As shop owners, managers, technicians or repair planners, we’re all busy, yet there’s a lot to be said for our ability to gather together as an industry, as a community of collision repair professionals, to learn more about our businesses and how to do the best job we can for our customers. That’s one of the most important benefits that associations like AASP/MA offer its members!
Creating opportunities for shop owners across the Commonwealth to share knowledge is vital to strengthening all of our businesses, and that’s why the “Alliance” reinstated its chapter meetings in April and May, with Executive Director Lucky Papageorg traveling to the North Shore, Holyoke, Boston and Worcester. This was a great chance for comradery and interactions between both members and non-members…and one out of every 15 new members that decided to join up (as well as shops that referred them) have a shot at receiving a free one-year subscription to National AutoBody Research’s (NABR) Billable Genie program via a raffle AASP/MA is conducting (a $1,200 value). The winner will have access to all the NABR labor rate tools that assist shops in maximizing their profitability.
Our chapter meetings saw really good turnouts, and everyone who attended brought a lot of great energy. It was exciting to just return to that in-person format and be able to talk to each other face to face once again, and for AASP/MA leadership, it was inspiring to see everyone else get fired up for the cause. Knowing that so many shops are ready to join the fight really helps motivate us to keep pushing forward, and the information shared empowers
everyone present, so if you weren’t there, you definitely missed out. Make sure you’re keeping an eye out for the next round of local chapter meetings.
In the meantime, make sure you’re registered for AASP/MA’s upcoming General Membership Meeting, scheduled for Saturday, June 17 and featuring Kristen Felder of Collision Hub. She’s a dynamic presenter who really knows her stuff, and she’s going to be bringing all sorts of knowledge that you don’t want to miss out on! We all know how important our documentation is – from work authorization files to total loss paperwork, we want to have everything wrapped up in a nice neat package and tied with a bow. And that pretty little package needs to be updated on a regular basis, but hiring a lawyer is expensive…a lot more expensive than signing up for this class where you’ll get access to documents and forms that have been tested all across the country.
When we learn more, we do better – and that’s certainly going to help your shop AND our industry in the future. Protect yourself by improving your knowledge in these matters and getting a chance to ask questions of one of the most knowledgeable industry professionals around.
Register now for the June 17 meeting, or stay up-to-date on upcoming events by visiting aaspma.org/events
AASP/MA PRESIDENT KEVIN GALLERANI is president of Cape Auto Collision Center in Plymouth, MA. He can be reached at (508) 747-0316 or kevin@capeautobody.com.
ZONE
Dean Luther
Jeff
Affiliate
Simon Frietas
Jayce Mitchell
Gregg Tanguay
Scott Varney
KEVIN GALLERANI
Membership Application 2023-2024
P.O. BOX 850210
Braintree, MA 02185
Phone: 617-574-0741
Fax: 973-235-1963
Email: admin@aaspma.org
Please complete this form and return to our office via mail, email or fax with your dues payment. Thank You!
As a member in good standing, your shop WILL BE listed on our website Click here � if you do not want your shop listed on our website map for potential customers to find you. If you have any questions about this benefit, call (617) 574-0741, ext. 1.
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PLEASE ENCLOSE PAYMENT WITH YOUR MEMBERSHIP APPLICATION
Check# : _______________ (IF collision shop please note your RS# on the memo line of the check) OR CC #: ______________ EXP: ________/___________ CID: _________________
Name On Card: _____________________________________________ Signature: _____
Check here � to opt out of auto renewal using this credit card information for future renewal
Note: A 4 percent convenience fee will be charged for membership renewal via credit card transaction
I hereby make this application for membership with the Alliance of Automotive Service Providers of MA (AASP/ MA) for membership dues 2023-2024 as provided for in this contract.
*Membership Dues are for a twelve-month period commencing on your anniversary month of membership.
Intestinal Fortitude
“Intestinal Fortitude” means to have the “GUTS” to do something difficult and then stick to your decision and not succumb to outside forces trying to dissuade you. “Intestinal Fortitude” as defined by the Oxford Learner’s Dictionaries reads: "noun. (formal or humorous) the courage and determination necessary to do something difficult or unpleasant (used when you want to avoid using the word guts). He did not have the intestinal fortitude to implement the changes.”
With regard to the collision repair industry, it is refreshing to see that more and more shops are showing the true meaning of “Intestinal Fortitude” and are thereby reaping the benefits. These shops are turning a deaf ear to the “it will never work” mantra of the past. They are also refusing to buy into Chicken Little’s cry of “the sky is falling” when things get a little tough. The new mantra of “Breaking free in ‘23” has taken a strong foothold and shows no signs of weakening. Those shops that have decided they are truly independent and that recognize who their true customers are indeed in business to thrive and not just survive!
What sets these shops apart from the rest? They have been paying attention to what is going on all around them regarding other independent businesses. They understand the relationship between themselves and their customers versus the role that insurance policies and insurance companies play in the collision repair process. Shops understand that being well equipped and trained to perform proper and safe repairs have significant costs associated with it. They understand that in order to return a vehicle to an owner, which is safe for them to operate and also to share the roads with other motorists, is a HUGE responsibility and liability. It is not a liability to be taken lightly, especially in the current litigious environment. One bad or incomplete repair can cost not only someone’s life but could potentially put a shop out of business. The shops that have grasped these facts have also learned that to guarantee excellent work and accept the liability for the work they have performed, SOMEONE must pay!
This is where the true essence of “Intestinal Fortitude” meets its test. Currently, these shops are in the minority; however, the number in the minority is growing on a daily basis. One reason for the growth is that there are fewer and fewer shops that can “BULLSHIT” their way through the needed repairs required on today’s vehicles. Shops that could at one time get away with acceptable cosmetic repairs are being held to a much higher standard because of today’s technologically advanced vehicles. ADAS and the need for proper calibrations post-repair are the
death knell for any shop not willing to keep up with technology and charge for the repairs needed.
Properly equipped and trained shops are pushing back. They are no longer allowing insurers to skirt their responsibility in the collision repair process. No longer are these shops allowing insurers to avoid the responsibility of paying for safe repairs. How, you may ask once more? Through the practice of blueprinting the repair process, NOT estimating. Through blueprinting, they are researching and documenting the proper repairs required/ recommended (which are one and the same, see Jim Castleman’s legal opinion in the May 2023 issue of New England Automotive Report at grecopublishing.com/near0523legalperspective) to restore a damaged vehicle. They are having upfront conversations with their customers about the insurer’s responsibility, as well as the vehicle owner’s responsibility should their insurer fail to cover the true costs of repair. Additional costs stemming from a refusal by an insurer to pay fairly and reasonably for labor rates and procedures such as pre- and post-scans, as well as the post-repair calibrations must be charged for because they must be performed.
Shops are no longer taking jobs just for the sake of having work in the shop. Shops are prequalifying the vehicle and its owner based on many factors. There have been instances of vehicle owners finding it a challenge to have their vehicle repaired because their insurer is so difficult to deal with. Talk about a reversal of fortune. It used to be the insurer who would tell their insured not to go to a chosen shop because it was difficult to deal with.
Another factor is the vehicle owner’s understanding that there may be, just as with their doctor, a balance due at the end of their repair if the insurer fails to cover the full cost. When it is explained to the vehicle owner that at a minimum it costs twice as much to repair their snowblower or lawnmower and the vehicle owner is still reluctant to pay the difference in cost to repair their high-tech vehicle, many shops are sending that repair down the road. They are sending it down the road to make room for a customer who does understand that quality and safety cost more and that the insurer is the problem in the equation. That decision by the shop is in part the true meaning of “Intestinal Fortitude.”
Sticking to what you believe in, in the face of adversity, because you know you are right and you are not willing to sacrifice your integrity at any cost is at the heart of “Intestinal Fortitude.”
Those who have resolved to “Break Free in ‘23” have learned that more and more customers are not only willing to wait a little
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April and May saw the Alliance’s return to in-person chapter meetings across the state, providing an opportunity for AASP/MA to deliver education and valuable networking opportunities to collision repairers in every zone.
These recent meetings served to provide updates on AASP/MA’s legislative agenda, including its labor rate reimbursement bill and movements to reform the Auto Damage Appraiser Licensing Board (ADALB), as well as an update on the Division of Standards (DOS) Notice to ensure attendees understand what it really means to them, especially if they are considering or charging a copay.
For more information on the next round of chapter meetings, please visit aaspma.org/events.
Shore
AASP/MA Vice President Matt Ciaschini (Full Tilt Auto Body and Collision; Hatfield) won the cash door prize at the April 25 meeting and donated it back to the association’s Lobbying & Legal fund account.
AASP/MA’s chapter meetings provide an opportunity for members and non-members to interact with one another and receive valuable information about what’s going on in their industry.
Lucky Papageorg with Mark Cipriani, lead collision instructor at Dean Vo-Tech in Holyoke.
North
$250 door prize winner: Shawn Cushman (Rick's Auto Collision Center; Revere).
Here’s to 241 years of combined service excellence
This year, as Albert Kemperle Inc. celebrates its 83rd anniversary, BASF also celebrates its 158th anniversary. We are proud of our decades of partnership with BASF and years of serving the auto paint and body industry together. Kemperle’s founders would be proud of this relationship and the growth their company has experienced because of it.
Today, as we look forward to many more decades of service to our customers, we find ourselves filled with gratitude. The creativity, hard work, and sense of responsibility of the people working for our two companies have made us what we are today.
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by Chasidy Rae Sisk
Commonwealth Collision Repairers Thank Jim Castleman for 40 Years of Support
For over 40 years, Jim Castleman has been contributing to the Commonwealth’s auto body community sharing his legal insights as an attorney and an educator. Many know him as a staple columnist in New England Automotive Report and Damage Report. He has offered a fountain of knowledge that has strengthened the industry and the association over the years, and several association members who count him among their friends shared their thoughts about how Jim has influenced their businesses.
“Jim has been a tremendous resource to AASP/MA and was instrumental in helping the three auto body associations successfully merge back in 2010,” recalls Molly Brodeur (Al Brodeur’s Auto Body; Marlborough). “Jim has graciously taken time to speak and present at numerous meetings over the years, advising and collaborating with shop owners, and he has personally assisted my shop with proper documentation and legal issues that have arisen over the years. Jim’s input will be missed!”
Tom Ricci (Body and Paint of Hudson) has known Castleman since 1988 and insists “No one in our industry knows the laws and regulations like Jim.”
The pair met when Ricci joined the Massachusetts Auto Body Association (MABA) and the Central Massachusetts Auto Rebuilders Association (CMARA). “I got to know Jim pretty well over the years through those two associations. He’s a great guy who really understands the collision repair industry and our issues. He has earned a lot of respect by being open, honest and easy to talk to, plus he has given us some great advice over the years about what’s going on in our industry. He has always graciously shared his invaluable wealth of knowledge, and it’s truly been a pleasure to work with him over the years.”
not drive the rental car; however, a week later, the boyfriend called Penacho and admitted that he wrecked the car which was deemed a total loss. Since the boyfriend was not on the policy, Penacho’s insurance company denied the claim.
“Jimmy helped me find out that this guy had a different policy with the same insurer, but they denied it again since the boyfriend didn’t sign the rental agreement,” Penacho says. “Well, in Massachusetts, when someone steals your car, it gets filed under loss of use, so Jim recommended that I report the car stolen since it was driven by someone who wasn’t authorized to drive it, and then I was able to file a third claim under loss of use, and that’s how I finally got paid. Jimmy happened to know the right rule at the right time to help me out. But that’s always how it’s been with him.
Ricci remembers the many times that Castleman has examined the challenges shops face and identified the best course of action to address those problems through laws and regulations. For example, when CMARA was focused on a labor rate issue and cost containment concerns, “Jim did his homework and learned that a study was supposed to be conducted, but that study never took place. No one had really heard much about it, but Jim did the research to figure out which legal avenues we were able to take to legally press them and get something accomplished because he understood and empathized with the depth to which that cost containment was affecting our shops.”
Mike Penacho (Mike’s Auto Body; Fall River) shares a memory from years ago when he got into a bind that Castleman helped him get out of. A customer frantically came to the shop, seeking a rental car after someone broke into her house, stole the keys and destroyed her car. Her boyfriend, who accompanied her to pick up the rental, was uninsured, so the signed agreement specified that he could
“I’ve known Jimmy for nearly 40 years, and he’s always offered great advice,” Penacho continues. “There have been times when I emailed him with an emergency while he was on vacation, and he still emailed me back. When I had issues with the state police related to my towing company, he helped with that. Many times, I’ve called him up with a specific situation, and two months later, I’d see an article about it in New England Automotive Report because he wanted other shops to be aware of that situation and be prepared to address it. Jim is going to be hard to replace. He’s grown tremendously with our industry, and he’s full of knowledge about what we do. He’s been a very good friend and a brother, and I wish him the best in his future endeavors!”
“I first started working with Jim when I became the executive director of MABA in the early 1990s,” AASP/MA Executive Director Lucky Papageorg recounts. “As my role was new to me at the time, I relied heavily on Jim, who was always there to give his guidance and share his knowledge, so that I could better assist our membership. Over the years, I have grown to know Jim and consider him a mentor, a source of knowledge, a sounding board, but even more so, as a real ally in the battle to help the consumers and the collision repair industry here in Massachusetts. Above all else, I am thankful for his friendship which I know will far outlast our work in the collision industry. I will surely miss our brainstorming and collaboration on articles in NEAR. I wish him and his wife Claire all the best in the future.”
It is with heartfelt gratitude that all who know him wish him the best as he steps away from the magazine and follows the new direction his law career has taken in recent years (don’t miss his farewell message on page 32).
AASP Leaders Connect, Collaborate and Collect Info at National Board Meeting
At the end of April, state affiliate leaders of the Alliance of Automotive Service Providers (AASP) gathered at the I-CAR Chicago Technical Center (CTC) in Vernon Hills, Illinois for a full day of learning, sharing and interacting during the national association’s first meeting of 2023.
AASP/MA Executive Director Lucky Papageorg made the trip out to connect with fellow members of AASP National, tour I-CAR’s newly unveiled CTC and to share the goals and efforts of the Alliance here in the Commonwealth with colleagues from around the country including New Jersey, Pennsylvania, Minnesota, New York, North Carolina and Illinois.
Papageorg proudly reported the tremendous support legislators have given to the Alliance’s legislative efforts to pass a labor reimbursement bill that will be based on the consumer price index and a bill that would reform the ADALB by moving it from the crippling hands of the Division of Insurance to the Division of Occupational Licensure.
Papageorg reflected on recent successes which include the Alliance’s “breaking free in 23” efforts, such as revving its members to institute a copay.
“It’s the future. Shops are going to have to utilize copays if they expect to thrive, not just survive,” suggested Papageorg. “If the insurance industry isn’t going to pay, the vehicle owner is going to have to step it up.”
Conversation went back and forth around the room as Papageorg and other leaders shared their experiences within their own membership groups along with information and education related to ADAS, Right to Appraisal, storage and administration fees and the liability repairers face if cars are not fixed to OEM standards.
During her report, AASP National Administrator Judell Anderson shared the recent success of the AASP-supported Database Enhancement Gateway (DEG), supplied by its administrator Danny Gredinberg. Highlights included the DEG’s newly refurbished website and the significant corrections made to the estimating systems as a result of the DEG’s efforts. She applauded the DEG for its large impact on body shops all across the country that will benefit from those corrections.
“I don’t think you can point to anything else that has the impact the DEG has,” Anderson praised, adding that if more repair professionals took the time to submit
The AASP National Spring 2023 meeting included a tour of I-CAR's new and impressive Chicago Technical Center as well as an open discussion of achievements and challenges from each state affiliate, including a report on AASP/MA activity and successes from Executive Director Lucky Papageorg (inset).
inquiries, it would be even greater.
Meeting at the I-CAR training center allowed affiliate leaders the opportunity to walk through the new facility courtesy of a tour led by Bud Center, director of technical products and curriculum.
Center relayed the specific design requirements that were needed for the facility, especially for its ADAS calibration training area. I-CAR worked closely with the contractor to make sure the floor was completely level and flat as per requirements of many manufacturers when it comes to their ADAS calibrations.
“A self-leveling product had to be poured, a little at a time, and then 3D lasers were put all over the floor to make sure it stayed level,” Center explained. In fact, the contractor they worked with admitted he had never been asked to produce a completely flat and level surface previously.
Lighting is another key factor in ADAS calibrations. The lighting in the room is designed to be dimmed, so it can be adjusted to match daylight. According to Center, there are many situations that require lighting to match outdoor lighting, and without it, it can take a lot longer to perform and set dynamic calibrations.
by Alana Quartuccio
As AASP members stopped to look at the equipment, tools and vehicles used in EV training, Center reviewed the five-day process that starts with understanding the basics of electricity through the teaching and building of low voltage electrical circuits which emulate the high voltage systems in vehicles. Once the trainees have developed an understanding about the different concerns and dangers involved in high voltage vehicles, they will be able to test and diagnose so they know what to expect when working on a live vehicle. Once thorough understanding is reached, trainees can work on a live vehicle with the proper PPE.
“We have people come through here say ‘my head hurts trying to take it all in all this information and understand it all,’” Center said of the intense program, adding that people will comment that EVs are not yet widely seen, but “it only takes one vehicle to kill somebody,” he noted, implying that a safe repair is as much about keeping your techs safe during the repair as it is about returning a safe car to the customer
An overview led by I-CAR’s Mike Mertes, learning innovation and technology manager, and Jeff Peevy, vice president of technician products programs and services on how “cutting edge” innovations, such as AI, can be possibly utilized in training evolved into an eye-opening discussion on how technology advancements could be used as a recruitment tool as the group considered the future of collision repair.
I-CAR is in the early stages of developing a virtual repair planning game that, once mastered, would put that person in a more advantageous position over the average person entering
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Is
For the past two years, Americans have seen some of the highest rates of inflation they’ve ever witnessed, creating a feeling of dread among small business owners from coast to coast. But for auto body shops, these fears may be in vain since the public’s need to hang onto their cars longer has actually resulted in more work for many facilities. Although no industry is fully recession-proof,
collision repair may be more resistant to these economic dilemmas than other fields. By embracing the opportunities that exist – and collecting fair and adequate compensation for the difficult work you perform – your business may be in better shape than you realize, and industry leaders provide some valuable insights to explain why inflation might actually benefit your body shop.
Good for Your Body Shop? Part 1
“When interest rates rise and there are fears of a recession, I recognize how easy it is to become overwhelmed with fears, but I’m not afraid,” insists Mike Anderson (Collision Advice). “While it’s obviously bad in some ways, I believe it’s also good news for our industry because there are some pros. For example, a higher interest rate makes it harder to borrow money which means fewer
people can open new shops. It increases the price of admission. While we need more good shop operators, creating a barrier of entry prevents just anyone from opening a shop and offers some protection to the people who are currently in the industry and actively investing in their businesses.”
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continued from pg. 27
Maylan Newton (Educational Seminars Institute) agrees that “the transportation industry has survived very well during every past recession. Even during the height of the pandemic, repair shops remained busy because people wanted to isolate themselves in their own mode of transportation. In the US, we are very transportation dependent, and few places have a reasonably clean, rapid public transit system. The average vehicle age and miles driven has increased, and although the industry is changing, I don’t think it’s changing to the point that it won’t be needed. Sure, we will need to modify the way we do things and learn new technology, but there are plenty of cars on the highway that need our attention.”
Before the pandemic, shops commonly saw workloads decrease for weeks at a time, but most repairers barely have a chance to catch a break between repairs these days. While COVID resulted in a larger remote workforce, the public still relies on their vehicles – to take the kids to soccer or dance practice, to travel to appointments and to attend social gatherings.
“Our cars are integral to how we live our lifestyles. That plays a lot into the consistent need for repairs, and as the economy tightens, more people opt to repair their cars instead of buying new,” points out Rachel James (Torque Financial Group). “Looking back at the economic changes the industry has experienced over the years, the only real constant is change. The economy isn’t stagnant; there’s economic uncertainty every day. But shops are used to changing and adapting. If you get a run in your paint, the painter knows there are tools to fix it. Having a solid financial plan is a tool that every business needs, no matter the current economic situation.”
On the other hand, it’s hard for shops to keep up with the influx of work while also contending with the ongoing workforce shortage; however, James believes the current economic situation also provides an opportunity for shops to attract more qualified talent from other industries that may be suffering more than ours. With companies announcing closures of locations all across the country, the employment structure is weakening which means qualified professionals will be looking for new opportunities. This offers our industry a chance to attract customer service representatives and other skilled talent to repair and collision shops.”
While economic downturns are typically viewed negatively, they also offer some benefits, according to Rick White (180BIZ).
When you’re approaching the unknown, recognizing that you control your mindset and your mindset controls your outcomes can make all the difference in the world.
“This is a chance to realign and correct the economy when prices spiral out of control. It also offers a chance to ‘discover who’s swimming naked,’ as Warren Buffet said. A lot of activity hides a lot of sins in sales. Poor performance at the front counter can still be profitable if I have enough people coming in, but when the tide goes out, those shortcuts are glaringly evident without the activity to hide them. Slowing down gives us a chance to step back, return to the basics and correct our actions.”
Of course, it can be easy to fall into a pattern of pessimism when so much negativity surrounds us, but Newton stresses the importance of a positive attitude. “If it’s all doom and gloom, why are so many consolidators buying up shops?” he asks. “Venture capitalists are making huge investments in MSOs and software companies, and they wouldn’t do that if they didn’t believe there was a return on investment. We’re a vital industry, so we should be going to work excited, with a good attitude. Be optimistic about the future! Yes, we’ll need to learn about electric vehicles and how to work on alternatively fueled cars, but we’ve been learning for over 100 years. We started as blacksmiths, and now we’re working on complex machines. Even when vehicles advance to the Jetsonage of flying saucers, they’ll still need us to fix them. It’s up to you if you’re going to be prepared for that future or if you’re going to give up now.”
“Shop owners need to keep their heads and maintain a positive mindset because how you show up in business has everything to do with how the business will go,” White agrees. “You may need to work harder, but recognizing there’s still opportunities to take advantage of is better than believing it’s going to get slow. Thoughts dictate actions, so when you accept that negative change is coming, you stop working as hard; your negative thoughts allow you to spiral and reinforce that negativity. But positive thinking helps you work harder and make good things happen.
“When things go well, we unconsciously expect them to stay that way, and when they go sideways, we fear they’ll stay that way,” he continues. “But neither is true. In reality, there are seasons to business: We plant and grow in spring, nurture in summer, harvest in the fall and then recharge and reset every winter. And if you’re prepared for those cycles, it can be pretty amazing. Jim
Rohn has a great lesson on thinking like an ant…never quit, focus on gathering all you can, think winter all summer and think summer all winter. Your economy lives in the six inches between your ears, and when you’re approaching the unknown, recognizing that you control your mindset and your mindset controls your outcomes can make all the difference in the world.”
Opportunities absolutely exist for shops that know how to take advantage of them – and embracing a positive mindset is key in achieving a more favorable future outcome for your facility. So, what are those opportunities, how can advancing technology work to shops’ benefit and how can shops navigate increasing expenses? Stay tuned to next month’s New England Automotive Report as these leading industry experts share more insights to help you find ways that inflation can benefit your business!
This is my last regular Legal Perspective column. I have been writing monthly articles for New England Automotive Report, and before that for Damage Report, almost continuously since 1982. It has been a long journey, and I hope that I can adjust to a life of not having a monthly deadline hanging over my head.
I am not retiring, but the nature of my law practice has changed significantly over the past several years, and I am less involved with the collision repair industry than I used to be and more involved with other clients. And, quite frankly, it sometimes is a chore to come up with what appears to be a new topic every 30 days. On the other hand, I am still here, willing to give advice regarding issues that affect the industry, and, if pushed, I still might be willing to contribute an article here and there on a particular new or challenging issue.
It was suggested to me that I look back over the past many decades and use this opportunity to write about the topics that I think are most important to members of the collision repair industry, and that is what I am going to do; however, that being said, in my opinion, there is really only one major topic that matters the most: the labor rate!
There certainly are a lot of other topics that are important as well, but many of them would be only afterthoughts if collision repair shops could charge and collect a fair labor rate for their services. Are insurers looking for a discount on repair parts prices, or do they seem to take excessive depreciation on wear items, or are they claiming that certain procedures are already included in a particular repair allowance? While important, all of these issues would take a back seat if repairers were able to get paid a decent labor rate. Do insurers not want to pay a markup on sublet work, not want to pay your storage rate or want to pay only on a dollars
times hours basis for paint and materials? Again, if repairers were able to get paid a fair labor rate for their services, then all of these issues would still be important, but much less so than they are now.
As I have often recounted, the very first question that was posed to me at the first Board of Directors meeting of a collision repair association that I attended was: What can we do about the labor rate? The association at the time was the Massachusetts Auto Body Shop Owners Association (MABSOA), the meeting took place in January of 1976. I had been a lawyer for about one month, and my boss had just picked up MABSOA as a client but did not want to personally attend their Directors’ meetings. So, as the new kid on the block, I was the one chosen to spend monthly night time meetings in smoke-filled, closely packed rooms with a bunch of mostly old-time tin knockers drinking Seagram’s VO and soda. I had no idea what the labor rate question meant at the time or how important it was to the industry, but I made the effort to talk to various members of the association to find out and tried my best to research laws that might show me some answers.
Over the years, MABSOA grew in membership, subsequently became MABA and eventually merged with two other industry associations to become AASP/MA. Meanwhile, cars became increasingly more complicated to repair, members of the industry became more sophisticated and better educated, and computers and microchips became an integral part of the collision repair business. But over those years, the question that I continued to get the most was: What can we do about the labor rate? That continues to be the case, and I have continued to talk to members
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of the industry about the issue and continued to research laws that might shed light on the answer.
So, what can you do about the labor rate?
First and foremost, set what YOU believe that you need to get for a labor rate, and charge that rate. I know that this is not easy to do, and that insurers – that pay for the great bulk of collision repairs throughout the United States and perhaps the world – are going to do everything in their power to avoid paying your rate if it is higher than a particular insurer is regularly paying. But if you think the labor rate that insurers are paying is going to increase just because you wish that it would, then you are living in a fantasy world. The labor rate that insurers will pay is probably not going to increase until enough repair shops set their own labor rate, insist on getting paid that rate and tell their customers up front that they will be looking to them to pay any difference their insurer refuses to pay.
Repair shops legally cannot agree with one another to charge a particular rate. But individual repair shops can choose what they want to charge and can determine what other shops in the area are charging so that they can be competitive and set their rate accordingly. Further, there are consultants that can look at your business and help you determine what you need to get for a labor rate in order to make a reasonable profit. There are also surveys that can tell you what other shops are charging – and what they are actually getting paid. And in today’s world, there also may be online resources that can help you determine what a reasonable labor rate for your shop and your location might be.
No matter what insurers tell you, there is nothing preventing you from charging what you want to get paid and balance-billing your customers for what their insurers won’t pay. And despite the ridiculous Notice recently issued by the Division of Standards – as the result of apparently bogus information supplied to the Division by a couple of insurers – there is NOTHING illegal about suggesting to your customers that they try to get reimbursed from their insurers for whatever those additional amounts are. You also can develop and inform your customers of strategies that you believe may be effective in convincing their insurers to reimburse them, provide your customers with suggested language to use when making a demand to their insurer and otherwise provide assistance in their efforts as you see fit.
Please understand that you need to let your customers know in advance what your charges are, that their insurer may not be willing to pay your labor rate, that the customer will be responsible for the amount that the insurer will not pay and that although they should try to get reimbursed the additional amount from their insurer, there is no guarantee that their insurer will
pay it. But if you can educate your customers as to what it truly takes to properly repair their cars and that you have the ability to properly make those repairs, but that you need to get paid a decent labor rate in order to remain in business, then hopefully your customers will agree to your terms.
Also, your ability to charge and collect a higher labor rate may be affected by the nature of your particular business. As an example, do you perform specialty work? Historically, businesses that specialize in certain repairs, perhaps for repairs to particular high-end vehicles, have been able to get paid more when they sell their services in a way that makes their customers and their customers’ insurers understand that they are worth being paid more.
This originally was brought to my attention many years ago by a shop that only repaired Corvettes and had built a reputation for doing so. They did not care what an insurer was paying. Their customer was the car owner, and these particular car owners took great pride in their vehicles and were willing to pay more out of their own pocket to make sure that repairs to their cars were being performed by a reputable business that knew what it was doing.
If the vast majority of repair shops are willing to accept whatever insurers are willing to pay for a labor rate, then no insurer is going to voluntarily pay a higher rate.
I have seen this occur for other high-end vehicles as well –including once seeing an insurance industry lawyer willing to pay extra dollars out of his own pocket for repairs to his Volvo. The attorney knew from his experience representing insurers that certain repair shops were less than reputable, he knew the excellent reputation of the shop that he chose to make repairs, and he was willing to pay a few dollars more to make sure that repairs were properly made to his vehicle.
Over the years, I have also seen several shops who have taken the bull by the horns and learned and invested in specialized repair technologies ahead of other shops. The making of aluminum repairs sticks in my mind as a prime example. When the ability to make proper aluminum repairs was in the hands of only a few shops in the state, those shops were able to set – and
continued on pg. 38
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get paid – a significantly greater labor rate for those repairs. Are you a certified Tesla repair shop or one of a few shops able to perform repairs on other specialized vehicles? If so, there may be only a limited number of you able to properly make those repairs, and you can factor that into the labor rate that you set.
Here is another tip, and I know of situations in which it has worked: If you are a large and reputable repair shop in an area in which few qualified shops exist, or if you own multiple repair shops that do high volume work, then you may be in a position to negotiate with some insurers for a higher labor rate. Collision repair shops rely on insurers to pay for most repairs. On the other hand, insurers need to make sure that there are enough shops out there willing to repair their customers’ cars that will accept the labor rate that they are willing to pay, and they are sometimes willing to make concessions to ensure that their customers are serviced.
Referral repair shops are contractually required to accept whatever their referring insurer is willing to pay for a labor rate. But even if you are a referral repair shop, if your volume of business for a particular insurer is high enough, you may have leverage in negotiating a higher labor rate. Caveat: I have learned that insurers might not want word to get out that they are paying you a higher rate, so sometimes they will refuse to pay a higher rate, instead giving you concessions as to other items that they will agree to pay for; however, if you are knowledgeable and handle it right, the result to your bottom line can be pretty much the same as a higher labor rate.
In thinking about the labor rate issue, please keep in mind that, if the vast majority of repair shops are willing to accept whatever insurers are willing to pay for a labor rate, then no insurer is going to voluntarily pay a higher rate. Enough shops need to recognize this reality and be willing to do something about it.
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Finally, if you want to get paid a higher labor rate, then it is critical that you do everything in your power to support the passage by the Massachusetts legislature of the AASP/MA-sponsored labor reimbursement rate bill. If enacted, this bill will require insurers to pay a fair and reasonable collision repair reimbursement rate, tied to the consumer price index. It is a no-brainer for repair shops and will require insurers to pay a minimum reasonable labor rate geared to inflation.
Here is something that you need to recognize: No matter how much money insurers inject into opposition to this bill, the reality is that state senators and representatives get elected by getting the most votes for office in their district. If they know that enough of their constituents care about and want a piece of legislation to pass, and if they want to keep their jobs, then most of them will vote accordingly. Do not turn your nose up at this concept. When asked by AASP/MA to contact your senator or representative, please do so! When asked to contribute to the cause, please do so! When asked to have your friends, relatives and staff contact their senators and representatives, please do so!
Do not just accept the proposition that insurers in Massachusetts are too powerful to beat. There is tremendous power in the vote of the individual, and you need to harness that power if you want your business to thrive.
Conclusion
It may be an appropriate metaphor to say that it has been a great ride – and it has. But I have decided to forgo writing monthly articles for New England Automotive Report at this point and am sticking with that decision. I greatly appreciate the support that I have received from all of the New England Automotive Report staff that I have dealt with over the years and from all of the readers that I have heard from as well. I hope that you have found my articles to be informative and that some of them have been useful to you in the operation of your business or have been helpful to your customers when dealing with their insurers.
Meanwhile, I also hope that a great many of you actually heed my advice and find the strength and ability to take action to do what is necessary to answer, on your own, the question: What can we do about the labor rate?
Attorney James Castleman is a managing member of Paster, Rice & Castleman, LLC in Quincy, MA. He can be reached at (617) 472-3424 or at jcastleman@prclawoffice.com
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the field. In fact, augmented reality is changing the face of repair, overall. Mertes explained how something like a Microsoft HoloLens can scan a vehicle and provide step-by-step repair instructions. It also creates a new experience when in need of assistance. Augmented reality can allow a technician to remote someone in who can “see” the repair process through their virtual eyes and walk them through it.
Cars are more computerized than ever before. Although most of the world may not realize it, process skills (such as critical thinking and problem solving from a technical standpoint) are needed in addition to hands-on skills, Peevy stressed. “Once someone envisions something with wheels on it, they automatically think one has only to be good with their hands.”
Changing the look of the industry is necessary in getting a new generation into the fold. Papageorg agreed with Peevy on needing to change who the industry looks for in trying to bring new people in. He influenced a friend’s son who is about to graduate to consider working for a calibration business based on the young man’s technology skills.
“We have to let the public know about these changes in our industry,” he suggested. “Many parents of students in the vocational schools are likely to steer students from collision repair over to HVAC or other vocations. They don’t understand the capabilities required or the opportunities our industry has begun to offer talented young individuals looking for a challenge.”
The AASP National Board plans to reconvene at the 2023 SEMA Show in Las Vegas.
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continued from pg. 8
longer to get their vehicle repaired properly but will also pay more to do so. Insurers are stymied when hit with requests for reimbursement from their insureds with the proper backup documentation. The documentation gathered through the blueprinting process can no longer be ignored and disproven with a simple “We told you we don’t pay for that.”
Have no doubt about it: It has not been nor will it be an easy road, but things are getting better. They are especially getting better for those who will not be denied, and for those who will not wilt under insurer pressure to do more for less than what they deserve.
Things are getting better every day for shops that are able to draw from the ever-depleting technician pool because they have the correct equipment and repair procedures in place. More importantly, things are getting better because they are able to pay better and offer more benefits to their technical and office staff, ALL because they have the “Intestinal Fortitude” to charge what they are worth.
Do you want to learn what these shops have learned? Do you want to be a thriver and not just a survivor in the future? Sure, you can learn just by trial and error, or you can become a part of the ever-strengthening “ALLIANCE” of collision repairers who are making a difference. See the AASP-MA application on page 7. Join NOW…. You will be surprised it takes a lot less “Intestinal Fortitude” than you think when you are part of the “ALLIANCE.”
AASP/MA EXECUTIVE DIRECTOR EVANGELOS “LUCKY” PAPAGEORG can be reached at (617) 574-0741 or lucky@aaspma.org.
