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The week of March 23, 2009
Too Little Work - Too Many Players
by Dennis Liphardt

Okay, you, you and you, close your doors and find something else to do for a living. If only it was that easy. Let's be honest with each other I am sure that each of you has thought, "Business  would be better if some of the shops around me would go out of business." Not surprising that your competitors have been thinking the same thing.

As cars have added many safety features, as the price of gas has increased, as there are no longer so many drunks on the road, as insurers have totaled more vehicles and people are driving less, we find that the number of cars that are left to repair has dropped drastically in the past few years. Evidence the fact that most major insurers have reduced their estimating staff (and not just because of DRPs). One would have thought that the number of shops in the marketplace would have dropped in a similar manner as claims. Alas that is not the case. The collision industry could afford to lose fifty percent of the shops and those that were left would operate in a much healthier business climate.  

Right now because there are so many shops it is very hard for a shop owner to afford current technology and employee training. The result is more and more cars are improperly repaired even by the best of repairers.

Shop owners themselves have little time to watch the business because they are so busy trying to hustle every job they can find. At a time when the entire collision industry needs to modernize its methods of repair and develop a better quality control system, there is precious little time or money left to pay for the systems.

The timing sucks, insurers are tightening their belts because they have lost money in the stock market, the same as most of you, while repairers are suffering with tremendous increases in overhead cost and shrinking profits (if there is even any profit at all).

To help solve this problem wouldn't it be better if fifty percent of the repairers decided they had enough and closed their doors forever? Of course it would, but as I know all of you are thinking, "as long as it is not me."

How could this problem be addressed without hurting many who depend on collision repair for their livelihood? The answer is it can't. It can only be solved in a couple of ways and like it or not some people are going to be hurt in the process. I can think of a couple of different methods that I believe would be fair. One method is a long-term fix. Very simply if it wasn't so easy to open a collision shop the industry wouldn't see a new name on the door of every shop that goes under. Other industries require certain criteria before a person can go into business. Not so with repairers. If an individual wants to open a collision shop they simply pay the appropriate business fees and Walla they can operate a collision shop. This must stop! Collision shops should have certain equipment and employees or owners should have so much training before anybody is allowed to open a shop. If this was required I would estimate that seventy five percent of new collision shops would not be able to open their doors.

Now the part that is probably a little tougher to deal with, but then again maybe not. Are you tired of losing jobs to shops in your area that are not capable of repairing a vehicle properly? Of course you are. So lets put the same burden on them that we would put on new shops. A collision business in which employees are not properly trained is just as dangerous as a doctor that does not stay current in their field. Both can kill a person because of their ineptitude. So all shops should be required to have their employees trained at a certain level. They also should have the proper equipment to do the job right. Insurance is important in case a customer sues the shop. Warranties? Of course a shop should have those also and they must be written and enforceable. This is just an example of what must occur to lower the number of shops doing repairs.

Obviously the industry itself cannot do the policing on this issue; we need those folks that like to stick their nose into everybody's business. That's right you will need, ahem---- the government. If you can prove to your state legislatures the danger of cars being repaired by people who are not capable of doing the job right you will have taken the first step towards solving this problem of too much capacity.

The choice is yours, do nothing and each of you will have to share a decreasing number of repair opportunities or step up to the

NOTE: This editorial expresses the opinions of its sole author only and does not necessarily reflect the opinions of Autobodyonline, or any of its subsidiary companies, clients, or supporters.


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