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Doubling Production with a Renovation

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The situation at the Diehl Automotive Group collision repair center was dire: The paint shop was so small customers had to be turned away when business backed up. Technicians could paint only one car at a time, and they lost precious time juggling four and five vehicles when one was ready to move to another station.

Operations in the body shop were inefficient, to say the least, and it sometimes took more than a week to finish a job. That didn’t make customers too happy, even though they liked the quality of Diehl’s work.

Owner Matt Diehl planned to expand the collision center at his Butler, Pa., dealership—and he even had blueprints drawn up for that about five years ago. But the project never got off the ground.

Then Diehl, 47, died unexpectedly in March 2007 from a massive stroke, leaving the company in the hands of his wife, Corina.

HEARTBROKEN, BUT "ALL IN"

Though Corina Diehl had a business background, she never had run a dealership. She coped with the grief of her husband’s death while learning the business. Eventually, she embraced an aggressive approach to generating growth. She decided to go all in for a $1 million expansion that transformed Diehl’s collision center and added nearly 5,000 square feet to the business.

Despite the recession and its debilitating impact on the automotive industry, Diehl knew she needed to take a risk in order to grow. It also was time for a new beginning under her management. “I sat in this chair and saw our backlog,” she says. “We were backing so far up it was crazy.” So she made good on her husband’s plans to expand the shop.

Diehl was able to secure inexpensive capital by refinancing the dealership’s 8-acre property. Then she got bids, negotiated them ruthlessly, and kicked off the expansion in time for a grand opening in September 2009. She felt confident, but it was still scary to take the leap amid the dire economic times.

“I looked at it as a profit builder. You have to take a risk to grow and make money,” Diehl says. “Now I’m banking on that expansion. With the downfall of so many dealerships—as sad as it is for me—it enables me to have their work. And now we can handle it.”

With the collision center addition Diehl Automotive reduced cycle time by half, and without needing to hire additional employees. The body shop had handled about four cars a day from its lone spray booth, one prep station and 12 work bays. Now it takes on 10 vehicles a day thanks to two new paint booths, two additional prep stations and 10 new work bays. All of this extra workspace gave Diehl’s business a jump start—and a fresh start, too.

THE NUTS AND BOLTS

The Diehls’ bought the dealership in 1995 with fellow dealer Bob Preston, acquiring its Chrysler-Dodge-Jeep and Toyota-Scion lines, as well as a service department, a rental car business and the collision center. They bought out Preston in 2002. Matt Diehl had worked in the auto industry for years, previously serving as general manager of a dealership in New Castle, Pa. Corina Diehl ran a home-based leasing company that sold 100 cars a month to customers in Germany. In the years leading up to her husband’s untimely death, she handled the homefront and the couple’s two teenagers, helping occasionally at the dealership.

Located in suburban Pittsburgh where deer abound and cause many accidents, Diehl’s collision center gets 97 percent of its work from direct repair programs. The shop serves as a preferred body shop for 15 major insurance companies, taking on all makes and models, explains Tony Oliva, body shop director.

Oliva, who has worked in body shops since he was 13, followed Matt Diehl from his New Castle dealership to Butler, and has been with the collision center ever since. Rising over the years from technician to body shop director, Oliva played a key role in making the addition happen, meeting with Corina Diehl and suppliers to plan the details.

As part of its expansion to 14,000 square feet, Diehl Automotive upgraded and expanded its equipment, adding:
• Two energy-efficient GFS Spray Booths with AdvanceCure Accelerated Airflow Systems.
• One Ultra ATP downdraft bake spray booth for mid- to large-size trucks, vans, RVs and other commercial vehicles, and one Ultra Plus 1 downdraft bake spray booth. (Both provide faster drying times and low energy consumption.)
• One four-stall ECO Universal Workstation and Closed-Top Open-Front prep and paint booth. The high-tech work areas use efficient downdraft bake technology that allows for quick turnaround.
• One Eco Dual-Skin Ultra Mix Paint Room.
• A computerized paint mixing system.
• Devilbiss CVi Waterborne trans-tech high-efficiency Gravity Guns.
• Chisum frame anchoring tower with Allvis computerized measuring system.

Construction took three months, and the process was quite seamless, Oliva says. Construction workers created the addition at the back of the collision center while body shop technicians focused on the cars in for repair.

PAINTING A GREENER PICTURE

During this time, Diehl’s made a significant transformation of another kind by switching to water-based paints. PPG walked Diehl Automotive through the process with its standard conversion plan. Oliva says the supplier made it easy by helping Diehl’s identify its equipment requirements, perform on-site technician training, and develop marketing strategies.

Not only is the conversion to more eco-friendly paints an asset for marketing, it has rejuvenated the atmosphere on the shop floor. “You really notice a difference in the air quality,” Oliva says. “It’s a better color match and it’s safer to use. It makes the job much easier for the painter.”

Parts Manager Rick Schantz, who has been with Diehl’s for seven years, thinks the earth-friendly aspects of the addition will help drive fresh business to the shop. “It’s going to help the environment to use waterbased paint instead of the chemicals we used before,” he says. “A lot of [customers] are looking to go green, and we went green. So hopefully they will want to come our way for that reason.”
Diehl Automotive also tapped into relationships with Autobody Products Inc. to get good prices on top new tools and equipment, and it teamed with Booth Concepts Inc. to bring high-performance paint booth technology into the shop, Oliva says.

“The spray booths are phenomenal, just state-of-the-art,” says Oliva. “We’ve got a great crew, and we fix cars the way they are supposed to be fixed. Before, when we had the old system, we had to work a little harder at it.”

Oliva’s favorite new feature? The paint room, located between two spray booths. Before, the spray booth was located in one corner of the body shop and the mixing room was clear on the other side. Technicians wasted a lot of time going from one end of the shop to the other. Now there is a paint mixing room located between the spray booths.

Diehl’s also wanted to make customers feel at home, so the expansion included a total makeover of the dealership’s waiting room and offices. They incorporated more comfortable furniture for the guests and staff, new workstations, and features to make the facility more handicapped accessible.

NIGHT AND DAY CHANGE

Corina Diehl sees a huge difference between the old work space and the new, especially the addition’s much-improved lighting and top-of-the-line equipment. Now she is updating the lighting and paint in the original shop to give that space its own transformation. “We did everything the right way. Matt taught me a long time ago that if you’re not going to do it right, just don’t do it,” she says. “It’s beautiful.”
Oliva can tell the addition has helped the shop vastly improve its workflow (see our Idea Shop story on shop workflow). “Just the added space makes everything so much easier,” he says. “We used to have to juggle cars like crazy, move this and move that. Now everything is much easier. It’s good for productivity.”

Not only would the expanded shop impress and please Matt, he would also enjoy Diehl’s projections for its bottom line: ultimately increasing gross revenues, says Corina Diehl.

In addition to the streamlined operations, the dealership is prospering from new business. Thanks to the bumper-to-bumper makeover, Diehl is successfully pitching her shop to other dealers who subcontract their collision work, highlighting Diehl’s new waterbased paint system and the expanded workspace.

After this fresh start, Diehl is even more bullish on the future, notably because the shop has gotten increasingly productive—completing jobs that normally take three days in one-and-a-half. The increased productivity stems from the new paint booths, prep station, additional bays and a more spacious and efficient shop layout. “We’re not making tons of money on the front end. It’s the reality of where the car business is growing,” she says. “But the body shop feeds the parts and service department. I can already see how it’s going to pay off.”

Suzy Frisch is a Minneapolis-based freelance writer.
 

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