Monthly archives of “November 2020

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Losing Ground and Dornbusch’s Law

The first posts to RFINA were made in 2015, focusing on the level of technological change we would see in vehicles in the next 5 years and what the industry may have to do to prepare for these changes. The suggestion at that time was that the greatest obstacle to making these changes was the industry culture that had been built up in the previous 50 years of not very much change.

Now, five years later, after a few days of webinars and videos at SEMA360 it appears that not only has the collective industry not made the changes needed but has lost ground. The industry made some moves in the right direction, but technology moved much faster and the manufacturers have been unable to bring repairers and insurers along. We are farther behind than we were 5 years ago.                                 

  • In 2021 mainstream vehicles will have electronics, for example hands off highway driving capabilities, well beyond anything we have seen before in these vehicles. Meanwhile, insurers and repairers are still talking about Pre and Post Scans and are they really needed.
  • The types of materials used and the number of different materials in a single vehicle continues to grow steadily. Meanwhile, repairers are upset at having to buy something as basic as a spot welder because ‘it will just sit in the corner.’
  • Manufacturers are showing significant lists of components that need to be checked after an accident and then standing back as repairers and insurers either argue about these checklists or simply ignore them.
  • I-CAR redesigned their courses along with slightly more rigorous requirements for their Gold and Platinum levels while providing a two-year lead time to adjust to these requirements. Repairers responded by ignoring the changes for most of the two years and then complaining that it was too expensive and too hard to get their techs to take these courses. Certification organizations responded by diluting their training standards.

Economists recognize that there is a lot more to finance than just numbers and many of their principles apply to a very broad range of circumstances and behaviour.   

Rudi Dornbusch was an economist who worked at several prestigious American universities from the 70s to the early 2000s. Students of international macroeconomics are fond of quoting “Dornbusch’s Law.” 

“The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.”

He could have been talking about the 2020 collision repair industry when he wrote this.