What a strange business all of you are involved in. Every collision shop owner in the country does the same work, some do it better than others, but each of you is in the business of repairing damaged automobiles. And that my friends are where the similarity ends. Some of you are great businesspeople who know how to make a profit, how to maximize productivity, how to obtain the greatest discount on what you buy and most importantly know how to negotiate with the insurance industry. On the other hand the largest number of shops in the country are owned by people who can't get their head out of the sand. Their entire existence is based on complaining, blaming and doing nothing to change their life, they rob Peter to pay Paul, they just kind of survive in spite of themselves. The sad thing is that these people hurt the industry as much as they hurt themselves. Okay, that is the basic makeup of what the collision industry in America is today.

On top of the problem of so many poor businessmen populating the collision industry, auto insurers must look at repairers as naive or stupid. Fifty states in the union. Hundreds of cities in each state, some large, many small, but as far as the insurance industry is concerned each one is treated like a separate country. The pricing of the services performed by repairers are different from city to city, county to county, state to state. Labor rates may vary by ten or twenty percent from one county to the next. The same may hold true from one side of a state to the other. It has always been the policy of the repair industry to blame insurers for holding the rates down when in fact the people who are really at fault are the repairers themselves.

For more years than I would like to count I have heard the same thing from collision repairers when they talk about rate increases. The conversation goes something like this: SHOPOWNER: "It has been four years since we have had a labor rate increase. I'm sick of it. The #$^ insurers just won't pay us what we are worth. There must be something we can do about it!" ME: "When was the last time you notified the insurers or re-posted your rates on the State Farm website?" SHOPOWNER: "If I do that and others don't do the same thing the insurance companies will tell my customers I charge too much." ME: "How do you expect to receive more money if you don't do anything yourself about raising your rates?" SHOPOWNER: "I don't have any power, I think some of the bigger dealers or independents should do it first." And that my friends is the crux of the problem that has always faced your industry (Did you ever notice when I write something good about the collision industry it is "our" industry, but when the subject is bad it is "your" industry? x263a;).

Actually getting paid what you are worth is a lot easier to accomplish than you might think [Although a lot of people couldn't afford to live on that]. If every shop owner calculated what their cost of doing business was and gave that to insurers your labor rate would be much higher and you wouldn't be fixing prices. Ah, that is the rub, because getting shop owners to actually calculate and charge their actual cost is near to impossible. Yet if you could do it your problem of real rates would be solved.

Getting rid of funny time would help. Although funny time is not as big as it was ten or fifteen years ago it still exists. Putting a couple of non-existent hours on the frame or charging four hours for a one hour dent is slowly going by the wayside. This is the reason that people working in the areas that have the lowest hourly labor allowances are screaming so loud [they're not doing anything about it, but they are screaming].

Shop owners who operate in smaller rural areas or smaller towns normally are paid more per hour than those shops that operate in the large metro areas. Why is this you ask? Well let me tell you, in a small area there are far less shops and when one shop owner raises their hourly rate every adjuster is the area is talking about it. It doesn't take long for others to follow suit. There is no price fixing because the insurance adjuster is the messenger of change. The insurance industry is also stuck because when everybody in a small town is charging a higher rate there isn't any shop around to do the work. They have to pay. In the big city an insurer can always find somebody to work on the "cheap."

To be honest I don't know how the collision industry in a big city is able to receive a higher hourly rate. As I said before it would be simple if everybody just charged what they needed to make a profit, but most are waiting for the other guy to do it. It is really bad news since twenty percent of the shops do eighty percent of the work, but eighty percent of the shops control the rates for the other twenty percent.