get, it won’t last forever. Know that it may be tough, but you can thrive if you keep a positive attitude and work smarter.”

James offers some financial advice for all business owners: “Over the next 12 months, look at your budget and develop a plan. Many look at their checkbook as an indicator of success, but in reality, that’s not the whole picture. Evaluate your P&L for the past year to see what it costs to run your operation. Are there any discretionary expenses that can be eliminated to free up cash flow? If you’re unsure, now is the perfect time to get a better understanding of your monthly financials so you can remove any unnecessary costs and better position yourself for financial success.”

At the same time, shops must recognize the difference between necessary and unnecessary costs, and in a time of financial uncertainty, it’s easy to make the wrong decisions on which expenses should be cut…and which should be increased.

“Market when you’re busy to stay busy,” Anderson recommends. “We need to market now more than ever before, but don’t overextend yourself. You can’t overspend in your personal life and ask your business to support that. It’s not about what you make; it’s about what you spend.”

“Struggling shops may not make it through a recession, leaving only stronger shops to survive, and that gives those shops an opportunity to increase their market share,” White notes, citing the example of AirBnB’s decision to decrease marketing during COVID. In contract, Vrbo increased marketing 10 times, and by the end of the pandemic, AirBnB had lost 15 percent of the market, while Vrbo had picked up 61 percent. “Go big! When it’s really busy, the audience isn’t watching the stage, but during something like the pandemic, people are watching. And if 98 of 100 shops hide to ride out the recession, that leaves two shops trying to get the audience’s attention…and they’re going to get it! This is a great time to record videos to help people get to know and trust you. When no one else is marketing, now’s the time to build credibility. Increase your marketing, grow your market share, and you’re going to do really well.”

“The hardest part of financial planning is the emotional aspect,” James acknowledges. “It’s challenging to navigate because it’s so easy to fall into the fear of scarcity versus abundance, but more pressure equates to better results. Sure, issues occur, but you buff it out or realign it. There’s no perfect day in a collision shop, so you need to plan for the good times and the bad. Develop options for abundance and a contingency plan for when things get tight. There’s no crystal ball telling us if the next 12 months will be horrible or not, but we can rest assured that some point in the future will hold a difficulty for every business, whether that be economic, market or product driven. Being prepared is key.”

“Most people reading this article aren’t the cheapest shop in town, yet they’re busy,” Newton emphasizes. “We worry too much

about price due to fear, but we need to stop advertising and quoting prices and start charging a fair amount based on the cost of doing business. Fear causes us to stop marketing when times get tight, but we should continue advertising, just redirecting our focus on service, quality and value. If we convince ourselves that the sky is falling, our employees will believe and perpetuate that; if we tell them it’s slow every day, they’ll slow down and create productivity problems. We need to be optimistic because there’s plenty of opportunity. Charge the correct amount, do the best job you can, constantly build value, and you’ll have a good year!” H&D Without an

Executive Director’s Thoughts

unflinching and unwavering pride in your professionalism, charging not just for what you do but for what it costs to do it and make a profit, and becoming educated in consumer rights and business practices, you are left to make onthe-spot decisions based on the situation right in front of you. Planning and creating a vision for what you want your business to be is how you create the rock-solid culture the entire team can get behind to execute. -Jordan Hendler

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COVER STORY

ARE YOU AGREEING TO SHARE CUSTOMERS’ DATA WITH CHINA?

Where

BY CHASIDY RAE SISK

Today’s vehicles are complex supercomputers on wheels that include continually advancing technology that improve drivers’ safety and convenience, but those same systems that enhance the driving experience also collect a plethora of data about the vehicle and its owner.

Social security numbers, driver’s license numbers, vehicle identification numbers…personally identifiable information (PII) is “any information that permits the identity of an individual to be directly or indirectly inferred,” per the US Department of Homeland Security’s website, and in today’s digital economy, PII is so valuable that it has often been dubbed “the new gold.”

Over the past several years, the collision repair industry has become increasingly concerned with protecting consumers’ personal information as more and more states explore and pass data privacy laws. In many instances, shops have been shocked to find that data has been leaked (learn about some of these scenarios at grecopublishing.com/hd0722coverstory), but during the most recent Society of Collision Repair Specialists (SCRS) Open Board Meeting, Executive Director Aaron Schulenburg brought a new concern to light that had been shared with the association by a member: an end user license agreement (EULA) in some diagnostic tools allows a wide selection of customer data to be collected, shared and governed by the People’s Republic of China!

Schulenburg expressed concerns with the possibility that business owners may be completely unaware of the stipulations in the EULA. He suggested a likely scenario where a shop owner buys a diagnostic tool and hands it to the technician to set it up, noting that the EULA only populates during the setup process. “The shop owner may be completely unaware of what the agreement is. The technician may not even read it, likely won’t; they’ll probably just hit ‘I agree’ or ‘disregard’ so it goes away and they can move on with the process.”

But the EULA in question contained some “striking” verbiage that Schulenburg feels the industry should be aware of. The EULA continued on pg. 28

does your customers’ data go?

continued from pg. 27

indicates, “The software is subject to China laws, including those governing the privacy and security of your information. If you register and use the software, you are transferring your information to Autel in China. By providing your information to Autel through the software, you consent to the transfer of your personal information to China, and our handling of your information in accordance with applicable China requirements.”

It also requires users to “provide notice to and acquire a consent from each customer (or prospective customer) to the collection of vehicle data obtained from a customer’s vehicle using the device that this software is housed on and the sharing with and use of such data by Autel and third parties in accordance with this agreement.”

Specifically, acceptance of the EULA provides consent for collecting, processing, storing and transferring data by Autel, including vehicle registration (such as name and address), technical data and related information and “vehicle data obtained from a customer’s vehicle, including but not limited to make, model, year of manufacture, equipment features, vehicle identification data, repair, maintenance and wear related data generated during use/repair and odometer reading.”

“[The EULA] talks a lot about data and where the data is going, that data will be exchanged in China and governed by the laws of China, and that you, as the person using this tool, will provide notice to and acquire consent from each customer or prospective customer…and that the software is subject to China’s laws, including those governing the privacy and security of your information. If you register and use the software, you’re transferring your information to Autel in China…I think that’s something we should be aware of,” Schulenburg stressed, pointing out that the EULA does not appear to be available online or anywhere else after it has been accepted during setup.

Admitting that he’s unaware whether the EULA in question is typically found on scan tools and suggesting the industry further explore that question, he asked, “Is this okay? Is this something that the industry is willing to accept? Is anybody going through the process of notifying consumers of this if that’s what you’re agreeing to? If your technician agreed to it without reading it, and you were never made aware, how do you responsibly protect customers’ information if you don’t even know this is an obligation you’ve agreed to?”

Furthermore, shops could be beholden to privacy agreements with other entities with whom they do business, Schulenburg

suggested. For example, if a carrier insures government employees or active members of the military, what expectations might they have about maintaining those individuals’ privacy?

“We’ve spent a lot of time discussing data,” he acknowledged. “We’ve talked about how data impacts our small businesses – where it ends up going, what we can do to control it reasonably…and many times when we have that conversation around data, we’re talking about the software solutions that we use and the concern about when we’re writing a repair plan or documenting damage. How do we make sure that we do a responsible job for our customers of maintaining that information while we also have a responsibility to share that electronic information with other people during the repair process? What are our roles and responsibilities, especially as more state privacy laws populate?

“That’s a challenge that the industry has found itself in, and it will continue to be an issue that we need to talk about,” he added, predicting that the Collision Industry Conference’s (CIC) Data Privacy Committee will likely tackle this topic at future meetings.

“Collision repairers need to understand their EULAs with all of their partners and how the data could potentially be shared intentionally or accidentally with the companies they do business with,” CIC Data Privacy Committee Co-Chair Dan Risley (CCC Intelligent Solutions) told Hammer & Dolly last year, long before this issue came into the spotlight. “This sets the stage for a discussion on the data chain of custody.”

The day after Schulenburg’s jaw-dropping depiction of the developing “industry issue,” CIC Chair Frank Terlep issued a warning to the CIC body:

“If you or someone within your organization have purchased the specific technologies to perform diagnostic services, I want you to understand that you may have agreed to a EULA that allows the tool company and its affiliates, partners and agents to read, collect, transfer, process and store registration data, technical data, vehicle data…basically anything they want. But it gets better…You’re also agreeing that the data may be processed or transferred to China, where you have fewer rights related to data, and my guess is most of the collision repairers who have agreed to this don’t realize it.”

By agreeing to the EULA, “either you or someone within your business has agreed that you’re supposed to tell the consumer that you’re collecting data on their vehicle and sharing that vehicle data with another country,” Terlep continued. “You also agree that the software and the agreement you’ve accepted is subject to the laws of

“Collision repairers need to understand their EULAs with all of their partners and how the data could potentially be shared intentionally or accidentally with the companies they do business with.” -Dan Risley

China, plus you agree to transfer your information to China, consent to the transcript of your personal information and the handling of this information, not according to US laws but in accordance with Chinese requirements. And last but not least, you agree that any dispute resolution, interpretation and modification is governed, not by the wonderful (if sometimes flawed) laws of the United States but by the laws of the People’s Republic of China…I want everybody to be aware that this is going on in virtually every collision and

industry.”

we

Terlep concluded by confirming that CIC’s Data Privacy Committee will be further investigating this information and reporting on their findings during an upcoming meeting. Stay tuned to Hammer & Dolly for more details as they become available.

H&D

Executive Director’s Thoughts

mechanical shop in our country today because

need to know what we’re agreeing to as an

Adding language to your customer work authorization, noting their personal or vehicle data may be subject to sharing as part of the collision process (in legal terminology of course), is at minimum allowing them the opportunity to ask questions about where or how their data may be shared. It could be a piece of equipment’s software, a service provider, or any other possibility of vendor access. The more they know up front is infinitely better than them being surprised by something after they’ve left your shop.

-Jordan Hendler

OFFICERS

Position Your Business as a Leader!

Just like equipment and training, WMABA membership is not only a commitment to excellence, but also a valuable investment.

VICE PRESIDENT: Rodney Bolton rbolton@aacps.org 443-386-0066

TREASURER: Kris Burton kris@Rosslynautobody.com 703-820-1800

WMABA is recognized both regionally and nationally as the key forum for the exchange of ideas concerning the D.C., MD, VA and WV collision repair industry. It is the venue to discuss, learn about and impact evolving standards and policies in the technical, administrative and legislative fronts of our industry. Shops and industry supporters can best develop themselves and their employees by actively engaging in the association and its activities.

Automotive collision repair facilities in Maryland, Virginia, West Virginia and Washington, D.C. who are willing to adopt WMABA’s Standards of Membership and offer a guarantee to their consumers are encouraged to engage their business as an active member of the association. For over 40 years, the WMABA membership of professional collision repair businesses and affiliates have committed to operating at a higher standard on behalf of their industry and their consumers. Over the years, WMABA has proudly represented the collision repair industry at hearings on Capitol Hill, in Annapolis, MD, and Richmond, VA as well as almost every national collision repair event. While WMABA has a rich history of dedicated men and women serving the local collision repair community, WMABA also boasts numerous past and current accomplished Board members who represent our membership at the national level.

WMABA offers current and dynamic discussion forums on topics facing collision repairers, technical information and educational seminars, opportunities to network and discuss pressing topics with leaders of the collision repair industry, an arbitration program that works with consumers to help resolve issues they might have, apprenticeship programs, legislative representation and the ability to receive and contribute to one of the nation’s leading collision repair magazines, Hammer &

Dolly

EXECUTIVE DIRECTOR: Jordan Hendler jordanhendler@wmaba.com 804-789-9649

ADVICE INDUSTRY ASK MIKE:

What Are the Biggest ADAS Mistakes

Shops Still Make?

This month, we “ASK MIKE” for his thoughts on the most common ADAS mistakes still made by shops. We at Hammer & Dolly hope you find the 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 future issue.

Hammer & Dolly: ADAS procedures didn’t just appear yesterday, and we’ve been talking about them for years now. What are some of the biggest ADAS mistakes you’re still seeing shops make in 2023?

Mike Anderson: The first thing I still see is that people continue to believe that calibrations don’t need to be done if there are no DTCs [diagnostic trouble codes]. That’s inaccurate. The second thing would be that a lot of people don’t understand the importance of vehicle prep, which is making sure that the gas tank is full, the tire pressure is correct or the trunk is empty except for any of the standard equipment like the jack or the spare tire. Vehicle prep is important whether the calibration is sublet or done in-house. The third thing is that a lot of people don’t understand the importance of achieving the set conditions on the test drive. For example, if you read in the OEM repair procedures that the blind spot monitor activates at 31 miles per hour or higher, then

you must test drive the vehicle at 31 miles per hour or higher. If there are other features that come on at 20 miles per hour or less – like if you’re backing up in reverse – then the set condition is driving the vehicle at 20 miles per hour or less. A test drive may be required on a road with specific markings, such as signs or lines. It may be required that the test drive be done in a particular direction, such as in reverse. It may be required to be done in a pattern, such as in a circle or a figure eight. Maybe it’s required to be done at night to check the automatic lighting. Those are all things that should be on the list to consider.

H&D: With ADAS, there’s always the big question of whether a shop sublets that work or keeps it in-house. Are you seeing one direction getting more traction than the other?

MA: Right now, it appears to me that most people are subletting their calibrations out and not performing them in-house because they don’t have the space or the equipment. People need to understand that even if they sublet it out, they’re still liable. The contract is between you and the customer when they sign the authorization form. People also need to understand the difference between OEM scan tools and aftermarket ones. You have OEM targets, and you have aftermarket targets. An aftermarket solution may not be approved by the OEM.

H&D: For those shops that are considering doing this in-house – and considering the common errors you just told me about – let’s discuss shop culture. Do you see any specific cultural needs that a shop should address if they

Correct calibrations are necessary.

choose to perform ADAS procedures within their own four walls?

MA: I encourage my clients to purchase their own scan tools and do it in-house, because the profit margin is very high. A lot of people don’t have the space right now or the right conditions in their shop regarding lighting, a level floor and things like that. I believe that people should consider adding on to their buildings or building a space for calibrations. I know one non-DRP shop that shaved two days off its cycle time by bringing these things in-house instead of having to sublet to a dealership. I probably have 100 clients who are doing their own calibrations – and doing them very successfully.

There is training out there. At one time, Collision Advice offered hands-on calibration training for Nissan/Infiniti, and a lot of people went through that. Obviously, I-CAR has a class on that. Honda and Acura also do training. If you’re a certified Toyota/Lexus shop, you

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). H&D

have training offered for that. There’s a lot of training out there for technicians to learn how to do calibrations.

WITH MIKE ANDERSON