"It's a profit source,"says owner Jim Marsh. "In a slow economy, we'd have big problems on our hands if we didn't have a strong back-end operation, including the body shop. We're not dependent on the fortunes of the manufacturer. It's a hedge against the ups and downs of the franchise new car business." The collision repair business also brings in new prospects for Marsh's new and used car business, as some people decide to replace their car after an accident.
So why don't more car dealers have their own collision repair business? "It's difficult to compete zoning-wise and investment-wise," comments Marsh.
When we initially talked to Marsh for this story, he was in the process of building a new larger body shop on land adjacent to his dealership that is part of a large parcel he purchased several years earlier when he built a new facility for his dealership business."We're fortunate enough to have bought enough land at that time," notes Marsh. "You couldn't do this feasibly in today's market."
Marsh opened his first dealership in Las Vegas in 1971. "We've had a body shop on the premises since the day we opened," notes Marsh. "Initially we had an eight- or ten-bay shop, and we had a paint booth with more holes than Swiss cheese."
The body shop was profitable from the day it opened, Marsh says — and over the years, he has not hesitated to re-invest those profits in upgrades.
"We have the most advanced equipment that there is on the market," notes Jerry Bailey, body shop manager at Jim Marsh Chrysler Jeep. "We have a lot of things that nobody has in town. We were first to have a state-of-the-art laser measurement system, which is accurate to within two millimeters of factory specs. And the new body shop [has] an automated pulling system embedded in the floor that [is] the largest installation of that type of equipment in the world."
The new body shop has nearly 44,000 square feet — a substantial increase over the 11,000 square feet in the previous body shop. It has a total of 78 bays, including four downdraft paint booths and five prep stations, as well as its own mechanical and parts departments.
Marsh and his managers don't seem concerned about generating enough business to cover the nine to 10 million-dollar cost of the new space, however. "We have more work now than we can do," says Marsh.
In planning the new body shop, Marsh and his managers shared a concept drawing with employees and encouraged feedback. "We got good suggestions from car washers, technicians and others," notes Zip Bauck, service manager for the dealership, who oversaw the body shop construction project. "When you do a building of this magnitude, the more change orders you put through, the more it adds to your cost. We tried our best to make sure we had everything laid out as well as possible."
"The design is pretty practical," adds Marsh. "Some shops have wasted space for aisles and hallways. We've eliminated as much waste as we can. Of 43,000 square feet, a good 34,000 feet is pure production. We have one 10-by-150 foot aisle for delivering parts to body shop technicians and everything else is productive."
The new shop design also incorporates features aimed at minimizing energy consumption and making the shop a more pleasant place to work. For example, it has sky-lights with mirrors that change position throughout the day to maximize the amount of natural light that enters the shop. "Getting more natural light gains a lot of tranquility," notes Bauck. "Employees don't feel like they're boxed in. They can look out and see what's going on."
The shop still needs some artificial light, of course — and this is carefully placed. "Lighting is designed to go around the vehicle rather than over the top," explains Bauck. "That gives technicians better lighting, especially during the winter months."
Only about 20 percent of the bodywork at Jim Marsh Chrysler Jeep comes from customers of the dealership. The rest comes from other dealerships and from DRPs. By using computer-based information/educational tools, Bailey says, "We can work on any vehicle out there."
As for the DRPs, Bailey says, "Our first priority is the customer, and all the insurance companies I deal with have the same philosophy. It costs more money to get a new customer than to make one happy in the first place."
The body shop uses a research firm to survey custo-mers about their satisfaction level, which runs around 97 percent. Word-of-mouth also seems to be very good. "We have a reputation of doing quality work and insurance companies sooner or later seek that out," says Bailey.
Now that they're in the new building, there are a lot of new employees. To help ensure that new employees uphold the company's high standards, the body shop has written procedures, such as how to manage a customer's car keys, which are given to new employees to follow. "We keep them in the computer so we can reprint them," notes Bailey. "People know exactly what's expected of them and what their responsibilities are."
Like many successful body shops, Jim Marsh has very low employee turnover. "Technicians know we're a good organization, so they flock to us," comments Bailey.
Technicians are paid per labor hour, which gives them the incentive to be more productive. Quality is not sacrificed for speed, however. "We have three quality control checks," Bailey says. "The cleanup crew checks the vehicle over as it comes by. The dispatcher looks at it after that. And then the appraiser does the final inspection and looks it over for the third time before it is delivered to the customer."
The company also has added an extra level of convenience for customers now that the new body shop is opened, as it has a car rental company on site. With all the new space to work in, management also is considering getting into the paintless dent repair business. There also is more room in the main dealership building since the body shop had moved out — and now the company is planning to begin selling vehicles from some additional manufacturers.
