Government role in Collision Repair Industry
Not a week goes by without mention of new legislation or regulation for the collision industry. A couple of months ago you wrote about the new EPA ruling; steering is getting a lot of legal attention; and now there’s talk of the federal government getting involved in insurance. How involved should the government really be with our industry?
One thing that has made the United States great is its belief in a free enterprise system. The three branches of government are supposed to maintain laws for this market to protect consumers, businesses and other stakeholders, and by design, to allow for a fair market environment that creates competition. Without getting into current day politics, and its practices or abuses, laws historically were created to clearly establish the will of the American people.
The economic climate today has changed many business models. The concern is whether we can monitor what is “change” versus “abuse”—something that even the federal government is challenged with, thanks to globalization.
As an industry composed of collision repair facilities, insurance carriers, vendors and other stakeholders, we quickly turn to fingerpointing, rather than rolling up our sleeves and striving to resolve the issues at hand. For decades, regardless of the industry segment we represent, we have allowed economic engines to direct our course, thinking that is the best way to profitability. Direct repair programs (DRPs) were initially promoted as a way to standardize the collision industry’s offerings, including proper equipment, training and services. But by the time the final product was drafted, it leaned more toward a “what’s in it for me?” mentality rather than the excellent starting point for consumers that it was initially intended to be. As that aberration, that abuse, continues to take the industry off course, we collectively look to the government to protect both the motoring public and the free enterprise system.
Whatever work we do in the collision industry, we should never forget that proper repair is owed to the consumer regardless of cost. And when that repair work is properly done, profits will follow. The more we remember this and the better we handle our repairs, the larger our profits will be—regardless of the segment we represent.
We need look no further than our own auto history to prove this fact: General Motors had a factory in California that was the most costly to operate. The company was moving toward shutting it down. The in-house fighting that occurred between workers and the corporation allowed the troubling situation to escalate toward extinction, or to added costs being passed on to the consumer. Toyota stepped in with its management team, ran the plant as they did their own—empowering employees to do their jobs the right way—and within 16 months, the plant became the most efficient, profitable plant for General Motors.
Collision repair done the right way needs to become the standard for the industry. That can occur only when there is mutual respect between the collision repair facility, the insurance carrier and the vendor. For the sake of the customer, we need to remember the truism that actions speak louder than words. This will make our business transparent and trusted. Currently, the debate can substantiate that this approach has never existed in any DRP, as all are written to have lopsided control. Until we correct that situation, profits will remain a challenge, laws will be sought, and ultimately, consumers will be manipulated.
Ray Fisher is the president of ASA-Michigan. This article represents his opinion and does not reflect the views of ASA-Michigan.