FenderBender 20th Anniversary Series: David Roberts
In 1997, David M. Roberts partnered with Matt Ohrnstein to start Caliber Collision Centers. They were banking on the collision repair industry shifting toward increased consolidation.
More than two decades later, consolidation has made even more of an impact than the men ever imagined.
“We set out to change the industry, and I think the industry has changed very much along the lines of what we envisioned,” Roberts says. “But it started slower and has accelerated in the last 10 years.”
In recent years, Roberts has served as the managing director of FOCUS Investment Banking LLC. The company helps oversee mergers and acquisitions pertaining to the auto industry.
Considering Roberts’ extensive background in the world of collision repair, FenderBender sought his insight on what he feels has impacted the industry over the past two decades—as well as what he feels will shape its future.
AS TOLD TO KELLY BEATON
How does the industry today compare to what it was like 20 years ago?
Repairing vehicles is far more complicated today. And the skill level of the technicians and the managers in the industry are much higher than they were.
The relationships with insurance companies are much more important than they were. Twenty years ago, insurance companies had a large staff of field adjusters. They had to send an adjuster out to look at every car. Today, the big insurance companies seldom send an adjuster out to look at a car. They have relationships with body shops where they trust that the estimate that they’re receiving is accurate, and that they can authorize repairs more quickly. Today, some insurers have cycle times in the 4–5 day range.
The whole process is much more structured now. It relies very much on systems, and those systems, of course, engender more trust because there’s more transparency.
What has been the biggest game changer over the past 20 years?
Capital. The influx of capital into the industry allowed investments to be made in systems and scale. The scale of successful operations is large now. Today there are probably 150 multi-shop operators of consequence in the country. And most of them have enough scale to provide services that single shops cannot provide; they have call centers, for example.
Another big thing is the technology in vehicles. You can’t take a kid off the street and make him a quality technician these days. Technicians today are a whole lot more skilled; there’s no comparison. The vehicles are becoming more sophisticated. So the technicians who work on them have to be more sophisticated. These days, technicians fix things to both look right and be technologically absolutely correct.
What do shops need to do to be successful over the next 20 years?
There will be some very large consolidators, and there will be some large MSOs in various regions of the country, and the scale of operations is going to be critical.
OE certifications and training are going to be critical. And that means that the OEs and their dealers will have a lot more influence over the industry, and will set standards and requirements and control more of the flow of vehicles than perhaps they do today.
I think it’s going to be difficult for single shops to maintain their viability. Specialization will be key for single shops. If the Toyota dealership near you doesn’t have a body shop, for example, you should be very, very close to that Toyota dealer in your relationship and your training, and you can maintain your viability.
Another thing that single shops are doing, and can continue doing, is align themselves with one of the franchisors. They’re making investments that individual shops can take advantage of.
And tertiary markets are always going to remain, where single shops are going to have their best chance of surviving and thriving. What I’m talking about is markets where the consolidators may never go—like Missoula, Mont., or Coeur D’Alene, Idaho—because it’s just too far from places that they can effectively manage.
But again, that’s not going to be the thrust of the industry—the thrust of the industry is going to be consolidation and scale.