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Friday, 03 September 2010 00:00

You get what you ask for--make sure it's enough


In Collision Repair 9#3, Tom Bissonnette asked the Canadian collision repair industry to submit estimates for a 2004 Chevy Suburban. People from coast to coast sent in responses--here's what Tom found out.

The estimates are still trickling in from my last article--thanks to all that have taken the time to help me out with this project.

EstimatesThe first thing that came to mind when I reviewed the estimates was the fact that many facilities are simply not charging for all the procedures that they actually perform--or at least I hope they perform.

If not, then it is no wonder people are not fussy about getting their cars fixed after an accident.

Insurance companies are required to repair the vehicle to "pre-accident" condition. This would allow time to do a repair that is invisible to the customer; they should not be able to tell that their car was in an accident.

I know that in my marketplace many of the line items that I will mention in this article were added only after the industry finally put their foot down and demanded to be paid for procedures that are clearly spelled out in our estimating P-Pages.

By not allowing the time to do proper repair procedures, insurance companies have inadvertently contributed to the poor image of our industry causing consumers to make comments like "once a vehicle is in an accident it is never the same."

Profitability of collision facilities is a big concern for those of us in the trade these days. We would love to see the labour rate approach that of other four-year trades so that we can compete for future employees and make a decent profit.

In the meantime, while we don’t have labour rates up where we feel they should be, we should at least be paid fairly for each and every operation that we perform.

The results

Criteria Results
Labour Rate The average labour rate of all estimates was $63.00 per hour.
Paint The average paint material rate was $32.00 per hour.
Average Paint Hours 4.6. The highest was 6.5 and the lowest was 1.5.
Average paint materials $147. The highest was $214 and the lowest was $58.
Material Rate The average shop material rate was $4.70 per hour, 22% of the shops received nothing for shop materials. Average shop material cost was $33. The highest was $95 and the lowest was $0.
Estimate The average estimate was $975. The highest was $1710 and the lowest was $464.
Repair Time The average repair time of the dent was just under 6.0 hours. The highest was 10.0 and the lowest was 3.0. The average total repair hours were 7.0. The highest was 11.6 and the lowest was 4.0.
Left Quarter Panel Glass Only 20% of facilities removed the left quarter panel glass. The issue of refinish lifetime warranty is compromised if this is not done.
Mask for Overspray Only 33% of facilities elected to charge for "mask for overspray" even though both ADP and Mitchell clearly state that masking of inside jambs and edges are an extra charge item. Mitchell even has a formula for masking inside jambs at the very end of the Refinish Section Procedure 28 of their P-Pages*--I’m not sure if ADP has such a formula.
Corrosion Protection Only 60% of shops charged for Corrosion Protection even though both ADP and Mitchell clearly state that this is an extra process that needs to be paid for. Some shops charge a flat dollar amount while others charged an hourly amount of refinish time and materials. I think the time and materials is a better way to show this process so it shows up on the repair plan that the technician gets and allows them time to do the job.
Feather, Fill and Sand Only 20% of shops charged to "feather, fill and sand" the repaired panel even though both ADP and Mitchell clearly state that their paint times are for "new undamaged panels." They both acknowledge that there is a process to bring a repaired panel to this state but neither company has a formula to determine how much time should be allowed.

Refer to the ASA Repaired Panel worksheet to see the extra steps required for a repaired panel and you will see that they came up with an additional 1.3 hours to feather edge, prime and block the repaired area.

In a shop environment, a painter may do several vehicles at one time so I think at least 1.0 is sufficient for most jobs. Large repaired panels (fleetsides) may require more time.

Covering the Vehicle Only 18% of shops allowed extra time to cover or "bag" the vehicle to prevent overspray damage. Both ADP and Mitchell clearly state that their paint times only allow masking up to 36” away from the repaired area. ADP allows .2 for covering or bagging of a vehicle--more than once if necessary (priming then painting).
Hazardous Waste Removal Only 62% of shops charged for hazardous waste removal usually as a dollar amount on the estimate. I am aware that some insurance companies include this fee in their paint materials but I believe it is better to show it as a separate item and shops should check to see that they are collecting enough money to offset this very necessary part of the repair process.
Clean the Vehicle for Delivery Only 20% of shops charged to "Clean the Vehicle for Delivery." Somehow insurance companies have convinced most shops that cleaning the car is a "cost of doing business" or that it is the customer’s responsibility to bring their car in clean inside and out. Those of us in the trade know better. Lots of vehicle’s show up on a tow truck or in inclement weather and there is no way we can work on vehicles that have a layer of dirt on them. ADP mentions final clean but does not suggest a time for it. I think a good start for this would be .5 for each and every vehicle that shows up for repairs.
Colour Tinting 4% of shops charged for color tinting. This is a hard call on this job but if you have a nasty color ADP suggests anywhere from .1 to 1.0 should be allowed with .5 being the average. Spray out cards would easily show this to the insurance company appraiser.
Spot Painting Amazingly, 16% of shops elected to "spot paint" this repair by putting a rolled edge on the body line and they cut back their paint time! I find this perplexing because they have just nullified any paint manufacturer’s warranty and they have done a much more complex repair than simply applying color and clearing the entire panel--a higher skill set is required to do this job for less money?
Trim 98% of the shops charged to R&I trim but 100% did not charge for all the trim that needed to be removed to make this repair invisible! I realize the photos in the magazine did not show things like the roof moulding, the running board or the emblem at the front of the panel so these I can understand. Most shops did not take the fuel door off even though it is in plain view.
Respondents 54% of the respondents were independent shops, 22% were dealer shops and 24% were network shops.
Estimating System 60% of the shops used Mitchell’s Ultramate and 40% used ADP’s estimating system.
Administrative Time Not even one shop billed for administrative time. With all the extra reporting, computer programs and electronic data transfer this is quickly becoming a major cost for collision facilities--at our shop we spend in excess of $1000/mo for management and estimating software.

Statistics show the average admin time per RO is now in excess of 5.0 hours and most small shop owners work late evenings and weekends to keep on top of this (I received several estimates well after shop closing time). Isn't it reasonable for shops to start charging a flat fee for admin work? Independent appraisers already do, why can’t we? Is $100 per RO unreasonable?

I took the average labour and material rates from all of the estimates then I used all the best practices recommended by ADP, Mitchell, ASA and the facilities that responded to this survey and did what I believe to be a very realistic estimate on this repair.

The bottom line was $1676 (see below).

Next I took some advice from the folks at ADP--in their P-Pages they state that roughly 15% of jobs have to be either partially or completely re-done. Some of these re-dos are technician error and some are environmental. With this in mind I upped the labour and material rates by 15 per cent and re-calculated my original estimate. My new total: $1906! Almost $1000 more than our average estimate! (And you wonder why you have trouble making money?)

(Click the play button to see both estimates, two pages each.)

There is no question in my mind that labour rates need to go up. But at the very least, facility owners and managers need to start billing for all the procedures that their technicians perform to repair customers' vehicles. You need to know and understand the procedure pages of your estimating system and you need to have the courage to stand up to the insurance companies and appraisers who refuse to pay for proper repair procedures.

Your livelihood and the image of our industry depend on it!

Additional information: Download the ASA's Refinish Procedures here

(Click play button to see all additional documents--five pages in total.)

Last Updated on Saturday, 04 September 2010 06:12
 
Restoration to Graduation PDF Print E-mail
Monday, 30 August 2010 13:44

Garry Thoms found the perfect wreck for teaching his auto body students. Five years later, his wreck is ready for the road and his pupils are ready for the real world.

It’s not hard to find the Robert L Borden Business and Technical Institute’s collision repair shop. Just follow the noise. Open its door and you’ll find a clanging beehive of high school students busy building their collision repair skills.

Nearly everything in the swarm of activity is in a perfect state of “in progress,” with one notable exception: a beautifully restored 1977 Ford F150 Ranger tucked away in the far corner. In its own way, the truck has graduated.

Five years prior, Garry Thoms, Borden’s auto body instructor, paid $400 for the classic, which he had dragged in by a tow truck: a perfect wreck.

“It came in in pieces,” said Clairmont Prince, one of Thoms’s students. “There was nothing on it. A tow truck brought it and everybody just pushed it inside. And we started working on it from scratch.”

It was a daunting project to the grade nine and 10 students who first worked on the truck. “Their advice to me when it arrived here was just call a tow truck,” Thoms said. “What was amazing was those kids with that advice were the ones who followed the truck all the way through it’s process.”

Sir Robert L Borden Business and Technical Institute is a trades-oriented high school in Scarborough, Ontario. In their first year, students get to try out six different trades to get a taste of their different options. Classes range from woodworking to baking to, of course, collision repair.

In their second year students narrow their focus to two or three areas depending on what they’ve liked and where they’ve shown aptitude. As students progress, they’ll decide on an area of focus and go out in the field as part of Borden’s mandatory co-op program.

In the classroom, by grade 11 students will have decided on a specialty. They take a double credit in their chosen field, which is when Thoms can start getting into the more difficult aspects of collision repair.

“You’re only kidding yourself if you think you’re going to turn out a mechanic or an auto body technician out of high school,” Thoms said. “But you’re giving a student a chance for a real taste of what the trade is like and then they can make a more accurate decision on if this is for them.”

For Thoms’s students working on the F150, year one consisted mostly of clearing off rust and cleaning. In the truck’s road life, it became pretty good at hiding pounds and pounds of dirt in every available crevasse, which had to be chiselled and blasted off.

“By the time they’re done that, their skill level is at a point where they can start putting in patch panels and doing a bit of welding on the truck,” Thoms said. “And once that’s done, they’re in grade 11–12. Then they’re ready for painting and so is the truck.”

The engine on the truck did run when Thoms brought it in, though just barely. There was no oil pressure and it clanged and knocked as it idled: another perfect wreck. All of which gave the school’s mechanical department a chance to hone their skills fixing, rebuilding and tweaking the Ford’s mechanical mess.

“It’s a great project for the entire school as far as transportation sector is concerned,” Thoms said.

Clairmont Prince started at Borden right about the time the truck came in. When we visited at the end of the school year he was in his senior year and had moved up to helping teach Thoms’s younger students. He saw a lot of the truck’s transformation as he made his way through secondary school.

“This truck was a mess,” Prince said. “I didn’t even want to work on it. But you know, I had to put in my time and just get it finished. ... And then you end up liking it.”

He liked it enough, in fact, to turn his skills into a career; when I talked to him last, Prince was hoping to start an apprenticeship at Heritage Ford in Scarborough this fall.

Similarly, the Ford F150 was looking at a future outside of academia. Now that all the work was done, it was looking for a driver. Thoms had listed it at $5,600 (a deal, according to the appraiser they had look at it).

For Thoms’s purposes, it’s a good truck, but it doesn’t fit his purposes any longer. It’s not a learner’s project any more—it’s road ready. “Now it needs to go,” he said. “We need another wreck in here.”

School’s out for the F150, at least until it breaks down again. In the mean time, Borden is searching for its next wreck.

Last Updated on Wednesday, 01 September 2010 15:13
 
Big hits in the big leagues PDF Print E-mail
Tuesday, 24 August 2010 15:55

Ottawa Sens grinder Matt Carkner made the shift from body work to body checks. Dennis Carkner, shop owner and hockey dad, couldn't be more proud. Neither can the local fans.

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It’s game six in the Senators vs Penguins series during the NHL playoffs. Triple overtime. Fisher rushes down the ice, puck in his control. He crosses the defence, carries it to Alfredson. With Penguins closing in he passes it to Carkner. Carkner shoots! Scores! The Sens win!

This goal, believe it or not, has roots planted firmly in collision repair.

It all starts with Dennis Carkner, owner of Fix Auto Winchester/D’s Collision Centre, and Matt Carkner’s father.

Dennis has owned his shop for 22 years now, so he knows what it’s all about. He makes sure to keep everyone and everything in line and on side, ensuring success for his business. His team at the shop is about seven strong, ranging from estimators to paint technicians, with a large family contingent. Dennis’s wife runs detailing and rentals. His sister-in-law, Bev Stewart, is responsible for the accounting. Bev was the one who first encouraged Matt to go into hockey.

Both of Dennis’s sons worked at the centre growing up. Phil Carkner went on to get a degree in dealership management. He later returned as a partner in the business.

“I was lucky and I found my way into the industry,” Dennis said. “But Phil was born into it.”

Growing up, Matt was at the shop a lot, honing his skills and developing the character ideal for making a good, solid defenceman. “Matt will tell you that he got all the rotten jobs, but really he just got the ones that he was able to do,” Dennis laughed. To be fair though, Matt was developing extremely well in his other field.

On the facility’s team, Dennis is the coach. He directs the players, monitors progress and sets goals.

“The shop has progressed due to the collaboration of different people,” he said. “It’s been hard work, especially in the beginning, but it’s definitely worth it.”

Over the years he has added more and more to his shop, bringing in computerized management and measurement systems and more technicians.

As any hockey parent knows, having a son or daughter who’s coming up in a sport makes for a demanding family schedule. Most cope with a sense of familial pride and a lot of coffee. For Dennis, however, he enjoyed it so much he never noticed extra stress at the shop. “I came from a great position with great people—I made sure I had the right people and everything I needed to do the job right.”

Matt, ever grateful of his father’s support, concurs: “It really comes down to the team and the atmosphere the coach creates,” he said. “Dad’s made sure to create a team with the best players, and ensure that he has everything he needs to do the job right.”

Last Updated on Thursday, 26 August 2010 14:06
 
Carstar's Rising Star PDF Print E-mail
Friday, 06 August 2010 14:18

Lisa Mercanti-Ladd isn't going to let anything keep her from making Carstar the best it can be

Lisa Mercanti–Ladd was born to go into the collision repair industry. Her father, Sam Mercanti, built Carstar from the ground up into the titan it is today. And Lisa’s been there every step of the way.

After finishing university, Lisa was approached by her father to work for him around the time he bought the rights to Carstar. She began by working under Larry Jefferies, Sam’s second-in-command. Even back then Lisa’s drive and ambition were evident.

“I ordered business cards that said director of customer service—so basically I promoted myself to director in the first six months.” While she eventually decided to throw the cards out, she made it clear she wasn’t going to settle on being anything but the best.

Over the years, as Carstar grew, so did Lisa’s role in the company. She is now the associate vice president of marketing and client services. She’s in charge of building the brand and providing value to insurance and franchise partners. She is also a member of Carstar’s executive group.

She’s a strong believer in teamwork and giving her staff the freedom to make decisions and be creative. “It’s empowering the team, letting them take charge and letting them think for themselves—I’m a really big believer in that because you get fresh ideas.”

Her unique approach to marketing and franchising has resulted in many successes for Carstar as a whole. Their new “Where Accidents Unhappen” campaign is a testament to Lisa’s belief in the importance of creativity.

Recently, she was on hand to accept the Canadian Franchise Association’s prestigious Award of Excellence in Franchising on behalf of Carstar. This is the first time a company from the collision repair industry has received this honour.

Lisa had to overcome many obstacles to get where she is today. Like many women in the industry, she operated behind the scenes during her early years at Carstar. When the time came for her to take centre stage at the company, she had to face some of the challenges that came with the enhanced role.

One of the hardest things for her to do was balance work and family. “It’s tough but you can do it. You have to be really organized.”

Her family philosophy is very similar to her work philosophy: you need a good team. “I have a lot of supporting people—my mother helps, my neighbours help. My husband and I have found a way to make it work so both our family and businesses thrive.

Her relationship with her father has evolved much since they began working together 15 years ago. To her, he is more than just a parent or a boss; he’s an ideal. “I look at my father as my mentor,” she said. “He’s the person I want to be like, he’s a well-respected man, he works hard, he’s smart, he gives back and can balance it all."

Lisa’s proudest moments in her career are when she sees the joy of franchisees when they accept awards at the annual conference, and when she sees the effects of the philanthropic work that Carstar does for cystic fibrosis. “I want Carstar to leave a really strong legacy for all of our family and friends and bring pride to this industry.”

For Lisa there is no such thing as “good enough.” She is driven by a keen desire to excel and to transcend the status quo. “I’m not a fan of things that are just okay and in people doing things that are just fine. I want to do things that are extraordinary.”

Last Updated on Friday, 06 August 2010 14:34
 
London calling PDF Print E-mail
Thursday, 22 July 2010 20:41

An extended report on this year's International Bodyshop Symposium in London, England


London, UK--July 22, 2010--As always, the International Bodyshop Symposium (IBIS) proved truth to the maxim “think globally, act locally.”

With a theme of standards threaded throughout the two-and-a-half day conference, speakers from across the globe discussed, debated and openly pondered the need for standards across the international collision repair community.

The purpose over the two days was to develop an economic framework for “standards” from the perspective of repairers, insurers and the OEMs.The goal was to be much more strategic in approach by bringing in outsiders to shine a light on the collision repair industry and make it relevant.

“IBIS is an enemy of mediocrity, seeking excellence and looking for standards to blaze a path,” said David Lingham in his opening address. It was a fitting introduction to former director of the World Economic Forum, Dr Frank-Jürgen Richter.

Richter says in a world perspective, Europe and North America need to re-engineer their futures using the most recent economic crises as a catalyst.

Overall, China and India are up, Russia is down and Europe and North America are out.

Despite a growing group of protectionists who want to keep emerging economies away from profits, globalization is here to stay, Richter says. According to him, there are two elements that can help the business community succeed. First, take a long-term view—realize you are in your business for the long haul. Secondly, become more engaged and create alliances by developing a business model that can adapt to combat anything that’s thrown at it.

Opening the second day of the event was Britain’s Speaker of the House John Bercow, who talked about how standards left un-monitored become nothing more than mere guidelines. He talked about the recent spending scandals among British MPs who flagrantly disregarded and abused protocol to use public money for, among other things, moat maintenance around one MP’s home. As a result of the abuses coming to light, new standards for spending have been implemented and enforcement is guaranteed not only by public scrutiny, but by legislation.

A comparison was made between the relationship between insurers and repairers who are looking to build a trust to avoid constant scrutiny throughout their relationship, which is not only costly, but it inhibits a true partnership.

“You must hear the voices of the smaller players because a standard shouldn’t be a cloak to prevent the entry of smaller players,” Bercow said. “On the other hand, you can’t deliberate forever, so you need a process to get to a conclusion. You need collaboration, but within a time frame to produce results. Otherwise, standards have to be imposed.

“In the end, self-regulation is always preferable, but it must be in your best self-interest to be held to account.”

The rules have to be explicit and they must mean the same thing for everybody.

In Germany, there are three types of networks with distinct standards. The first level is based on craft or guild association, the second is based on paint affiliation and the third is dedicated marketing groups such as parts suppliers. Of these, the paint company networks play the most important role in the transfer of knowledge and technology.

Policing standards and looking out for bad apples is handled by individual shops with strong connections to the three levels of craft guilds. All of which makes enforcing the rules easy, compared to other markets.

As one speaker put it, everyone in the German industry is a policeman. If a shop hears about a competitor who is not playing by the rules or has unqualified technicians, they complain to the local association who can—if needed—bring it to the regional, or even, national level for resolution.

In Germany a very comprehensive training path is required before technicians can work on cars. Depending on the specialty or degree of difficulty, it may take as long as three years, with the first year spent in school with a course common with mechanics.

The UK also has an interesting model for standardization. The PAS 125 Standard, introduced in 2007 by Thatcham and BSI, was developed in conjunction with input from OEMs, insurers and repairers. It has since been widely accepted. Observers attribute the success to the use of the standard by insurers to determine not only which facilities get the work, but the amounts to be paid.

“[The standard] is a result of recognizing a looming problem and turning it into a voluntary process,” said Lesley Upham, Thatcham’s communications director. “From a consumer standpoint, good standards mean good business.”

The PAS 125 standard is available to any association or government in the world to use free of charge.

In the USA, standards guidelines do exist but there is little if any power to monitor their use. Consumer advocate Jack Gillis spoke on the need for legislated regulations. In his words, “good laws make good markets.”

“The industry is self-certifying in parts and repair, and this is not working,” Gillis said. From his perspective, clearly there is a need for certification. Gillis believes this will increase the costs of proper repairs, but this is a price customers, including insurers, are willing to pay.

“We are preparing cars for their next accident and the drivers are our spouses and children. Repairs must be proper and accountable.”

In an informal show of hands, the group was vastly supportive of the need for standards. However, the issue of monitoring struck a nerve in the audience. When polled, attendees were split on the issue of legislating standards.

“In the absence of enforcement, we’re in for a long haul,” said ASA’s Denise Caspersen. However, a legislative framework is not the only way forward.

“Legislators tend to try and legislate on topics they don’t know,” Caspersen continued. “In the UK, the industry regulated itself. After all, it’s an industry problem, not a legislative problem and it’s a crapshoot when you ask politicians to put in standards.”

There are four main areas to be standardized: methods, materials, machinery and skills. It appears, however, that the problem is not in the setting of standards, but in the policing of them.

Canadians were well-represented in IBIS 2010, outnumbering representatives from many countries with far higher populations. On this front, our collision repair community demonstrates again and again just how engaged they are in the latest business managements trends and techniques.

“IBIS continues to provide strong value from a global networking point of view,” said Larry Jefferies, executive VP of CARSTAR Automotive Canada Inc. “The topic of ‘standards’ continues to be particular interest to us, as we continue to build our network in Canada,” he added.

“There continues to be strong validation from the conference on the value of having standards, both from a repair quality point of view, the ability to regulate who can repair the cars, the ability to attract quality technicians and to ensure those that comply with the standards are compensated according to the investment required to deliver the expected results in quality and the customer experience.”

CARSTAR president and CEO Sam Mercanti was similarly enthusiastic about this year’s Symposium. “IBIS, under the leadership of Chris Mann and the rest of his team, has done a lot in the past ten years to elevate our collision industry on a global base,” Mercanti said. “Knowledge is power, and knowing what was happening in other countries made CARSTAR Canada a better company.”

The last day of this year's symposium featured a keynote presentation from land speed record holder Andy Green. In September 1997 Green, an unknown Royal Air Force officer at the time, literally rocketed into the record books when he drove his Thrust SSC jet car across the Black Rock Desert, Nevada at more than 700mph. To this day he's the only person to have broken the sound barrier without leaving the ground. Green spoke on the high standards he and his team had to set and achieve in order to make their mark in the history books.

"IBIS left us all on a high with a presentation by Wing Commander Andy Green, who will be driving [his team's] Bulldog vehicle at the target speed of 1,000 miles per hour," said Advantage DataSystems president Bob Kirstiuk. "So if that doesn’t raise our conventional bar, I don’t know what else will."

See Green's driving in action in this BBC report titled "A car than faster a bullet."

A shortened version of this story originally appeared in Collision Repair magazine issue 9#3. Click here for a free subscription to the magazine.
Last Updated on Monday, 26 July 2010 13:56
 
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