Collision repair businesses report dismal start to 2021
BY MAX REID
Since February 2020, 71.5 percent of collision businesses have laid off staff members.
If your business experienced a grim start to 2021, you’re far from alone. According to Collision Repair magazine’s recent survey results, 73.4 percent of respondents say their collision repair businesses are reporting decreased performances for January 2021, compared to the year prior. Overall, 85.7 percent of respondents are reporting annual decreases for 2020 versus 2019.
Approximately eight percent of shops performed better in 2020 than in 2019, while six percent reported the same performance both years.
The dismal performance—spurred by COVID-19 restrictions, low traffic and better-than-average winter weather in some locales—has forced business owners nationwide to make some tough cuts.
Since February 2020, 71.5 percent of collision businesses have laid off staff members. About 23 percent have laid off between 20 percent and 30 percent of their workforce, while 14.3 percent have laid off between 30 percent and 50 percent of staff. Nine percent have let more than half their team go since the pandemic hit nearly a year ago. “One tech decided to leave the trade altogether,” said one Collision Repair reader.
“Our owners didn’t take a wage last year,” wrote another. Several collision repairers are blaming insurers for not giving way amid the global crisis.
“The insurance companies seem to really be cracking down and cutting appraisals apart,” wrote a respondent. “Some companies are estimate staples and cutting times by 0.5 hours or one hour. It’s really a shame—huge companies are profiting through lack of care on the road while trying to squeeze the shops.”
“Private insurance companies in Canada are taking advantage of the shops in a vulnerable situation,” chimed another. “Implementing parts rebates and material caps, along with rebate increases and labour rate decreases is terrible.”
Others put their statements more bluntly. “It’s time for insurance companies to pay a realistic rate.” “Shops must receive increased rates to invest resources to be viable in the future.”
Seventy-four percent of collision repair businesses are receiving financial assistance such as the Canadian Emergency Wage Subsidy, according to the survey results. Regardless, some say they’ve even been unable to qualify for financial subsidies amid hardship.
“I was out 0.75 percent [to qualify] for any subsidy.” After almost a year of COVID-19 restrictions, recovery remains slow. Facilities are continuing to focus on slimming- down processes, boosting efficiency, innovating and technician training, but options are wearing thin.
One reader says there’s just one thing the industry needs now. “Help.”