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Letter to the Editor

A Change in Tone

Have collision repairers reached a turning point in terms of dissatisfaction with the state of the industry?

For at least a few minutes, it felt like “old times” at the Collision Industry Conference (CIC) last month.

One after another, collision repairers came to the microphone and gave emotional, sometimes fiery condemnations of the state of the industry, urging fellow shop owners to stop allowing themselves to be walked over.

It was a long way from the polite talk of shop-insurer “partnerships” that has been the norm at CIC over much of the past decade or more. So does it signal some change taking place in the industry – or just a momentary pause before “business as usual” resumes?

Enough is enough

Former third-generation shop owner and CIC chairman Lou DiLisio, now an industry consultant, kicked off the speeches during an “open mike” session at the beginning of the CIC meeting in Atlanta.

“I’ve been part of this industry my entire life, and in the last year, I gotta tell you the things I’ve seen going on in this industry just make me sick to my stomach,” DiLisio said. “I think everybody is just fed up with all the things that are going on that are causing the pain not just at the repairer level but at the insurance company level, the vendor level, the manufacturer level, everybody. We need to unite and start to address some of these issues instead of allowing people to run all over us. I could spend the next five hours on specifics but CARSTAR just wrote a letter that pretty much says the exact same thing: enough is enough.”

DiLisio was referring to a recent open letter to the industry from Dick Cross, CEO of the CARSTAR franchise chain of shops. In the letter, Cross said that his company sees “a heightened air of tension across our franchise system that we believe represents the emotional state of our entire industry.”

That tension, Cross said, is based in part on new claims handling programs and by the economic reality of buyers (insurers) taking advantage of an excess supply (collision shop capacity).

DiLisio was one of several of those who spoke at CIC who applauded CARSTAR for its letter urging “responsible push-back” by shops on such issues as unreasonable allowances for blend times and materials.

DiLisio also spoke of the New York shop owner who recently filed a $40 million lawsuit against Progressive Insurance for illegal steering of insureds to Progressive DRP shops.

“He’s put together these buttons that say, ‘Enough is enough,’” DiLisio said, holding up one of the large yellow buttons being given to those who made a contribution to the New York shop’s legal fund. “And enough is enough. We have to start taking control of our own segments of the industry. I’m not blaming any one segment. We all have blame in this thing. The insurance companies have abused the database times to the point where the repair facilities are going after the information providers and scrutinizing tenths of labor on individual operations. And the reason is because it’s the only outlet they have to try and collect an extra tenth of an hour to pay their bills at the end of the week.”

Acquisitions and the drive for dividends by those within insurance companies who know nothing about collision repair but only “know how to count money” are forcing claims personnel to do things they don’t want to do, DiLisio said.

“The [shop] consolidators are trying everything they can do to keep their shops busy. It goes on and on and on,” DiLisio said. “Somewhere, somehow, we have to get our arms around this thing and we have to put a stop to it…. We’ve got to make sure we address the issues and stop letting everybody run rampant. The abuses and misuses of data out there, the abuses and misuses of the DRP agreements out there…I mean, c’mon, how ridiculous can we get when we ask a shop to hold an insurance company harmless for a job they sent to that shop in the first place? This stuff has got to stop.”

The floodgates open

Although DiLisio’s comments drew applause from many at CIC, it was not at first clear if anyone else would echo his stand. A brief silence followed in the room until Sheila Loftus, formerly a trade association executive and editor of Hammer & Dolly, challenged the CIC crowd.

“Lou DiLisio spoke from his heart. I think there were heads nodding in the room. Are we just going to sit here?” Loftus said. “It does look like that. Maybe it’s too late, but I think it’s time to do something.”

That seemed to stir others to come to the microphone.

“Part of the reason I haven’t been here (at CIC) for a while is I became very disenchanted with the whole process,” Kansas shop owner Bill Eveland said. “I think it started a long time ago when we began to give this industry away or give it over to our trading partners. It was said by one gentleman in this room at a meeting one time that, ‘Make no mistake. The insurance industry is not your friend if you are a repairer.’ We’ve lost sight of that. Yes, we have to do business and co-exist. But we’ve kind of opened the door and invited them in. And now we are reaping the results. I’ve suggested for a long time that as an industry, we simply do what we tell our children to do as it relates to drugs: Just say, ‘No.’ It’s written on many police cars around the nation. It needs to be written on your building.”

Aaron Schulenburg of Bill Denny’s Body Repair in Havre de Grace, Maryland, agreed that discussion at CIC is not enough.

“I think we all know it’s been an absolute battlefield in the shops… in the last six months and the last year in particular,” Schulenburg said. “The purpose here is to bring these issues and openly discuss them, but I think what we all need to remember is when we leave here, we go home to our shops. And that’s where we can make our decisions on what we’re going to do. Discussing it here and leaving it here doesn’t have the same effect as going home and making your decisions as an individual shop: What am I going to do and how am I going to handle the situation.”

Massachusetts shop owner Chuck Sulkala agreed.

“If you don’t like what’s going on this industry, and it doesn’t matter where you come from in this industry, you can no longer sit back and say, ‘Gee, I hope somebody does something,’” Sulkala said. “If you think that something is wrong, you better stand up for your beliefs. If you don’t believe this industry has some value and meaning and purpose, then do us all a favor and step out now. Because the rest of us do care about it. We can’t just sit here and believe that somebody else is going to solve our problems. If you have a mirror, look at it, because you’ll see where the solution starts.”

The emotion of many of the speakers was clear. Craig Griffin, of Laney’s Collision Center in El Dorado, Arkansas, said he grew up watching his father fix cars, but for “the last two years, it’s really gotten to the point where it’s a month to month battle to stay open,” despite the company’s nearly 70-year history. Nebraska shop owner Boyd Dingman said his business has been blackballed for “saying no” when asked “to do the wrong thing.” Atlanta area shop owner Gene Hamilton said he is close to getting out of the business if it comes to a point of not being able to do things right and to be proud of what he does.

“I can’t understand why somebody would want to starve out the people who work the hardest to do the best job and then have to face people who say, ‘I don’t pay for that’ and ‘I don’t respect what you do. You’re going to do it my way or we’ll pull the car out,’” Hamilton said.

Where from here?

A few speakers at CIC suggested possible courses of action. Steve Regan of the Massachusetts Auto Body Association suggested that repairers needed more help from paint companies, rental car companies and other segments of the industry. And Massachusetts shop owner Rick Starbard, president of the Alliance of Automotive Service Professionals (AASP) of Massachusetts said one thing such companies could help with is outreach to more of the repair industry.

“What we need to do is reach the shops that aren’t here, that don’t attend regular meetings,” he said, acknowledging that some of those shops “don’t want to be reached.” But, he said, “The only way we’re going to move forward is to get those shops to participate, because they’re the guys who are bringing us all down.”

It seems clear from the CARSTAR letter, the CIC discussion and similar sentiments expressed by shop owners with increasing frequency in recent months that repairers are feeling besieged upon perhaps like never before. It remains to be seen, of course, whether such words will translate into any real changes within the industry.   o

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