All posts filed under “Progress

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The Move to Safe Repairs – Still No Leader

In 2016 there was a 5 year time frame suggested for the changes the industry needed to make to be repairing cars properly. If these changes were not made there could very well be a real crisis in the industry.

In 2021 these changes have not been made, but the crisis has not yet arrived. This does not mean that the 2016 prediction was wrong just that it was off by a year or two. So far, we are still getting away with clean and shiny cars after a repair.

The consumer continues to be busy with all the other concerns in his or her life (in most cases of more immediate urgency) and as a result there has been minimal engagement on the part of the car owning public. In this vacuum the major players in the repair industry are continuing to compete and protect their own positions; they have not yet reached a significant level of collaboration.

It is starting to look like it will be the vehicle manufacturers who will take the lead in educating the vehicle owner about safe repairs and in this they are faced with at least three significant challenges.

The obvious one is working with insurance companies to come to an understanding of safe repairs.

The next is working with their contracted independent dealers to send a unified message. This is not as simple as telling them what is needed. The culture of car dealerships is as older than that of the repair industry and it will take more than a memo to achieve real changes.

The third challenge is also a tough one. Too many of their requirements appear to be driven by their marketing and legal departments rather than safety motivated. They are not providing a functional service if they present economically unrealistic procedures into their repair procedures and then wash their hands of any further responsibility.

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Not Accepted through to Accepted and then to Expected

As vehicles get more and more complex there are a growing number of situations   that are not covered by the rules or standards used by repairers and insurance companies. The first reaction to one of these new situations is that it is a Not Accepted procedure and will not be paid.

But the procedure is needed so what happens?

An intelligent, researched explanation on why a procedure is needed, backed by a reputation for integrity and honesty will, with some repetition, move the procedure from Not Accepted toward Accepted.  With each Acceptance, less explanation is needed and at some point, the procedure becomes Expected, and no explanation is needed.

The work to move a procedure from Not Accepted to Accepted is time consuming and relatively thankless and is done by progressive operators who have an interest in keeping the safety standards of industry moving forward to keep up with vehicle changes.  There is no financial gain to that operator during the move toward Accepted.

As time goes on the direction taken is seen by the broader industry as the correct one. With this understanding there is a general movement toward the better and more rigorous procedures, and they become Expected. There is some return here for the progressive operators, as the lessons learned in the early stages allow them to work efficiently with these procedures, which for them are not new.

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The Present and the Future

By 2016 it was becoming clear to progressive repairers that cars were changing rapidly, and correct repairs would require good current equipment, well trained staff and disciplined adherence to correct, vehicle specific repair procedures.

These progressive repairers were making significant investments in equipment and training in order to be able repair vehicles properly then and in the future. This made business life more complicated and less short term profitable, with the expectation that there would be long term survival and profit.

Many others have followed this model, but a significant majority of the repair industry just kept ‘repairing’ cars with few changes from 5 or 10 years before. The cars were going out the door, the insurance company was not being asked to pay for sophisticated repairs and nobody had to think outside of yesterday’s box.

Where is the Repair Industry Now?

In 2021 the progressive repairers are ready for a future of correct repairs. Many other operators are hoping it will not arrive.

Here are a few observations from Canada.

In Saskatchewan SGI wants cars to be repaired better and operators will have to show that they have the right equipment to do the repairs. In January of 2020 they were told they would have to have some key pieces of equipment by March 2021. And if they don’t, they will still be allowed to repair cars for SGI, they just won’t get paid as much.

ICBC in BC has a new collision repair program to encourage operators to become properly equipped and trained. One equipment supplier asked me how often we use our electronic measuring equipment (we have had it for over 12 years and use it many times each week) as he had customers asking him why they would need to buy that equipment just so it could gather dust in the corner. Or the other one telling him that he didn’t need a resistance spot welder (which is the only equipment that can be used to weld light weight high strength steel properly) because his technicians could weld anything they came across now with the equipment they had.

A young estimator was at a job interview in 2019 and asked the operator how they accessed the correct repair procedure was told ‘We don’t do any of that. Cars are easy to fix, and we know how.’

In America, Jeff Peevey, a knowledgeable industry participant talked about being underwater at a presentation in early 2020. His point was that what had been described as a tsunami of change a few years ago was in fact not a tsunami, it was a sea level change, and most repairers are still on the old beach, underwater.

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Dornbusch’s Law

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. 

In the fall of 2019 I happened across a New York Times article written by Al Gore. In this article he used a theme or maxim called Dornbusch’s Law in the context of climate change

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.” 

It is not a rigorous statement and there are many similar versions, all called ‘Dornbusch’s law.

One of the clearest is; 

“Crises take longer to arrive than you can possibly imagine, but when they do come, they happen faster than you can possibly imagine”.

Rudi Dornbusch was referring to international macro-economic crises, but it applies more broadly. Al Gore was correct to use it in reference to climate change and it is equally valid in the current world of automotive collision repair.