(application program interfaces), and how software components and computers interact, it’s all becoming more integrated, leading to efficiencies for the industry. At Cyncast, we built the first Estimate Management Standard (EMS) data pump. EMS was created through CIECA and we used this standard to build the first EMS pump, replicating all information automatically from remote estimating systems. In the 1990s, we created the first Customer Satisfaction Index (CSI) system in the Collision Repair Management System (CRMS) so shops could share data. We also built many web-based claims tools to be used by shops. Shelly: Another concern for shops is the technology in vehicles today. Vehicles may have technical changes from one year to the next. Technicians may think they know how to repair them, but it’s essential they look up and be well-versed in OEM procedures.
Q:
What are some of the challenges and growth opportuni-
ties in the industry? Erick: Entrepreneurs are very proud, and at the same time, they are stubborn. In the late ‘80s and early ‘90s, we watched the transition from adjusted claims to DRPs. At that time, there were highly respected industry leaders who dug in their heels, telling other shop owners not to participate in a DRP. We, on the other hand, saw the value and opportunity and leveraged significant growth from these new relationships. Early on, we worked with insurers to help develop their DRP programs. I’m finding that a similar situation is happening right now in regard to OEM certifications. We’ve been talking about OEM certifications within our Fix Auto franchise network, and we strongly feel that shops have to be certified. At the same time, we see people digging their heels in, even at our own shops asking, “What is the ROI?” Shelly and I decided to move ahead with certification, knowing that it would pay off in the future. Some shop owners don’t think it’s important to be certified with all makes and models of vehicles, but what they
SEMA Supports Legislation to Forgive All PPP Loans Less Than $150,000 SEMA joined with dozens of other trade associations in urging the U.S. Congress to pass legislation to forgive all PPP loans that are less than $150,000. The groups sent a letter to leaders of the House and Senate Small Business Committees requesting immediate passage of “The Paycheck Protection Program Small Business Forgiveness Act” (S. 4117). To date, more than 85% of the PPP loans provided to small businesses are less than $150,000. Under the current program, the loan has restrictions on how monies are spent, including a requirement that 60% be spent on payroll cost, and company officials must then spend
many hours completing paperwork to document the spending. The proposed legislation would instead simply require borrowers to submit a one-page forgiveness document. The U.S. Congress is expected to consider another COVID-19 stimulus package later in July. SEMA is urging that the PPP loan forgiveness legislation be enacted at that time, either as a stand-alone bill or as part of the stimulus package. For more information, contact Stuart Gosswein at stuartg@sema.org. We thank SEMA for reprint permission.
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don’t understand is that the first level of change will be filters on First Notice of Loss (FNOL.) As an example, that means if you aren’t certified with Nissan, you aren’t going to be repairing Nissans. Shelly: Vehicle technology is advancing rapidly. First and foremost, we need to repair cars correctly according to OEM procedures and ensure we put people back in a safe vehicle. I hope and pray for and believe that OEMs, insurers and body shops will be completely aligned in the correct repairs of vehicles. We’re starting to see that now with insurers directing work to those shops that have OEM certifications; that’s a great thing.
Q:
What are some of the effects of COVID-19 on the collision repair industry? Shelly: I think reacting quickly to COVID-19 and making changes was really important. However, I think we’ll see shops go out of business, whether that’s consolidators deciding to close locations or independents who can’t make it through. Even if
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Serve Through Pandemic An unidentified parts manager from an East Coast Toyota dealership said, “We will see a new way of doing business; COD only—no charges.” Finally, an Acura parts manager said the last four months had really “put the icing on the cake.” He noted that paying for such computer programs such as CCC, Parts Trader and OPS Trax have added thousands of dollars per month to their operating costs. That, combined with other wholesale costs and a steep downturn in business, has simply made the wholesale business untenable. But rising wholesale business costs and declining profits for dealers has been an issue for 40 years or more. Fortunately for the collision and mechanical repair shops, auto dealers, being as creative and resilient as they are, always seem to find a way to mitigate these business issues and keep serving the automotive aftermarket repair industry.
they reacted quickly, we’re going through something very significant. In a very short period of time, some shop owners have lost 50% of their business in weeks. Erick: I think it’s all about how shops respond when coming back to the new market. No doubt, it’s going to be very different than what we experienced before. As a result of the pandemic, we took out the duplication in our business and created efficiencies, but unfortunately, we had to lay off 55% of staff. We learned how to do things differently out of necessity and shame on us if we don’t come back differently and go back to doing things the same way. Smart operators are going to take what they’ve learned from this situation and develop a different structure for their businesses. Those who don’t adjust to the business climate are not going to be competitive.
Q:
What do you think the future holds for collision repairers?
Erick: One of the things that our expeSee Erick and Shelly Bickett, Page 47
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