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Trump, Congress Agree on New Stimulus Package by Dan McCaleb, The Center Square
President Donald Trump and congressional leaders have agreed on a new, nearly $500 billion stimulus package to help small businesses im-
pacted by stay-at-home orders in response to the COVID-19 pandemic. The $484 billion deal includes $310 billion for the Paycheck Protection Program so businesses can continue paying employees. It also includes an additional $60 billion for a small business emergency grant and loan program, $75 billion for hospitals and $25 billion for a new coronavirus testing program. “I urge the Senate and House to pass the Paycheck Protection Program and Health Care Enhancement Act with additional funding for PPP, Hospitals, and Testing,” Trump wrote See New Stimulus Package, Page 10
The Pandemic Has Led My Profit to Drop How Much? by Kent Carlson
The ongoing pandemic and the measures being taken to stem its advance are playing havoc with the economy here and around the world. With collision centers facing a period of reduced sales, some collision center owners may be wondering how this will impact their profitability. Let’s figure that out. XYZ Collision Center normally has sales of $100,000 per month with a gross profit margin of 40% and overhead expenses totaling $30,000 per month. A summary profit and loss statement for
this company would look like the following.
Table 1
We know we have sales of $100,000 in a normal month. We also know gross profit is equal to the gross profit margin times sales, or $40,000. See Drop How Much? Page 16
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AUTOBODYNEWS.COM Vol. 38 / Issue 5 / May 2020
CA, OR, WA Do Not Have a Target Date for Reopening Economies At a news conference April 22, California Gov. Gavin Newsom said there is no target date to lift the stayat-home orders in California, Oregon and Washington. The three states formed a pact April 13 to work together to reopen their states’ economies and control the spread of COVID-19. The only specific step Newsom brought up at the April 22 news conference was allowing elective surgeries to resume, though there is not a set date for that yet either. Non-critical surgeries were banned in March to maintain enough
open hospital beds to treat an expected rise in coronavirus patients. The three states have since created enough capacity to treat COVID-19 patients and others, Newsom said. Newsom said testing needs to be ramped up considerably before officials can confidently lift stay-at-home orders. Currently, about 16,000 people a day are tested in California. The goal is to test 25,000 per day by the end of April, and 60,000 to 80,000 per day in the near future. Newsom said President Donald See No Target Date, Page 3
Most Shops Weathering The Storm – So Far by Gary Ledoux
On April 17, 18, and 19, Autobody News used its 19,000 shop email subscribers and also social media channels to conduct a survey of collision shops across the country to see how they were coping with the COVID 19 pandemic. The majority of shops responding were independently owned singe-point shops, those perhaps the most vulnerable to volatile market swings. Despite that, and a wide range of available work, (most shops operating at 25% to 75% capacity) most seem to be faring reasonably well. The majority of shops (59%) have not laid off any workers although 21% have laid off three-quarters of their people. Most shops have taken a number of precautions to protect employees and customers including use of gloves and masks, frequent hand-washing, etc. It is surmised that not many shops think the pandemic situation will last very long because only 19% have taken on work other than traditional collision repair.
The majority of shops have applied for financial assistance through the government’s CARES Act but have not received their funds yet. The sad truth is, those funds may never come because as of this writing, the funds have been exhausted. There are, however, other measures being debated to replenish the program (see related stories.) Wayne Stevens, owner of Stevens Collision in western New York is a single-point shop, certified with FCA, Hyundai, and Kia but with no DRP arrangements. At present he hasn’t laid-off any employees because he has a two-week backlog of work. He says, “My father always told me, ‘Take care of the people that come through your door, no matter what they want, and you’ll build your business.’” Doug Hassell owns Hassell Auto Body on Long Island in New York, another single-point shop that has been in business since 1963, and has enough work to stay busy—so far. The shop has no DRP arrangements and no dealer relationships although they See Body Shop Survey, Page 18
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