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New England Automotive Report
February 2024 3
4 February 2024
New England Automotive Report
February 2024 • Volume 22, No. 2
DEPARTMENTS
CONTENTS COVER STORY
PRESIDENT'S MESSAGE 6 | Finding Fresh Talent by Kevin Gallerani EXECUTIVE DIRECTOR’S MESSAGE 8 | Realizations by Evangelos “Lucky” Papageorg LOCAL FEATURE 10 | Eight Years Wasted: Rick Starbard Reflects on His Time with the ADALB by Chasidy Rae Sisk VENDOR AFFINITY PROGRAM SPOTLIGHT 16 | Crown Collision Solutions by Alana Quartuccio
26 | Changes, Challenges and Conquests: New England Automotive Report’s Survey Results by Chasidy Rae Sisk
LEGAL PERSPECTIVE
WHERE ARE THEY NOW? 22 | Former MABA Head Bob Johnson Misses the People, Not the Insurance Woes by Alana Quartuccio
ALSO THIS ISSUE 7 | AASP/MA MEMBER APPLICATION 17 | AASP/MA VENDOR AFFINITY PROGRAM SPONSORS
36 | The Not-So-Fine Print on Referral and Program Repair Contracts, Part 2 by Sean Preston, Coverall Law
New England Automotive Report
February 2024 5
PRESIDENT’S MESSAGE
Finding Fresh Talent KEVIN GALLERANI
There’s a lot of gray hair in shops these days. Not exactly surprising since the average age of auto body technicians has been creeping up for years. That’s partially because Baby Boomers aren’t retiring as soon as expected, but that’s not the only cause. A lot of shops don’t have any employees under 40! What’s going to happen when those older guys DO decide to retire? We’re all going to need to know where to find new employees to replace them. But it’s not something we should wait to think about because all those guys we’re going to lose are our experienced technicians and estimators – and let’s face it, there are a whole bunch of collision repair professionals near or even past the normal age of retirement! So, we need to find that fresh talent NOW to give them time to learn with our older crew before we lose all that knowledge and expertise. I know we’ve been talking about the technician shortage for a long time, but I think we sometimes focus on the stress of it all and forget that we actually have some opportunities if we just take advantage of them. First off, college is ridiculously expensive these days, and a lot of kids in the up-and-coming generation don’t want to sign on for that kind of debt; many of these high school students have watched their parents struggle to repay college loans, so their interest is swinging back toward the trades where they
STAFF
AASP/MA EXECUTIVE COMMITTEE
PUBLISHER
President Kevin Gallerani
Thomas Greco | thomas@grecopublishing.com
AASP/MA STATEWIDE DIRECTORS
EDITORIAL/CREATIVE COORDINATOR
Legislative Director At-Large Ray Belsito
Alana Quartuccio | alana@grecopublishing.com
OFFICE MANAGER
Donna Greco | donna@grecopublishing.com
PRODUCTION COORDINATOR Joe Greco | joe@grecopublishing.com
MANAGING EDITOR
Chasidy Rae Sisk | chasidy@grecopublishing.com
PUBLISHED BY: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963 www.grecopublishing.com @grecopublishing
AASP/MA DIRECTORS ZONE 1 Mike Penacho John Studer Dan Wenzel
continued on pg. 12
Vice President Matthew Ciaschini
VICE PRESIDENT/SALES DIRECTOR Alicia Figurelli | alicia@grecopublishing.com
can make a good living without accruing all that debt. But they are also a different generation, so they think and operate differently than we do. We have to try to understand them if we’re going to hire and retain them. Shops that invest in advanced technology – ADAS calibrations, EVs, etc. – are going to have an advantage when it comes to attracting younger technicians. They grew up with cell phones and tablets in their hands; they’re into technology and can probably dance circles around some of the older guys in the field when it comes to learning a new system. That also means they’re interested in training and learning new things, and while that can be a great attribute, it can also present challenges because they are a generation that is accustomed to instant gratification. They want to move up the ladder, and they want to do it fast. As shop owners, managers and mentors, we have to find the balance between helping them advance their skills and convincing them to slow down, learn, make and correct mistakes so they can master those skills. Wondering where to find these young industry professionals in the first place? You’ve got to get involved by attending schools’ advisory committee meetings and getting to
Treasurer Dana Snowdale
Secretary Don Dowling
Collision Director At-Large Dan Wenzel ZONE 2 Ray Belsito Brenda Lacaire
Affiliate Director Al Correia Brent Dabrosca C.J. Ellis Jimmy Kelsey Russ Oagles Doug Begin
ZONE 3 Gary Cloutier Andrew Potter Brian Stone Affiliate Directors Mike Nawrocki McColl Rhodes
ZONE 4 Dean Luther Jeff White Affiliate Directors J.R. Force Simon Frietas Jayce Mitchell Gregg Tanguay Scott Varney
AASP/MA ADMINISTRATIVE OFFICE New England Automotive Report is published monthly by TGP, Inc., 244 Chestnut Street, Suite 202 Nutley, NJ 07110. Distributed free to qualified recipients; $48 to all others. Additional copies of New England Automotive Report are available at $5 per copy. Reproduction of any portions of this publication is specifically prohibited without written permission of the publisher. The opinions and ideas appearing in this magazine are not necessarily representations of TGP Inc. or of AASP/MA. Copyright © 2024 by Thomas Greco Publishing, Inc. Images courtesy of www.istockphoto.com
6 February 2024
AASP/MA Executive Director Evangelos “Lucky” Papageorg
New England Automotive Report
AASP/MA Administrative Assistant Alana Quartuccio
WWW.AASPMA.ORG
P. O. Box 850210 Braintree, MA 02185 617-574-0741
Membership Application 2024-2025
AASP-MA P.O. BOX 850210 Braintree, MA 02185 Phone: 617-574-0741 Fax: 973-235-1963 Email: admin@aaspma.org
Please complete this form and return to our office via mail, email or fax with your dues payment. Thank You! BUSINESS INFORMATION Massachusetts Shop Registration # __________________
Total number of Staff (Techs, office, Mgrs)________
Company’s Official Name: ________________________________________________________________________________________________ Business Physical Address: _______________________________________________________________________________________________ Business Mailing Address (If Different): ________________________________________________________________________________ Telephone Number: (______)-________-___________ Fax: (______)-________-___________ DUES STRUCTURE. Collision Shop Annual Dues: $650 / 12 Months* PRIMARY BUSINESS CONTACT Name: _______________________________________________________________________________________________________________ Email: _______________________________________________________________________________________________________________ As a member in good standing, your shop WILL BE listed on our website. Click here � if you do not want your shop listed on our website map for potential customers to find you. If you have any questions about this benefit, call (617) 574-0741, ext. 1.
Yes � Please send me information regarding the following MONEY SAVING BENEFITS: � Dental plan � Healthcare plan � Credit card processing � FMLA savings program � Grant writing/training � Google presence optimization � All benefits PLEASE ENCLOSE PAYMENT WITH YOUR MEMBERSHIP APPLICATION Check# : _______________ (IF collision shop please note your RS# on the memo line of the check) CC #: ______________________________________________________________________
OR
EXP: ________/___________ CID: _________________
Billing Address: ______________________________________________________________________________________________________________ Name On Card: _____________________________________________ Signature: ____________________________________________________ Check here � to opt out of auto renewal using this credit card information for future renewal Note: A 4 percent convenience fee will be charged for membership renewal via credit card transaction
I hereby make this application for membership with the Alliance of Automotive Service Providers of MA (AASP/MA) for membership dues 2024-2025 as provided for in this contract. *Membership Dues are for a twelve-month period commencing on your anniversary month of membership.
REV 12/23 REV 12/23
RECOMMENDED BY:__________________ FROM BUSINESS NAME: ___________________ New England Automotive Report
February 2024 7
EXECUTIVE DIRECTOR’S MESSAGE
Realizations EVANGELOS “LUCKY” PAPAGEORG
Over the many years of working in the collision repair industry, I have worn different hats and have tried many different ways of getting useful information into the hands of individuals. When I was managing shops, my goal was to educate my customers in all aspects of the collision repair and insurance claims process. When I transitioned to becoming the executive director of the collision repair association known as the Massachusetts Auto Body Association (MABA), I focused my attention on educating vehicle owners and the collision repair shops that were members of the association. During these years, many aspects of the collision repair process have changed, not only from a technical standpoint, but also in the many ways the insurance industry has manipulated the system to their advantage; however, as always, having the ability to present the facts to the vehicle owner – your customer – in an honest, straightforward manner outweighs any propaganda that insurers may disseminate. It does take time and extra effort on the part of your collision shop and your personnel, but the effort is worthwhile as many are finding out and can attest to. Spending the necessary time helping a vehicle owner understand the process and breaking it down into simple examples and understandable language makes ALL your efforts worthwhile. I still recall the satisfaction I felt when a vehicle owner would come back into the shop and say, “They said and did exactly what you said they would.” When I heard those words, I knew I had created an ally with whom I could work with to our mutual satisfaction in the repair of their vehicle. I was not fighting the fight by myself. Fast forward nearly 35 years, and I am hearing those same words in increasing frequency from shop owners. Statements such as, “I can’t believe I waited this long to make this change” or “you were right, I may lose a job here or there, but for the most part, the vehicle owners understand and are willing to pay a fair and reasonable rate to fix their vehicles correctly.” These statements are from shops referring to the fact that they are now charging a copay to cover the shortfall offered by insurers as a settlement figure on the claims at their shops. In the short term, it is a remedy that will allow those collision repairers to thrive and give them the ability to hire, train and keep qualified, skilled technicians. In the long term, it will also allow these shops to attract and draw in younger individuals, train and mentor them into becoming vital participants in their shops and an integral part of their future success. This does not come without some pain and/or potential setbacks. For those shops that continue to persevere, there is a bright future ahead. When I say persevere, I mean being committed to your success and not taking “NO” for an answer from insurers. At the same time, it means saying “NO” to jobs which are not going to be profitable to your facility. These are the jobs where the rate of reimbursement, the P&M allowances, the restriction or refusal to compensate for recommended
8 February 2024
New England Automotive Report
or required procedures by an insurer make you less than a reasonable return on your investment and can add to your potential liability as a repairer. Since the inception of the “Breaking Free in ’23” campaign, of which the foundation was laid in 2022, there has been a significant uptick in the number of shops that have come to the realization that the insurance rate of reimbursement is exactly that! It is only a rate of reimbursement – an inadequate one! It is NOT a shop labor rate; it is what the insurer is willing to reimburse or “subsidize” their insured for the repair costs of their damaged vehicle. Those insureds need to be made to understand this point very clearly! THEIR insurance company has chosen a rate of reimbursement which does not allow for the proper reimbursement of the true cost of repair on TODAY’S vehicles at TODAY’S costs. It is NOT up to the collision repairer to make up for the “SHORT” sighted thinking of insurers. In some instances, those collision repair shops that are charging their posted rates to the vehicle owners are also electing not to do work for certain insurers. Even though the shop is collecting their posted door rate, the additional administrative work, needless delays and refusal to adhere to regulations make these insurers less desirable to interact with. Sadly, it is the insured who ultimately is paying the price. They are bearing the additional expenses either through out-of-pocket repair costs or longer rental periods exceeding their coverage due to insurer delays. As collision repairers, we MUST NOT let this sway us from doing the right thing for our customers, businesses, employees and families. Once again, it does take perseverance and knowing what you are worth. I recently received an email from a shop that is a prime example of the success which can be achieved by not accepting “NO” and in return not being afraid to say “NO.” This shop has a posted labor rate approaching $70 per hour. (This is NOT an attempt to set a specific rate. It is simply stating a fact.) All the shops’ non-insurance covered customers pay that rate. Recently, an insurer wrote damage on a vehicle and offered to reimburse the repairs at a rate of $45/ hr. The vehicle was a commercial vehicle and oversized. The shop informed the insurer and the vehicle owner of his posted rate and refused to work for anything less. The insurer said “NO” and offered $50/hr. It was then the shop's turn to say “NO.” Again, referring to his posted labor rate, he indicated that either the insurer would have to pay that rate in full, or the owner would have to pay the difference, or the vehicle could be removed after associated expenses were paid and be repaired elsewhere. The power of “NO” on the part of the shop prevailed. He took the time to explain to the vehicle owner why his labor rate was needed, and he stuck to his guns. Yes, he was successful. Rather than “accept” the less-than-adequate continued on pg. 14
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Lia Honda of Northampton 293 King Street Northampton, MA 01060 Toll Free: 800-369-7889 Direct: 1-413-587-2900 FAX: 1-413-585-0502 www.liahondanorthampton.com
Honda of Enfield 20 Palomba Drive Enfield, CT 06082 Toll Free: 800-222-6632 FAX: 860-253-5419 www.liahondaofenfield.com
Honda North 382 Newbury Street Danvers, MA 01923 Toll Free: 800-882-9797 FAX: 978-774-9483 e-mail: eadams@iclautos.com www.hondanorth.com
Schaller Honda 1 Veterans Drive New Britain, CT 06051 Toll Free: 800-382-4525 Direct: 860-826-2080 FAX: 860-826-2083 e-mail: jkiniry@schallerauto.com www.schallerauto.com
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New England Automotive Report
February 2024 9
[LOCAL] FEATURE
Eight Years Wasted: Rick Starbard Reflects on His Time with the ADALB When AASP/MA Past President Rick Starbard (Rick’s Auto Collision; Revere) was appointed to the Auto Damage Appraiser Licensing Board (ADALB) in June 2015 – alongside former Board member Lyle Pare (Plymouth Rock Assurance Corporation and current Board member Bill Johnson (Pleasant Street Auto; South Hadley/Belchertown) – many Commonwealth repairers viewed the big changes as signifying a new era for the ADALB. Rick Starbard But that era came to an abrupt end last fall when Starbard was unceremoniously replaced by his predecessor, Carl Garcia (Carl’s Collision Center; Fall River). In fact, no mention was made of the new appointments when the Board gathered on October 5, 2023; Starbard’s seat was merely filled by Garcia while Vicky Wei Ye (Bos Insurance Agency) sat where Samantha Tracy (Arbella Insurance) could previously be found. Upon his appointment to the ADALB, Starbard shared his hopes and goals for his role as a Board member with New England Automotive Report (available at grecopublishing.com/ new-england-automotive-report-july-2015). After eight years of service, one has to wonder: Did he accomplish what he set out to do? What obstacles did he face when tackling his objectives? And why did Starbard vacate his seat on the Board? He sat down with us to answer these questions and more.
didn’t take long after I began serving on the Board to see how things actually got done. It was very disillusioning. We stopped a few bad things from happening to our industry, but we didn’t seem to make any progress in effecting positive change. It feels like we were so busy playing defense that we were never able to get anything done on offense.
New England Automotive Report: First off, thank you for serving on the ADALB for eight years! What were your goals/hopes going into this role?
NEAR: What were your greatest accomplishments during your time on the ADALB?
Rick Starbard: I really thought we were going to be able to make a change and get things done differently than they had been done in the past as then-Governor Charlie Baker had appointed two shop guys who had no contracts with insurance companies. Since the Board’s inception, that had never happened before; it was the first time. When people have contracts, I think that’s held over their heads when they vote because they depend on getting business through those contracts, so they tend to vote in that insurer’s best interests, not in the best interest of our industry and other shops. It 10 February 2024
New England Automotive Report
NEAR: When you were appointed to the ADALB in 2015, it was lauded as a “new era” for the Board. Do you think things changed significantly during your tenure? If yes, in what ways? If no, why not? RS: No, we didn’t change anything. Anybody who watched the proposed changes to the regulations play out could see it clearly – we weren’t getting anything changed significantly. Discussions about that thing dragged out for a year with a lot of compromise on both sides, but by the time it was finally sent up the chain for review, the Insurance Commissioner delayed acting on it, so by the time it was sent back down to us, the two insurance Board members who helped us put that initial draft together had been replaced. So, we had to revisit it with the two new people who hadn’t been part of the first discussion, and during that process, everything that benefited consumers or repairers was removed, while everything benefitting the insurers remained. And the ADALB’s regulations still haven’t been updated. Governor Baker called for those to be modernized in 2015, and while the other professional boards, which are housed under the Division of Occupational Licensure (DOL), updated their regulations since then, the ADALB – which should also be housed under the DOL but currently exists under the Division of Insurance (DOI), despite the obvious conflict of interest – has not.
RS: Right out of the gate, we were immediately successful in rescinding the photo estimate advisory ruling that the previous Board had issued, which stated that photographs constituted a personal inspection. Successfully rescinding that was probably the biggest win that we had. I don’t think we really achieved anything significant on shops’ behalf after that, although we certainly tried. NEAR: What were your biggest disappointments during your time on the ADALB?
by Chasidy Rae Sisk
RS: After all the time and effort we put into reviewing the regulation, the refusal to change it was particularly disappointing. Going all the way back to our first attempt, so much time and effort went into educating Pare, Joe Coyne (Home and Auto Appraisals; Dorchester) and Chairman Cox – who eventually started understanding the shops’ concerns which is probably why he was replaced! – before reaching compromises and drafting that proposal. We did a great job in coming to a consensus, so having it basically thrown away was disheartening. Then, it was brought back to be reviewed by a Board that had nothing to do with crafting the original changes. They voted out any updates that positively benefited consumers or repairers. It seemed like they were basically throwing it in our face that everything we had done before was a waste of our time. That was probably my biggest disappointment. NEAR: What is the wildest or funniest complaint you heard during your time on the ADALB (that you’re able to share)? RS: I don’t know if any of them were really funny. I think the vast majority had merit, but it often came down to whether they were properly written. Quite a few complaints submitted by consumers were dismissed because they weren’t written properly or had been filed in the wrong place. Generally, I felt the complaints we received were valid, and I don’t think there’s anything funny about the violations that were brought to our attention…though I did get some laughs when I suggested the DOI is a tax-funded country club for insurance companies and said I wouldn’t be surprised to learn they have a putting green and swimming pool on the roof (and since I’ve never been up there, I can’t say with certainty whether they do or not)! NEAR: How did your position as an independent shop owner allow you to best serve the interest of auto body shops across the Commonwealth (or at least try to)? RS: I didn’t have any contracts to worry about. I live with the same frustrations as the shops that file complaints every day. We deal with the same things, so I applaud those who take time to file complaints, even when they know it’s falling on deaf ears, especially the guy who wrote over 100 complaints which were all swept under the rug. NEAR: Do you feel that members of the ADALB, including its leadership, listen to complaints from an unbiased position, or do they have agendas that inhibit their ability to fulfill the Board’s true purpose?
RS: ABSOLUTELY NOT! I don’t think a vote is ever taken at the ADALB that is unbiased on the insurers’ side. I’m fairly confident that we’ve had members – possibly all members on the insurance side – who felt their jobs were on the line based on their votes. It’s like being a sports agent; you’re beholden to your client, not the team. Meanwhile, insurance agents don’t engage in actual appraisals or know anything about advancing technology. Back when Joe and Lyle sat on the Board, I believe they both tried to be fair, but they still had to toe the line somewhat for fear of angering their employer or losing contracts. Since Bill and I were both self-employed and did not participate in any insurer contracts, we never had to worry about getting fired for doing the right thing. NEAR: Did you ever struggle to maintain your composure during some of the more contentious discussions? Can you share a story about one of the most frustrating topics broached by the ADALB? RS: Only during every meeting! I know my face went tomato red at some point each time the Board met. I tried to maintain some degree of professionalism, but sometimes, I just couldn’t help myself. One of the most memorable situations arose when we were reviewing a large stack of complaints from the same shop. One after another, the complaints alleged that an appraiser refused to pay for seatbelt safety checks which are required by almost every vehicle manufacturer following a collision. The safety checks are typically pretty inexpensive, like $40 each, and certain Board members were laughing that a shop owner was “wasting our time” over such a small amount of money. Well, I asked that room filled mostly with insurance representatives how many of them wouldn’t want a shop to perform a seatbelt safety check if it was their daughter’s car being repaired after an accident. Not a single hand went up, yet not one insurance company wants to pay for it. I thought that was pretty telling, and their attitude on the matter stuck with me. NEAR: What actions could/should be taken to make the ADALB more effective? RS: Insurance appraisers need to actually believe the ADALB might take their license away for violating the regulations! I’ve had appraisers dare me to report them to the Board because they know nothing will happen. There needs to be a threat of losing their license or financial penalties or something. As it stands now, they know they can do whatever they want, and nothing will happen. continued on pg. 12 New England Automotive Report
February 2024 11
[LOCAL] FEATURE continued from pg. 11 The only time the Board actually revokes a license is when something happens related to a shop’s appraiser. That suddenly becomes the most important thing on the planet. Filed complaints can sit for two years, but if there’s an issue with a shop, we get email updates on a Sunday morning, and it’s immediately added to the next agenda. That guy could be sitting in jail where his license cannot even be used, but we still need to revoke it as expeditiously as humanly possible. NEAR: How did you learn that you were being replaced at the ADALB, and how did you feel about this decision? RS: A friend called and asked if I had heard about the changes on the Board. I said ‘no,’ and he told me the word on the street was that I’d been replaced by Carl Garcia. Since we have a new governor, I wasn’t too surprised since it’s the Board’s M.O. [modus operandi] anyway. On my way to my first ADALB meeting, I remember calling TJ McClements who was also on his way because he didn’t know he’d been replaced. There was an insurance representative who arrived at a meeting and found his replacement in his seat! That’s just how the Board operates, and I suspect it’s how the DOI operates too. Since hearing through the rumor mill that I’d been replaced, I’ve received letters from the governor and ADALB
Chairman Donovan, thanking me for my service, but I honestly wasn’t even upset about being replaced since it was all such a waste of time. NEAR: Do you have any concerns about what your replacement will mean for Commonwealth shops and the auto insurance landscape in Massachusetts? RS: Honestly, I don’t. As long as the ADALB stays under the DOI, there will be zero positive changes. The DOI is never going to allow that Board to protect consumers or repairers; the ADALB exists to shield the insurance industry from its own wrongdoings. The Board needs to be moved out of the DOI and under the DOL as quickly as possible so that a Massachusetts appraisers license will actually be a professional license. Until then, nothing is ever going to happen in favor of shops or consumers. I’ve served on many boards and even held elected office, but the ADALB was truly the most disappointing Board I’ve ever served on and the biggest waste of my time.
PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
PRESIDENT’S MESSAGE continued from pg. 6 know the students. Of course, this doesn’t always mean getting new employees who are ready to hit the shop floor running. Some will be ready for the job, and others will need work, but investing the time and energy into helping them grow now (and treating them right so they stay!) will ensure you have those qualified employees when you need them most. A couple of great organizations that are engaging with collision students and future technicians on a larger scale include the Collision Repair Education Foundation (collisioneducationfoundation.org) and TechForce Foundation (techforce.org), and supporting their efforts is another great way to make sure you’re doing something productive to generate fresh talent in our shops. So, what are you doing? Sitting around complaining doesn’t count, so if you don’t already have a plan in action, take another look at my recommendations above – build your bench now!
PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
AASP/MA PRESIDENT KEVIN GALLERANI is president of Cape Auto Collision Center in Plymouth, MA. He can be reached at (508) 747-0316 or kevin@capeautobody.com.
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New England Automotive Report
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New England Automotive Report
February 2024 13
EXECUTIVE DIRECTOR'S MESSAGE continued from pg. 8 reimbursement, which only serves to benefit the insurer, he turned their “NO” into a resounding “YES!” This very scenario is being played out time after time across the state and the country with more frequency. The realization is that vehicle owners more often than not understand, especially if you are not just complaining but addressing a problem with their assistance. Someone has to pay for the proper repairs at a fair and reasonable rate. When you read the results of the NEAR Industry Survey in this issue (see page 26), it is clearly evident that many shops are saying “enough is enough.” They are making independent business decisions to charge what they are worth, while at the same time divorcing themselves from the insurance company referral and program shop relationships. Relationships which they at one time “may” have found to be somewhat beneficial are now nothing more than an anchor around a drowning person’s neck… an anchor which is holding back an entire industry. Please read part one (grecopublishing.com/new-england-automotive-reportjanuary-2024/) and part two (on page 36) of attorney Sean Preston's article regarding his research into the referral and program shop contracts and the issues they create for shops trying to serve the best interest of their customers that are restricted from doing so in many instances. As more and more shops persevere and strike upon the realization that they too can say “NO,” WE will make our ability to “Get More in ‘24” a reality!
PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
AASP/MA EXECUTIVE DIRECTOR EVANGELOS “LUCKY” PAPAGEORG can be reached at (617) 574-0741 or lucky@aaspma.org.
14 February 2024
New England Automotive Report
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New England Automotive Report
February 2024 15
[VENDOR AFFINITY PROGAM] SPOTLIGHT
ADAS CALIBRATION SHOP To say that Mike and Tom Johnson wear the crown when it comes to ADAS and calibration solutions would be no exaggeration. The father and son duo launched Crown Collision Solutions in April 2021 and continue to achieve much success nearly three years later as they consistently provide auto body shops with all their ADAS needs while also guiding them to related training and resources. Veteran collision repair professional, Mike Johnson, spent nearly four decades wearing many hats in the field from technician to body shop manager. Early on, he saw the challenges that ADAS would pose to those body shops that had no room and resources available to perform in-house calibrations. He decided to launch Crown Collision Solutions so those businesses would not go without the ability to safely and properly repair the vehicles that come to their shops. He then tapped his son Tom, who had a solid background in business solutions, to come on board as his partner, and together, the Johnsons rolled out their royal offering. In less than three years, the company has grown substantially in all areas, expanding their equipment, adding to their team and supplying their customers with nothing less than the best resources around. “We’ve added so much more equipment, targets and calibration items,” says Tom Johnson. “When we first started out, we had one scan tool and one ADAS calibration machine. Not every solution out there is going to have all the answers, all the coverages and all the behind-the-scenes contracts that give you all the access to do all the calibrations, so we invested in other targets and machines to do
Tom Johnson poses with New England Automotive Report outside Crown Collision Solutions. 16 February 2024
New England Automotive Report
by Alana Quartuccio
the calibrations. We now have five or six different scan tools, as well as access to OEM software through a pass-through device, so we heavily invested in more equipment.” They’ve also expanded their crew with an additional person to work on the tech side and another who is involved with the office end of the operation. Prior to working with his father, Tom used his business background in the area of sports management, but he would go on to bring his business organizational skills to the table, joining his father in this venture. He has since gotten “into the thick of it” by putting his hands on every aspect of Crown Collision Solutions as operations manager. He has learned a lot from his father and can do everything from performing calibrations and programming while also dealing with the office end of things from social media, website management and sales. “I love working with my dad. We have a great relationship.”
Crown Collision Solutions is equipped to be a full solutions provider when it comes to ADAS. The business continues to grow along with the ever-changing technology. “A lot has changed, even in a short two year period,” observes Tom. As they continue to find that certain procedures are changing with newer models, Crown Collision Solutions is sure to have the means to keep up with the changing landscape. “We just had a 2023 Toyota Corolla come in. The target used to calibrate the front windshield camera is a different one than earlier models. It may look the same as other Corollas, but it’s almost as though the target is imitated three times. Luckily, we had what was needed in a new ADAS calibration kit we just invested in.” In addition to offering solutions, educating new customers, body shops and glass shops to help them understand ADAS calibrations and the procedures and requirements of when things need to get done is their biggest focus. “Not every car has a light on it that indicates something needs to get calibrated. There are certain rules,” he cautions. Crown Collision Solutions offers more than just taking on the procedures shops can’t do in-house. They also go above and beyond to provide documentation that shops need to back up the procedures, something the competition or a dealership won’t likely continued on pg. 20
"Your Massachusetts Auto Body Association" PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
VENDOR AFFINITY PROGRAM
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February 2024 17
18 February 2024
New England Automotive Report
Boch Hyundai
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New England Automotive Report
February 2024 19
[VENDOR AFFINITY PROGAM] SPOTLIGHT continued from pg. 16 provide. “It’s useful documentation that tells our customers why the procedure was done, so they have ease of access and ease of mind when they go to the insurance company as they have all the information to provide why the car needed that calibration.” They pride themselves in being able to deliver a quick turnaround within a six to 24 hour time period once they receive a vehicle and will also make getting the vehicle to their facility as easy for their customers as they can by offering pick up or drop off services. “We invested in a trailer to pick up most cars. It’s available on a first-come, first-served basis, and we’ll work on it right when it gets here.” They are also conveniently located to most major routes right off 495 and 24 in the Bridgewater area which makes it easy for vehicle drop off. Customers also find great value in knowing the job will get done regardless of any problems along the way. “We do what we can to troubleshoot here and won’t send a car back to a customer and say ‘good luck.’ We will do whatever we can if there is a calibration failure.” They are a full solutions provider when it comes to ADAS. “If you replace a certain module that needs to get coded, we do that too.” The Crown Collision Solutions team remains very active with AASP/MA as a Silver-level Vendor Affinity Program sponsor. They support just about every Alliance event, including the annual golf outing. Most recently, Mike Johnson gave an ADAS presentation
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20 February 2024
New England Automotive Report
during the third part of the Alliance’s “Breaking Free in ‘23” series. “Working with and helping the association keeps us all in check and in line to make sure we are all doing our customers, the state and all of the automotive industry members a service by making sure we are all working together to make sure we are getting cars back to pre-loss condition and back on the road safely,” shares Tom. “Our business involves the safety aspect. We are only doing the calibrations that are required on the vehicle based on the loss of the vehicle in order to get the car back on the road as safe as possible and the way it’s supposed to be. “Being part of the association has helped us tremendously as we network with people and understand some issues and pain points they have that maybe we can help them with,” he continues. “We can piggyback off each other and learn from one another. People may share insights on how they have overcome things that you may need help overcoming. You can find solutions or people who can help you. The more members involved in the association, the better. We have been around nearly three years, and we are learning different aspects of the industry from others. I am fairly new to the industry, and I’ve learned a lot about things that may not be related to calibrations, but it’s relatable because it is our industry. It’s been an absolute joy and pleasure working with AASP/MA.” PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
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[WHERE] ARE THEY NOW
Former MABA Head Bob Johnson Misses the People, Not the Insurance Woes
Many faces have made contributions in fighting for the betterment of the collision repair landscape in the Commonwealth. New England Automotive Report has been on a mission to track down some of the auto body association leaders who have helped pave the way over the years. This month, we caught up with Bob Johnson, former owner of Grove Auto Body and Massachusetts Auto Body Association (MABA) Plymouth County chapter president, to learn about what he’s been up to since he retired from collision repair life. New England Automotive Report: When did you first get into the industry? Bob Johnson: When I was 16….I liked cars, so I used to buy all the hot rod magazines, and I got interested in customized cars. A friend of mine, who is still a friend today, lived next door to me at the time, and he banged up his mother’s car. He and I fixed it in the backyard, so that’s what kind of started it. The body shop that I wanted to work at, Easton Auto Body, was friends with that family. The shop guy saw the car when it was damaged, and then he saw it fixed and asked if another body shop did it. When they told him it was their son and the kid next door, he told them to send me over, and he’d set me up with a job. I kept pestering him until they hired me. NEAR: Tell us about your shop. How long did you own it? BJ: My shop was Grove Auto Body. I started the business in 1970 and sold it in 2001. NEAR: How did you get involved with the association (MABA at the time)?
BJ: I was introduced to John Jason, who owned Centerville Auto Body in Brockton, and Paul Ridley, who was on the MABA Board at the time, and we all became friends. We all decided to get involved at the time as it was all coming apart. NEAR: Were you an officer of MABA? How long did you serve? Any memorable things from those years you’d like to reflect on? BJ: I was on the Board of Directors for seven years, and I was president of the Plymouth County Chapter for two years. We had term limits, something which the government should have today (chuckles). John was the first president of the chapter, and then he got sick. God bless his soul, that guy worked his tail off regardless of whether he was ill or not; it didn’t matter. When he passed away, I became president, and I did it for two years. Getting involved with the association was one of the best things I ever did in my life because I made so many friends. The body shop owners in the area were all good friends, and many still are today, even though some are gone or some sold their shops. We’re still all friends. NEAR: When did you decide to retire, and why? BJ: I couldn't take the fighting and arguing with the insurance companies anymore. I had enough. I just finally had it one day while working on a car in the shop. At one time, I had as many as nine employees, but I had cut it way back to about five or six. It was a day in August that was hotter than hell. I got up off the creeper, and my knee snapped, and it hurt. I have bad knees. I stood up and said, ‘This is it, I’m done.’ I walked from the back room, through the paint shop and body shop to the office, and I said to the girl working in the office, who I was seeing at the time, ‘You better decide what you want to do with the rest of your life, because next year at this time, I won’t be here.” She asked me what I wanted to do and I said, ‘I don’t know what I’m going to do, but I do know what I am not going to do: be here. I’m done.’ Three months later, Danny Sullivan from DJ Sullivan Collision Center called to ask me if I was still interested in selling the business, I said ‘Yes, we need to talk,’ and that was the end of it. NEAR: What have you been doing in the time since you retired? BJ: I left in 2001, and I started a sign business (truck lettering, boat lettering signs). Nobody tells me what my labor rate is going to be…nobody says, ‘We don’t pay for that.’ I don’t hear any of that anymore, and it’s like a breath of fresh air. NEAR: Do you think the industry has changed since you stepped away?
Former MABA Plymouth chapter president and shop owner has fond memories of the early days. 22 February 2024
New England Automotive Report
BJ: As per what I hear from a close friend of mine, it’s gotten worse. Now, some shops are charging a copay, and I think that’s a very smart move. But you have to get everybody to do it. I know of at least three shops right now who are doing this, and the customers
by Alana Quartuccio
are paying it. What do you do when you go to the doctor? It’s the same thing. But if you're on all these damn referral lists and program lists, you can't do that because you agree that all you want to get paid is what the insurance company will pay. And that is the biggest problem with this industry, and it always has been. If you sign on to say that X amount of dollars is all you need and then there’s shops like mine that weren’t on any lists, why should i have to get the same amount that they get? NEAR: Do you have any hobbies you’d like to share? Bob Johnson still loves BJ: Yes, I have two hot rods. working on hot rods. One is a Pro Street ‘57 Chevy, and I have an ‘87 Grand Marquis that my mother bought brand new.
screwdriver to use but wants to tell me how to fix the car and what he’s not paying me for. That is frustrating. NEAR: What is the one thing you think you got out of this industry you would not have gotten if you didn’t pick this career? BJ: At one time, you could make a good living in that business, and you were proud of what you did. I did a lot of high-end cars. We didn't specialize in it, but I did a lot of work for a Ferrari dealership and Porsche and BMW dealerships. It was very satisfying. These people buy $100,000 cars, and then they crash it and want to see it be corrected. I remember a customer saying, ‘Wow, it looks like nothing ever happened to it!’ That’s the way it is supposed to be. I do miss the customers. I don’t miss insurance appraisers. I am still friends with a couple of them who were ok guys, they were just doing their job. But there were some of them that would lie and tell you they were going to pay for something, and then you’d get the sheet and see all the things they left out. NEAR: Anything else you’d like to share with your former colleagues and friends? BJ: I miss them. I miss the people. We had a good thing. It was like a family here in Plymouth County.
NEAR: What comes to mind when you think about your time in the body shop industry? BJ: It was okay at one time. You could make a good living at it, but it got to the point where things were so bad some of the big shops began ‘stealing’ to make up the difference. I talk to people who work for them. They’re not putting stuff on the cars, or they won’t straighten that or fix this, and that is how they make up the difference. That’s not fair because you’re not cheating the insurance company; you’re cheating the customer. It’s just not right. I had one of these shops call up one day, back when I was on the Board, and ask me, ‘What are we going to do about the labor rate?’ and I said, ‘Wait a minute, did you say we? You are on every referral list in the state that says I have to work for that labor rate and you are telling me that we have a problem?’ I hung up on him. What a stupid thing to ask, ‘What are we going to do about the labor rate?’ He was the problem.
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MASSACHUSETTS
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BJ: What I miss about the body shop industry is my people. The other shops. We all became good friends. We all worked very, very hard to make a difference. We had meetings once a month. We had good turnouts. We had like 20 people turn out for a meeting on a Wednesday night. And we shared a lot of information. Not anti-trust stuff, just information about how you can make your shop run better and stuff like that. We worked hard, and I miss that camaraderie, but like I said, I am still friends with most of them today, those who are still with us. What I miss the least – I am just so happy to not be arguing with some bonehead appraiser who never fixed a car in his life and wouldn’t know which end of the
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New England Automotive Report
February 2024 23
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.
626 E. Elizabeth Ave., Linden, NJ 07036 Phone: (908) 925-6133 Fax: (908) 925-4344 414-416 Madison Ave., Paterson, NJ 07524 Phone: (973) 279-8300 Fax: (973) 279-9030 631 Clifton Ave., Toms River, NJ 08753 Phone: (732) 797-3942 Fax: (732) 797-0774 100 Melrich Road, Cranbury, NJ 08512 Phone: (609) 860-2800 Fax: (609) 860-2801 4 Emery Ave., Randolph, NJ 07869 Phone: (862) 244-4818 Fax: (862) 244-4822 24 February 2024 New England Automotive Report www.kemperle.com
New England Automotive Report
February 2024 25
[NEW ENGLAND AUTOMOTIVE REPORT] INDUSTRY SURVEY RESULTS
Changes, Challenges & Conquests:
New England Automotive Report’ Report’s Survey Results by Chasidy Rae Sisk
Ask almost any collision repairer to name some recent changes in their shop, and they are likely to spout off a series of shifts in the business, ranging from subtle to significant, due to advancing technology, insurer interactions, customer expectations and so much more. Auto body professionals are constantly plagued with a cacophony of changes, challenges and conquests, and when your time is consumed with merely keeping your head above water, it’s easy to forget how many others are in the same boat. Of course, no two shops are exactly the same, but have you ever wondered just how different – and similar – your facility is in comparison to other shops around Massachusetts? Are other shops in the Commonwealth still participating in referrals and programs? How do they educate their customers about vehicle complexity? How are they contending with ADAS, EVs, consolidation and OEM certification? Maybe, you’re wondering if you’re the only shop balance-billing vehicle owners. Wonder no more! The New England Automotive Report Industry Survey 2023 provides an easy way for shops to get a glimpse into the inner workings of other local collision businesses and learn what problems other local shop owners are facing. The answers to the previous questions and many more fill the following pages, so keep reading to check out this year’s survey results. Thank you to all the shops who participated in this survey. We hope that you find this information enlightening and useful. 26 February 2024
New England Automotive Report
[NEW ENGLAND AUTOMOTIVE REPORT] INDUSTRY SURVEY RESULTS
How long have you been in business?
What is the age of your oldest employee?
1-5 years: 8% 6-10 years: 2% More than 10 years: 90%
30-40: 2% 41-50: 8% Over 50: 90%
Desperate times call for elevated searches. More shops are utilizing various means of searching for new employees with a 40 percent increase in word of mouth referrals, 23 percent increase in online searches and 16 percent more shops relying on local vocational schools compared to last year when only 15 percent of shops indicated they were searching “everywhere.” Tragically, many new hire searches are futile because as one shop owner dismally indicated, he “can’t find any qualified help.”
Are you on a referral or program? Referral: 13% Program: 6% Both: 23% No: 58%
What is the annual salary of your lowest-level employee?
If you selected “yes” to being on a referral, how many referrals are you on?
Less than $25,000: 15% $25,000-$35,000: 31% $35,001-$45,000: 25% $45,001-$55,000: 14% $55,001 or more: 15%
1-5: 89% 6-10: 0% More than 10: 11% If you selected “yes” to being on a program, how many programs are you on? 1-5: 100% 6-10: 0% More than 10: 0% When the survey debuted in 2021, 52 percent of shops responded that they did not participate in any referrals or programs, and given the pressures that insurers place on shops engaged in these contracts, it’s not surprising that an additional four percent of surveyed shops report refusing to participate in either type of relationship.
How many full-time employees do you have, including yourself? 1-5: 42% 6-10: 23% 11-20: 23% More than 20: 12%
How many part-time employees do you have, including yourself? 1-5: 92% 6-10: 4% 11-20: 2% More than 20: 2%
What is the age of your youngest employee? 18-25: 46% 26-35: 25% Over 35: 29%
What is the annual salary of your highest-level employee?
Year over year, the effects of the technician shortage can be seen in the number of full-time employees in shops as well as employee ages. In 2021, 37 percent of shops had 11-20 employees, and 27 percent employed no more than five individuals. Those numbers inverted to 39 and 27 percent, respectively, last year, and in 2023, we see even fewer employees in a larger number of shops. While the oldest employee’s average age has remained fairly constant (90 to 94 percent being over 50), shops with an employee between 18-25 years old dropped from 64 percent all the way down to 46 percent in the past two years.
Where do you look to hire new employees? Word of mouth/referrals: 67% Online: 60% Local vocational schools: 45% Everywhere: 52% Not searching: 12%
Less than $70,000: 14% $70,000-$85,000: 19% $85,001-$99,999: 19% $100,000 or more: 48% While around 70 percent of the lowest level employees continued to make $45,000 or less, appreciation for experienced employees was expressed in 2023 with a 19 percent increase in salaries over $100,000 and a 25 decrease in salaries under $70,000.
Are you familiar with AASP/MA’s legislative agenda for the current session? Yes: 100% No: 0%
Do you feel that your customers care about the issues facing the collision repair industry? continued on pg. 30 New England Automotive Report
February 2024 27
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New England Automotive Report
New England Automotive Report
February 2024 29
[NEW ENGLAND AUTOMOTIVE REPORT] INDUSTRY SURVEY RESULTS continued from pg. 27 Yes: 26% No: 74% Nearly three-quarters of shops are convinced that consumers are indifferent to the industry’s plight, up from 57 percent in 2022. Many shared their thoughts on the topic: “The majority of customers do not care, but some do.” “Mainly they don’t because they are not aware of our issues.” “Customers’ reactions range from ‘I don’t want to pay anymore than insurance’ to ‘let me know what I need to do to make a difference.’” “They just want their cars fixed; we have to deal with their insurance if there are any problems. The idea of getting the customer involved is total BS.” “The insurance companies poison them with threats of increasing rates.” “Customers only want to know three things – how cheap, how fast and can they avoid paying the deductible.” “They do not care until we explain to them why they should care.”
As an industry, how do you think we can better educate customers? Television/radio commercials: 50% Social media campaigns: 68% One-on-one conversations with the customer on-site: 71% Office signage: 47% Emails and letters sent from shops and the Alliance: 47% By better educating shops so they can educate more customers: 56% Nearly 90 percent of survey participants agree that the shop needs to take a multipronged approach to consumer education, meeting the customer where they’re at and making sure pertinent information is available on a regular and consistent basis, not just during the high-stress shop visit following an accident. “Each shop needs to be a consumer advocate,” one shop owner insisted, while another suggested it might be beneficial to “have a journalist investigate the Department of Insurance (DOI) and Auto Damage Appraiser Licensing Board (ADALB) and report to the masses.”
Do you balance-bill customers (charge a copay) when insurance reimbursement does not cover the entirety of your invoice? Yes: 62% No: 38% The Alliance has been educating shops on the benefits of balance-billing, and it’s obvious the message is reaching Commonwealth shops with nearly twothirds of respondents subscribing to this practice according to the debut of this question.
What do you think is the most pressing issue affecting shops today? Despite ongoing legislative efforts, training and the increasingly common practice of balance-billing by shops, labor rate suppression continues to have the largest negative impact on shops with 70 percent of survey respondents lamenting this issue, up from 61 percent in 2022 and just over 50 percent in 2021. The workforce shortage also causes significant concern for 21 percent of shops; however, one repairer believes vehicle complexity is linked to the technician shortage, noting “Overengineered vehicles are pushing techs away from this field.”
Are you currently certified/ recognized by an OEM to perform collision repairs? Yes: 38% No, but I’m working toward it: 18% No, and I do not plan to become certified/ recognized: 44%
44% 38%
If you answered that you ARE certified/recognized by one or more OEMs, please list them below. Certified shops mentioned 17 distinct
30 February 2024
New England Automotive Report
manufacturers for which they’ve received the necessary training, tools and equipment to achieve their certification. The most prevalent OEM certifications referenced by survey participants included GM, Subaru, Honda/Acura, Nissan and Kia. Those who refrained referred to OEM certification as “a money grab” and indicated the “programs are trash.”
If you answered that you ARE certified/recognized by one or more OEMs, what is your incentive to continue with the program? The benefits of OEM certification vary from shop to shop, but nearly 70 percent of shops indicated that enhanced access to OEM procedures and a positive impact on the shop’s reputation are the main draws for maintaining certification. Additional incentives include access to OEM training, direct marketing through the OEM and better access to OEM parts, as well as increased workflow and revenue. “The differentiation of being certified supports our labor rate and justifies a co-pay,” according to one shop.
How do you feel OEM certification programs will impact your business? My business will be affected in a POSITIVE way: 47% My business will be affected in a NEGATIVE way: 9% My business will not be affected: 44% For the first time, less than half of surveyed shops indicated that OEM certification positively impacts their business, while the number of participants who feel there’s no impact increased from 31 percent in 2021 to 37 percent in 2022 and now has jumped up to 44 percent. Those who do not believe their businesses will be affected offered comments: “Currently, the expense outweighs the return.” “It’s not that I am against being certified. It’s just that there is no financial incentive to do it.” “Been there, done that…It’s a sales gimmick for OEMs.”
[NEW ENGLAND AUTOMOTIVE REPORT] INDUSTRY SURVEY RESULTS
How would you rate your current state of business? 1-3: 9% 4-6: 21% 7-8: 47% 9-10: 23% It seems that the current state of business for shops in Massachusetts is on the upswing. In the previous two surveys, 57 percent of shops gave a rating of seven or higher, compared to 70 percent in the 2023 NEAR Industry Survey.
Over the past year, have your sales increased, decreased or stayed the same? Increased: 68% Decreased: 12% Stayed the same: 20%
In your experience, which insurer do you find the most difficult to deal with, and why? Shop owners identified 10 insurers in response to this question, but the three most commonly mentioned carriers were Progressive (35 percent), Allstate (29 percent) and Liberty Mutual (18 percent). Shops indicated that Progressive “lacks communication,” “delays paperwork,” “does not return calls” and “fails to negotiate in good faith.” One respondent provided a list of Progressive’s flaws: “Cycle time is abysmal. Blatant refusal or inability to exercise any shred of common sense. Zero concern for their customer. Inability to define customer service.” Objections about Allstate included parts selection and low labor rates, while Liberty Mutual was described as “cheap and doesn’t care about customers” and “refuses to pay for OEM procedures.” Additional insurers identified as creating difficulties for shops include Esurance, GEICO, Hanover, MAPFRE, State Farm, Travelers and Vermont Mutual; however, 18 percent of respondents indicated that all or most of them are difficult to deal with. “They are all about the same. They want us to use the least expensive part and let the shops struggle to make it fit.” “They don’t follow state guidelines when requesting supplements. They’re
making us do more of their job without reimbursing us.” “They’re all the same; they just want to squeeze the most out of every penny.” “Lack of negotiation, unresponsiveness, disregard for laws and regulations.” In fact, several respondents indicated that various insurers refuse to negotiate or respond in a timely manner, citing CMR 212 as the regulation insurers neglect to abide by. One shop owner offered a unique perspective: “Insurers are not my problem. The vehicle owner deals with insurers because they picked them, not me!”
Similar to responses about attracting new employees, shops in the Commonwealth use a variety of methods for promoting their businesses to current and potential customers. Of those who indicated that they advertise, 88 percent utilize multiple forms of marketing, yet the most common advertising method remains the good old-fashioned referral. “After more than 40 years, we don’t need any other advertisement,” one participant boasted.
What is the current hourly labor rate you are being reimbursed by insurers?
A positive impact: 68% A negative impact: 0% A mix of both: 9% No impact: 23%
Less than $40: 0% $40-$59: 94% $60-$79: 3% $80-$99: 3% $100 or more: 0%
How do you feel social media and digital platforms like Yelp have impacted your business?
Do you feel that your shop is prepared to repair electric vehicles (EVs)? Why or why not?
What do you think your labor rate should be?
Yes, we are prepared: 26% No, we are not: 74%
Less than $60: 0% $60-$79: 38% $80-$99: 38% $100 or more: 24% Efforts to combat the egregiously low labor rate in Massachusetts has led to some increases, though it’s obvious that shops have a long way to go. When this survey debuted, 12 percent of shops reported making less than $40 with the remainder falling into the $40-$59 bracket. Last year saw only seven percent making less than $40, a number that dropped to zero this time around. But while only six percent report making more than $60 an hour, all respondents believe they are worth at least that much.
How do you promote your business to current and potential customers? Word of mouth/referral/reputation: 97% Internet (social media/website/Google/ Yelp): 68% Local advertising (cable/radio/community involvement): 62% None: 3%
Progress marches on, but fewer shops in 2023 indicated being prepared to repair EVs compared to last year’s 37 percent who felt prepared. This decrease could very likely be connected to shops beginning to acquire a better understanding of exactly how complex these vehicles are. “EVs are emerging technology, and it’s difficult to get proper facts,” one respondent acknowledged, while another lamented the “poor access to training.” Comments like “We are getting there. We’re sending technicians to I-CAR’s week-long class this winter” and “We need additional tooling and training to be 100 percent ready for all EV repairs” suggested that some shops are in the process of getting ready. On the other hand, several survey respondents indicated that they have no interest in preparing for the EV evolution. “I don’t intend on repairing them,” one shop owner reported.
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February 2024 31
[NEW ENGLAND AUTOMOTIVE REPORT] INDUSTRY SURVEY RESULTS
Have you and/or your employees undergone any training in the past year? Yes: 62% No: 38% Although technology advancements continue coming at astronomical speed, less than two-thirds of shop owners indicated that they or their employees had attended training over the past year. While 65 percent included I-CAR training in their agenda, others trained with ASE, OEMs, paint companies and jobbers.
As a shop owner, do you feel that MSOs (Caliber, ABRA, Crash Champions, etc.) are:
Closing:
The constant changes that shops face can feel overwhelming, and it’s easy to let those challenges beat you down, but it’s important to remember that there are always ways to navigate those issues. We hope this year’s survey results help guide you to making business decisions that will benefit your customers and employees as you continue to safely and properly repair vehicles, and while challenges will always exist, we hope you find strength to stand your ground in the knowledge that you are not the “only one” fighting this battle. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
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A threat: 18% Irrelevant: 64% An opportunity: 18% Massachusetts shops continue to be largely unimpressed by consolidators, indicating that the names are unfamiliar to local vehicle owners and that they aren’t worried about losing clientele to MSOs that may enter the market. After all, if quality is king, no one’s throne is being threatened; as one respondent shared, “A porterhouse at Applebees will never compare to Del Friscos.”
With technology changing more rapidly than ever before, where do you see this industry 10 years from now? It’s impossible to talk about the collision repair industry without discussing rapidly changing technology and how it will affect shops going forward. Survey respondents shared some of their thoughts on how that may shape the future and what the industry could look like in 2033. Many predictions were bleak, suggesting that the industry will be “in the toilet” or “in the dumpster.” “Those who don’t train and who spin their wheels on the uncontrollables will be in trouble. Those who stay the course, train and don’t get caught up in the ‘noise’ will thrive.” “Small shops will die due to the stranglehold on labor rates.” "Consolidated, less small shops. Fewer incorrect repairs if we can get rid of DRP, but way more incorrect repairs if DRP stays. Huge sales and profits into the foreseeable future.” “Major problems for those who choose to ignore the signs we are seeing today.” “Obsolete and out of business if the labor rate and insurance practices don't change. There are also not enough employees to fill vacancies due to the inability of shops, especially small ones, to pay a competitive wage.” Some see a brighter future for the shops that are willing to invest in the training and equipment needed to repair today’s complex vehicles. “More professional because the shops that don’t keep up will slowly disappear.” “I see fewer shops with more emphasis on OEM certifications.” “I believe this industry will be better for technicians and shop owners who stay current in 10 years." 32 February 2024
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February 2024 33
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Patrick Subaru 247 Boston Turnpike Shrewsbury, MA 01545 508-756-8364 Fax: 508-752-3691 www.patricksubaru.com jlavalley@patrickmotors.com
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February 2024 35
[LEGAL] PERSPECTIVE by Sean Preston, Coverall Law
The Not-So-Fine Print on Referral and Program Repair Contracts, Part 2 This continues from last month’s article (available at grecopublishing.com/near0124legalperspective) to wrap up Coverall Law’s analysis of insurer referral and program repair contracts, the effects on repairs, consumers and repair shops and what can be done. The contracts reviewed were as old as 2010 and as recent as 2022. Those contracts covered repair programs and referral agreements, but they were largely hybrids, combining elements of the two. Last month, we discussed the influence insurers wield in the repair relationship and communication issues, and this month, we will focus on potential financial issues and how to preserve a repair shop’s independence.
insurance company, the vehicle may occupy limited space without accruing storage charges, further impacting the repair shop's ability to generate revenue. And at least one program contract gave the insurer the ability to defeat a valid lien and retake the vehicle. Repair shops may find themselves at a disadvantage when attempting to prompt a response from the insurance company. This inability to effectuate a timely response can exacerbate the financial strain, creating a domino effect within the repair process and further damaging the shop's overall financial health and possibly its reputation. Effectively managing financial constraints within insurance referral programs demands strategic considerations:
Financial Constraint and Preferred Rates Within the intricate dynamics of insurance referral programs, the financial constraints imposed on repair shops stand as a significant challenge. As repair shops navigate the labyrinth of pricing agreements dictated by insurers, their ability to maintain preferred rates and financial independence becomes increasingly precarious. There is a nuanced world of negotiation pressures and their profound impact on line items, exploring the potential consequences for repair shops. Repair shops engaged in referral programs face intense pressure to accept pricing agreements imposed by insurers. These agreements may limit the repair shop's ability to charge fair and reasonable rates, creating a delicate balancing act between securing business through the program and maintaining financial independence. Rates are typically locked in at below-market levels. The pressure to conform to insurer-imposed pricing can have direct implications on the overall profitability of repairs. As repair shops may be compelled to accept rates that do not align with their preferred pricing structures, it becomes challenging to cover operational costs adequately and achieve a desirable level of profitability. Beyond the broader pricing agreements, specific line items crucial to the repair process – such as storage fees and administrative charges – are either not allowed or subject to stringent constraints. Repair shops may find themselves restricted in their ability to charge what they consider fair and necessary for these services, and storage charges are often capped. The consequence of these constraints is a struggle for repair shops to cover their costs adequately. This financial strain can lead to potential compromises in service quality, as shops may be forced to cut corners or limit certain services due to the constraints imposed by insurers. Perhaps most striking is the inability, if under contract, to balance-bill the customers for any allotments over and above that allowed by the insurer. The financial challenges become even more pronounced in cases of delays by insurers. When there is a delay in the response from the
1. Repair shops must hone their negotiation skills to strike a balance between participating in insurance programs and safeguarding their financial interests. This involves advocating for fair pricing structures that align with the shop's operational costs. 2. Repair shops should carefully review and negotiate contractual terms with insurers, explicitly outlining preferred rates for specific services and line items. Clear contractual agreements can serve as a foundation for fair and transparent financial dealings. 3. Repair shops, individually or collectively, can advocate for fair compensation for services rendered. This may involve engaging in industry discussions, leveraging professional associations and actively participating in negotiations with insurers.
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The financial constraints imposed by pricing agreements within insurance referral programs present a complex challenge for repair shops. Navigating this landscape requires a proactive and strategic approach to preserve financial independence and uphold the commitment to quality repairs. By advocating for fair compensation and transparent contractual agreements, repair shops can strive to maintain the delicate balance between participating in insurance programs and ensuring their financial sustainability. Preserving Independence In the intricate dance between repair shops and insurers within insurance referral programs, the pursuit of quality service can often be overshadowed by the pressure to prioritize repair volume. This delicate balance poses a dilemma for repair shops, leading to the crucial question: How can repair shops preserve their independence and uphold their commitment to excellence while meeting the demands of insurers? Repair shops engaged in insurance referral programs often find themselves facing the relentless pressure to prioritize the quantity of repairs over the quality of service. The emphasis on meeting insurer requirements, such as quick turnaround times and costcontinued on pg. 38
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February 2024 37
[LEGAL] PERSPECTIVE continued from pg. 36 saving measures, can create a dilemma for repair shops. Further, some program contracts dictate that vehicles received through the program receive priority over other customers. Balancing the need for repair volume with the commitment to delivering quality service is a precarious tightrope walk. Repair shops may be compelled to make concessions that compromise the thoroughness of repairs or the use of high-quality materials, potentially impacting the overall satisfaction of vehicle owners. Repair shops must actively advocate for the interests of vehicle owners in the repair process. This involves going beyond meeting insurer demands and ensuring that repair decisions prioritize the safety, satisfaction and long-term well-being of the vehicle owner. Unfortunately, several of the reviewed contracts ban an assignment of rights and the ability to more actively assist customers with their claims. Repair shops are entrusted with the responsibility of delivering quality service, and customer advocacy plays a pivotal role in maintaining this focus. By actively engaging with insurers on behalf of vehicle owners, repair shops can strive toward a harmonious balance that prioritizes both customer satisfaction and adherence to insurer requirements. Repair shops carry the ultimate liability for the repairs they undertake. While insurers may set the parameters and make demands, it is the repair shop that bears the responsibility for the quality and safety of the repairs performed.
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That’s really important for shops to understand, so let me stress that fact again: Repair shops carry the ultimate liability for the repairs they undertake. While insurers may set the parameters and make demands, it is the repair shop that bears the responsibility for the quality and safety of the repairs performed. Repair shops must strive to preserve their autonomy in decision-making; their commitment to excellence must remain unwavering. This involves advocating for the right to make decisions based on professional judgment and expertise, aligning with the best interests of the vehicle owner. Effectively preserving independence within insurance referral programs demands strategic initiatives: 1. Repair shops should establish and communicate clear standards for repair quality. This includes detailing the use of high-quality materials, adherence to industry best practices (not those restrictions set by contractual agreements) and a commitment to safety standards. 2. Actively educate both insurers and vehicle owners about the importance of quality repairs. By fostering an understanding of the long-term benefits of thorough and meticulous repairs, repair shops can garner support for their commitment to excellence. 3. Engage in strategic negotiations with insurers to strike a balance continued on pg. 42
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February 2024 39
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New England Automotive Report
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Only Genuine Nissan Parts deliver the fit, reliability, and performance to meet your shop’s collision repair needs. So keep it original, and keep it real with Genuine Nissan Parts. Contact these Nissan dealers for all your parts needs: Mastria Nissan 1305 New State Highway Raynham, MA 02767 Direct Toll Free: 800-248-2458 Direct Fax: 508-802-6118 E-mail: parts@mastrianissan.com Web: www.mastria.com
Kelly Nissan of Lynnfield 275 Broadway Lynnfield, MA 01940 Toll Free: 800-698-9280 Fax: 781-598-8026 E-mail: dlacoste@kellyauto.com
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Quirk Auto Dealers 115 E. Howard St. Quincy, MA 02169 Toll Free: 877-707-8475
New England Automotive Report
February 2024 41
[LEGAL] PERSPECTIVE continued from pg. 38 between repair volume and quality service. This involves advocating for reasonable timelines, fair compensation for quality work and the autonomy to make decisions that align with professional expertise. Preserving independence in the face of insurer demands requires a multi-faceted approach. Repair shops must navigate the delicate balance between quantity and quality, actively advocate for the interests of vehicle owners and assert their autonomy in decisionmaking. By implementing these strategies, repair shops can strive to uphold their commitment to excellence while participating in insurance referral programs. Although insurance referral and repair programs offer some benefits, the challenges they pose to the contractual relationship between repair shops and vehicle owners cannot be ignored. Repair shops must navigate these pitfalls with a strategic approach, placing the interests of the vehicle owner at the forefront while acknowledging the advantages these programs may bring to the table.
ADVERTISERS’ INDEX Accudraft Paint Booths............................... OBC Albert Kemperle..............................................24 Audi Group.....................................................18 Balise...............................................................32 BMW Group...................................................28 Boch Chevrolet (GM Parts Group)..................32 Boch Hyundai.................................................19 Colonial Auto Group.........................................2
PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
Coverall Law Managing Attorney Sean Preston finished in the top of his law school class at the historic Howard University School of Law in Washington, DC after serving in the United States Army. He went on to excel in business and legal strategy, serving some of the world's most recognizable brands in neighboring industries. Sean recently returned from Berlin, Germany with his family (where he served in Rolls-Royce's General Counsel function) and today resides in Wareham, MA, where he helps to oversee and meaningfully lead efforts in the region for Coverall Law. He can be reached at (508) 6355329 or spreston@coveralllaw.com.
Coverall Law....................................................38 Crown Collision Solutions...............................20 Empire Auto Parts...........................................42 Ford Group.....................................................33 Grieco Toyota..................................................33 Honda Group....................................................9 Hyundai Group...............................................14 Ira Subaru........................................................14 Ira Toyota of Danvers......................................15 Kelly Automotive Group.............................. IBC
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Kia Group.......................................................23 Lombard Equipment.......................................21 Long Automotive Group.................................13 Mazda Group..................................................40 Mopar Group....................................................4 Nissan Group..................................................41 NORTHEAST™ 2024.....................................35 Quirk Wholesale Parts.....................................29 Sarat Ford Lincoln...........................................19
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Subaru Group..................................................34 Thomas Greco Publishing................................40 Toyota Group..................................................37 USI North America.........................................25 Volvo Group....................................................20 VW Group........................................................3
Check out our website www.empireautoparts.com or reach us at 800.624.4561 42 February 2024
New England Automotive Report
Wagner Motors................................................39 WIN................................................................12
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February 2024 43
44 February 2024
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