Texas Automotive March 2024

ABAT

Official

ABAT

Brandon Gillespy Park Place BodyWerks bgillespy@parkplace.com 214-443-8250

Chad Kiffe Berli's Body & Fine Finishes chadk@berlisbody.com (512) 251-6136

Greg Luther Helfman Collision gluther@helfman.com (713) 574-5060

Robert McDorman Auto Claim Specialists rmcdorman@autoclaimspecialists.com (817) 756-5482

Chad Neal Innovative Collision Equipment Chadwneal@yahoo.com (817) 527-2143

Logan

Anthony

Manuel Rubio

Albert

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PRESIDENT/PUBLISHER

Thomas Greco / thomas@grecopublishing.com

VICE PRESIDENT/SALES DIRECTOR

Alicia Figurelli / alicia@grecopublishing.com

EDITORIAL/CREATIVE COORDINATOR

Alana Quartuccio / alana@grecopublishing.com

MANAGING EDITOR

Chasidy Rae Sisk / chasidy@grecopublishing.com

PRODUCTION COORDINATOR

Joe Greco / joe@grecopublishing.com

OFFICE MANAGER

Donna Greco / donna@grecopublishing.com

SPECIAL CONTRIBUTORS: Burl Richards / Jill Tuggle

Robert L. McDorman / Mike Anderson / Jacquelyn Bauman

www.grecopublishing.com

TEXAS AUTOMOTIVE is published monthly and is sent to ABAT

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AUTOMOTIVE is published by Thomas Greco Publishing Inc., 244 Chestnut St., Nutley, NJ 07110. The editorial contents of TEXAS AUTOMOTIVE are copyright © 2023 by Thomas Greco Publishing Inc. and may not be reproduced in any manner,

Everyone’s Thoughts Matter

OOne of the things that makes ABAT such a successful association is recognizing that the many is greater than the few, so it’s important that we stay organized in order to represent the interests of all our members throughout the great state of Texas. During our annual Board meeting, held February 9 in Waco, we focused on the best ways to accomplish our many goals related to bettering the auto body industry for all shops.

Because our organization has members in so many different markets which face their own unique challenges, our Board members’ input is invaluable, since each of them represent these various regions. The majority of our leadership team attended the recent meeting, along with ABAT Lobbyist Jacob Smith who updated everyone on the current legislative races and our intended initiatives going into next year. Although the Texas legislative session only takes place every other year, time goes by pretty dang fast, so we’re gearing up for the 2025 session now to maximize our impact!

We’re also doing something new. Because we want every Board member to have a voice so they can best address each market’s specific agendas, we formed subcommittees to enable us to give closer attention to the causes that may be nearest and dearest to certain individuals in hopes that it will allow us to effect an even greater impact on those endeavors. For example, we created legislative, membership and marketing subcommittees; having small groups invest greater energy into specific topics on the overall agenda improves our ability to really dive into these issues, single things out and be more effective. Then, those subcommittees will update the entire Board on the specifics.

Of course, we also discussed ABAT’s upcoming Texas Auto Body Trade Show, scheduled for July 12-13 at the Irving Convention Center,

SOURCE1 ADAS

and we’re all excited to see how the show gets even bigger and better this year as we continue finding new ways to support auto body businesses in our market.

Overall, the meeting was really productive, and I feel like we accomplished a lot, but I think the most important thing we discussed was our membership because, after all, ABAT is comprised of auto body shops working for the collision repair industry! It’s not about one person’s vision or objectives; it’s about how we can work together to benefit all of our members. Our Board is very committed to ABAT’s vision of improving the industry for every auto body professional in the Lone Star State, so it’s vital that we know if there’s an important mission we need to focus on so we can better support you, our members.

Over the next few months, our Board members will be reaching out to the shops in the markets they represent to find out what’s most important to YOU. We want our members to get the most value possible from their involvement with ABAT, but we need your help! Send your suggestions to your local representatives (you can find their names and contact information on page 3 or at abat.us/abat-board), or feel free to reach out to me directly.

Together, we can keep making our industry stronger and better for all of us!

Burl Richards

Executive Director’s Message

A Sneak Peek at ABAT’s 2024 Texas Auto Body Trade Show

II feel a bit like a broken record when I come to you each year and tell you how this will be the BEST and MOST FUN year yet at the Texas Auto Body Trade Show, but each time, it is actually true! We do get bigger, better, more fun and more impactful each year! And…wait for it…2024 will be our best year yet! For real though!

We have NEW education on some of the hottest topics in the industry, presented by the industry’s BEST trainers. And we’ll be showcasing NEW tools and equipment and hosting NEW special events…and I ALWAYS have a few tricks up my sleeve! But for now, I want to share some of our class information with you.

Some of our education will include tried-and-true and back by popular demand topics and speakers. At the top of that list is the king of the collision industry: Collision Advice’s Mike Anderson! But this year it’s not just Mike. We are getting Mike AND HIS TEAM – this is a special treat. Mike called me up and said he wanted to do something very special for Texas because he loves us more than any other state (well, maybe he didn’t exactly say that last part, but I’m pretty sure he was thinking it) and offered to clear the

calendar for anyone on his team to come speak at our show! We will hear from them on topics like negotiation, repair planning and more. Repair planning is a hot topic every year, and we aim to deliver the goods for you and your team in 2024.

Yanni Koutmos from Eagle MMS will bring a great presentation on how to properly estimate and invoice for repair materials, and in the next room, you can hear from Tom Zobelein of Capture the Keys as he reveals tried and true digital marketing strategies that have paid dividends for many of our members and Board. Come have an “Honest Conversation” with Clay Hoberecht – you may have seen him a few times on Facebook as the outspoken and innovative owner of one of the top shops in America: Best Body Shop in Wichita, Kansas.

The education certainly does not stop there; additional class topics will include legislation and repair laws in Texas, shop culture, procedures and estimating.

Why Join WIN?

•

Of course, there’s always tons of fun in the mix…Erin Solis (Certified Collision Group) and Danny Gredinberg (Database Enhancement Gateway) will be donning evening wear to bring you Repairidy, a collision repair game show similar to the popular game show, Jeopardy. You may even be called to the stage, so bring your A-game to this seminar!

Whatever you are looking for to support your collision business and career, I can guarantee you will find it July 12-13 at the 2024 Texas Auto Body Trade Show in Irving! Be sure to register early because many of these classes WILL SELL OUT! See you there!

Jill Tuggle ABAT Executive Director

Industry Update

Reliability, Excellence & Industry-Leading Support: Reliable Automotive Equipment

Reliable Automotive Equipment is an industry-leading supplier of OE-certified collision repair equipment. RAE has always been a major advocate of doing things “The Right Way” by demonstrating superior customer service and tailoring equipment solutions to meet the ever-changing demands of the automotive market.

Today’s technicians face unprecedented challenges, including increasingly complex repairs and safety hazards. With the rapid increase in new materials and vehicle construction, there is a growing need for quality tools, top-notch training, and ongoing support. RAE provides professional guidance to help navigate these challenges and maintain a competitive edge within the industry, all while adhering to OEM standards for vehicle repair.

One of RAE’s standout tools is the Xpress800-a versatile “All-In-One” riveting gun system designed to meet a wide range

of riveting needs, including Self-Piercing, Flow Form, Blind Rivets, Blind Rivet Nuts, and more. Its quick-change adapter setup eliminates downtime and ensures efficiency in operations.

The Xpress800 is easy to use and update, while adhering to OEM-approved methods and procedures. It is the preferred rivet gun for certifications. This versatile tool ensures efficiency and effectiveness in various riveting tasks, further solidifying its status as an indispensable asset for automotive professionals.

In an industry marked by constant evolution and heightened challenges, Reliable Automotive Equipment stands firm in its dedication to providing unparalleled support and cutting-edge solutions. With an unyielding commitment to quality, innovation, and customer satisfaction, RAE remains the trusted partner for automotive professionals worldwide. From superior

The Xpress800 system is designed to meet a wide range of riveting needs.

customer service to industry-leading tools like the Xpress800, RAE continues to pave the way for success in the automotive repair industry.

Choose reliability. Choose excellence. Choose Reliable Automotive Equipment. TXA

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by Chasidy Rae Sisk

Profile “Flexibility” But No Guidance Change: Mitchell Responds to SCRS Blend Study

Since the Society of Collision Repair Specialists (SCRS) released the results of their blend study in late 2022, collision repairers have been waiting for updates from the three major information providers (IPs), but while CCC/MOTOR and Audatex both addressed the concerns raised by making changes to their systems last year, Mitchell remained reticent… until earlier this year when Jack Rozint, repair sales senior vice president, casually announced an imminent enhancement to Mitchell Cloud Estimating during open mic at the Collision Industry Conference, held in Palm Springs in January.

“There have been a lot of questions, apparently, about what Mitchell is doing in the area of refinish calculations,” Rozint acknowledged, explaining that an upcoming release to Mitchell Cloud Estimating would offer “the opportunity for users to set up, at the profile level, seven different areas of refinish calculations,” allowing users to “set up their own default settings for clear coat, three-stage and two-tone blend refinishing adjustments as well as different blends for each insurer, giving a ton of flexibility to our customers.”

In response to Rozint’s announcement, SCRS Executive Director Aaron Schulenburg asked, “Will the guidance in the Mitchell Guide also change relative to any of the formulas, or is it just the flexibility in the actual profile setup?” to which Rozint responded, “Our defaults will not change at this time.” So, Mitchell’s guide still indicates blends as 50 percent of the full refinish time, unlike the other two IPs that updated their solutions to provide profile flexibility and updated their guidance to recognize

the variables associated with blending and changes in modern automotive refinish products. The updated guidance in CCC and Audatex addresses the difficulty of blending by recommending deference to the judgment of an estimator or appraiser following an on-thespot evaluation of the specific vehicle and refinish requirements in question.

While Mitchell communicated these changes as an improvement, their insistence on adhering to the 50 percent formula that has been utilized in their Collision Estimating Guide for more than three decades is likely to continue to make it challenging for shops to take advantage of the system’s newfound “flexibility.”

Although Rozint claimed that the enhancements are designed to provide users with greater flexibility and control over labor time calculations and will enable repair planners to adjust all seven common refinish calculations in the estimate profile (clear coat, refinish, blend, three stage, two tone, finish sand and buff and de-nib and finesse), Mitchell’s insistence on maintaining its previous guidance seems to indicate a refusal to actually accept the facts that have been repeatedly presented.

“The fact that they are addressing it is encouraging; however, I believe they have lost touch with the fact that today’s processes and procedures require much more time and material costs than it did years ago when they derived their blend formula,” ABAT President Burl Richards shares his thoughts. “They disagree with the results of the SCRS Blend Study and refused to participate, so in my opinion, they are catering to the insurance companies by not allowing the formula to be

corrected.”

The SCRS blend study, conducted in collaboration with AkzoNobel, Axalta, BASF, PPG and Sherwin-Williams, evaluated blending in comparison to full refinish values when considering solid, metallic and tri-stage refinish options across all the paint manufacturers and concluded that blend times are 31.59 percent greater than full refinished value on average, a significant difference than the 50 percent formula utilized by the IPs at the time.

After conducting its own observational studies of the blend process, MOTOR/CCC released guidance in April 2023, changing its Estimated Worktime Development Methodology related to color blend of adjacent panels to account for variations in modern vehicle paint refinishing. Since their October system enhancement, users are able to click a blend button in CCC ONE which automatically calculates a two-stage blend at 50 percent of the refinish time and a threestage blend at 70 percent of the full refinish time. An on-the-spot evaluation allows users to either input a default value for two-stage and three-stage blends or opt to have the system prompt them for the blend time specific to that repair.

CCC also updated its Guide to Estimating to remove the prior formula and add verbiage clarifying that “estimated refinish times for color blending should defer to the judgment of an estimator or appraiser following an on-the-spot evaluation of the specific vehicle and refinish requirements in question.”

MOTOR specifically identifies judgment time as “the outcome reached when an estimator or appraiser considers the specifics of the vehicle and repair or refinish operation being evaluated to determine the estimated work time,” according to their response to an inquiry submitted by the Database Enhancement Gateway (DEG).

DEG’s inquiry questioning MOTOR’s removal of blend formulas elicited the following clarification: “MOTOR removed the previously published color blend formulas after determining they may not reflect the many variations encountered with modern vehicle finishes and designs. Citing these variations, MOTOR does not intend to

DON’T GET STUCK WHEN IT’S TIME TO SELL OR RETIRE

A typical shop owner works diligently in their business every day, focused on meeting customers’ needs, ensuring their team receives required training and properly equipping their business to repair today’s complex vehicles. But no matter how much one loves what they do, the day will come when it’s time to retire or sell the business. When that time finally arrives, many realize that – although they’re ready to get out – they aren’t actually prepared. Rather than being able to exit based on their own signs, they find themselves stuck on the same path…or forced to follow circuitous detours that wind up taking them much longer to get to where they’re trying to go!

“Most shop owners do what they do every day; they run their business and provide services to the public. They’re not necessarily in the business with the intention of transitioning it to someone else, but at some point, they are going to want to retire or sell, so it’s important to learn about the different approaches to succession planning, since this can have an impact on their current goals,” says Jason Marx (Mandelbaum Barrett PC).

He asks, “What will it look like when you decide to get out? Will you sell the business to an employee, pass it to your children or something else? It’s important to understand how your business will

be valued and go about it in a strategic way to minimize tax exposure, maximize value and enjoy a smooth and seamless transition as you pass the business along to the next generation of leaders. And these are topics you don’t want to start thinking about when it’s time to retire – you need to consider your exit strategy as soon as you start your business, so if you don’t have a plan in place, it’s time to map one out!”

Whether you plan to pass the business along to a family member, sell to a valued employee or join the consolidation bandwagon, exiting the business isn’t as simple as typing up a letter of resignation or relinquishing your key to the front door. The process requires forethought and preparation…or at least, it should if you want to walk away with something to show for all your hard work. In fact, exiting the business is not a process that can take years, it should take years, according to industry experts.

“When many shop owners get out of the business, their decision is a reaction, instead of a well thought out plan,” notes Rick White (180BIZ). “They get tired of the daily grind and just don’t want to deal with it anymore. The problem is how few people consider an exit strategy ahead of that day. And when you fail to plan, you are planning to fail.”

“It’s never too early to begin thinking about it, and, as a matter of fact, every move that a shop owner makes should have succession in mind,” suggests certified exit planner Matt DiFrancesco, whose company High Lift Financial specializes in working solely with collision repair businesses. “Shop owners need to put the vehicle in place, so when the time comes, they are able to exit on their own terms. Shop owners reach out to me at various points in their planning; some may be five years out, some need to get out now and some aren’t looking to get out but want to begin to put the plans in place.”

Maylan Newton from Educational Seminars Institute agrees that one should start thinking about how they will exit their business from the very day they purchase it. He suggests a minimum of five years is needed to prepare, but he recommends, “If you bought your shop today, I’d tell you to pick a day 20 or 30 years in the future and make that the day you plan to stop owning or working on that business.

“It’s never too early to plan, but in many cases, it can be too late,” adds Newton. “For most people in our industry, the exit strategy winds up being death, and they leave behind a business that has no value to their heirs because they didn’t build a business that stands on its own and is therefore sellable.”

Although Consolidation Coach’s Laura Gay agrees that it’s never too early to start thinking about one’s exit strategy, she acknowledges that the actual time frame necessary for any specific shop depends on the owner and the business itself. “I think most shop owners fall into the category of not wanting to deal with it until the time comes,” she observes. “Obviously, that’s not ideal, but it’s not a deal killer either. There are plenty of shop owners who are just focused on running their business the best they can, being the most efficient. If you are running a good shop from top to bottom, that’s really what you need to focus on because at the end of the day, it comes down to having a really nice, well-run facility. That is what brings the dollars.”

Shops often neglect to develop an exit strategy – they simply decide to sell without any advance preparation, and as a result, a lot of shop owners are very disappointed to discover the true value of their business.

White encourages shop owners to invest a little time into their exit strategy. “The business needs to be profitable before you try to sell it, and that means being able to show four or five years of consistent profit. For a shop that isn’t profitable, it may take five years to generate a profit and another five years of maintaining it before selling is in your best interests.

“A lot of shops are barely making a profit; they’re not worth much more than their assets,” he laments. “Yet every owner assumes their shop is worth $1 million…and it’s really sad when they find out what it’s actually worth.”

by Chasidy Rae Sisk & Alana Quartuccio

“There are three options. They can do an internal succession to a family member or an employee. They can do a third-party sale, whether it’s to a consolidator or a small MSO, or they can look for another third-party buyer in the market who may be looking to acquire shops. There is even what could be called a fourth option where one does an internal succession but does not completely step away. The owner still maintains some control, but they give equity to employees so they no longer have to be involved with the day-to-day stuff. That is a lifestyle exit where they still have control over the business but no longer participate as part of the daily operation. That equity can be structured either as a stock purchase program for key employees or an ESOP (employer stock option program).”

The type of entity one chooses to sell the business to can have a significant impact on how much the property is worth, Gay points out. “If you lease it to an individual or a private entity, the property value will be significantly different.” If someone were to lease to a big name consolidator, the value of the property will go up which may be food for thought when considering leasing to an independent which could result in “leaving money on the table.”

Consolidation is becoming increasingly common in some markets while seeming to skip other markets altogether.

“This is the age of acquisitions with lots of major players buying businesses while many smaller independents are pulling out,” White believes.

If consolidation is the route that makes most sense for your business plan, one important thing to realize is that everything is negotiable in the process, from the big stuff to the tiny details, according to Gay. There are many different deal structure platforms taking place when it comes to the sale of collision shops. There’s MSOs buying other MSOs, private equity deals and shop owners looking to grow their business by acquiring other shops, or those simply just entering into a succession plan. But one thing that everyone seems to agree on is that there’s no reason for shops to feel pressured to sell if they don’t want to sell.

Although “the environment with consolidation is very bright,” DiFrancesco insists, “The independent shop really has a place in this environment. It may be a different place, but I think it’s a very important one.”

So, how does one know if they are ready to leave it all behind?

There are many important factors to consider before deciding to exit the business, beginning with how one will go about the process.

“The first thing to keep in mind is what your strategy is going to be,” says Gay. “Are you going to do it alone, or are you going to get someone to help you? If you do it alone, you have to come up with your own internal strategies on how to handle it, specifically confidentiality and how you are going to look at what the different buyers are and how to make sure you don’t leave money on the table. If you decide you want someone to help you, you need an understanding of what the business is worth versus what you can get for it. That’s a big disparity. You can probably get a lot more for it than what it’s worth in a lot of markets, especially in the northeast. It’s just getting red hot with consolidation, and more and more buyers are entering the market. The important part is not leaving money on the table, and that is easy to do if you don’t know what you are doing.”

Selling is not the only way to exit, according to DiFrancesco.

DiFrancesco recommends shop owners consider what they want life to look like after transitioning away from the business. “If they don’t have a picture of what that looks like, it makes it difficult to be able to structure a plan according to what they want. The starting point comes down to figuring out if they want to fully exit or still be involved but not with the day-to-day operations as they want the flexibility to travel, play golf or go hunting. Once they know what that life looks like, we can start to build out the different ways we can structure a transition plan.”

White concurs, offering a personal anecdote related to a “challenge after the sale that a lot of people don’t talk about:

“After I sold my shop, I struggled to figure out who I was for a couple years. I grew up in the industry, and that’s what I was: a shop owner. But suddenly, I wasn’t a shop owner anymore! I really struggled with my identity for a while, and that’s something everyone should be aware of. When I’m working with a shop owner who intends to sell, I immediately back them off by one day, so they spend only four days per week at the shop. Then, we discuss how to fill that time with things that will get them excited about enjoying life and help them see who they are beyond being a shop owner.”

continued on pg. 18

Cover Story

continued from pg. 17

According to Newton, shop owners interested in getting out of the business should begin by taking a look at their shop to see what is most valuable. Is it the business itself or the owner? If the owner is the most valuable part of the business, a lot of work will need to be done to change that so the business can be sellable. “They will need to build the business so they – the shop owner – won’t be required to be there.”

“The business has to be able to operate without the owner; you cannot be a key component to the business’ success,” White insists. “If the shop owner is also the lead technician, service advisor and HR, the business isn’t worth as much as it would be if the shop operated effectively without you sitting in the office. The owner cannot be directly tied to the day-to-day operations of the shop because that creates a situation where the value of the business is irrevocably connected to that person’s presence.”

Instead, the shop’s staff has to be trained to know all the processes, policies and procedures. There should be an operations manual outlining how the business functions so it can be profitable “because people who buy businesses want the ability to profit,” Newton says, explaining if one is able to walk away from the business for 60 days and it’s still functioning, the business will survive. If not, it is not the time to sell.

Branding is another value-added consideration that owners should evaluate before signing their shop over.

“If your name is in the shop’s name, that may have a detrimental effect…or if you have a great reputation, you need to decide if you’re willing to leave your name on the shop when you’re no longer there,” White points out. “Their quality and customer service will be associated with you if your name remains on the building, and no one wants their name tarnished based on someone else’s actions.”

Of course, profitability isn’t the only factor impacting a shop’s value. The assets being sold with the shop make a huge difference in the price tag you can place on the business. Buyers will get more use out of well-maintained (or new) tools and equipment, and they’re also going to consider the condition of the shop facilities and whether additional investments will be necessary before they begin operating.

Typically, the real estate associated with the shop emerges among the most important assets to consider.

“Will the purchase include real estate or not?” White questions. “If you currently rent the land your shop is on, the lease options will factor into the value someone is willing to pay. If you own the real estate, hopefully it’s been split out into a separate holding company or realty trust that rents the land to your shop because that protects you from a liability standpoint, but it also allows you to sell the business and maintain the property for additional income.

you can structure the real estate to be able to create a fair distribution and maintain that family harmony.”

Sometimes, shop owners tarnish their ability to turn the highest profit in a sale by making some common mistakes, such as neglecting to maintain confidentiality. Alarming staff by talking about their exit plans too early in the process can be detrimental to the value of the business.

DiFrancesco suggests waiting until all one’s ducks are in a row so that conversations don’t begin prematurely. “You’d want to go to the successors first and then talk to your employees once the plan is determined and you know what direction things will go in.”

“You don’t want to create unnecessary anxiety, turmoil or loss of production with something that may not occur,” Gay emphasizes the need to make sure the time is right before announcing your plans. “The announcement should be thoughtfully decided upon between the buyer and seller.

“It’s a personal relationship,” she continues, regarding the seller’s relationship with his or her team. “Those people made him or her who he or she is. I was close to my employees. I still am and talk to them often. The buyer is buying your people, what you created, and it’s very important it’s done thoughtfully.”

“Hopefully you have already planted the seed for them,” advises Newton as he reiterates the importance of the business being able to operate without the owner present daily. “When you aren’t the main person anymore, it makes it easier on your staff to tell them you plan to retire.”

Maintaining focus on the outcome can also present challenges as the exit gets closer.

“Clients get really excited about the sale, but they forget to keep their eye on the ball,” White warns. “The business has to continue moving forward profitability, and it doesn’t take long for things to go sideways when you’re not paying attention. You need to stay focused on your operation until the day it’s not your operation.

“You need to put your patience hat on,” he continues. “There will be struggles and delays, and you can nearly guarantee that it’s going to take longer and be more challenging than you think it should be…but don’t count your chickens before they’ve hatched! It’s common for a seller to get excited in the nth hour and buy that $300,000 motor home because they know they’ve got $1 million coming in. But then the deal falls through. It’s never a good idea to spend money before you have it.”

Ultimately, it’s about being able to walk away from one’s business in the most profitable manner one can.

“At the same time, if the business is worth $1 million, but you’re retaining the real estate, it’s going to be more difficult for the purchaser to get a loan since there’s no real collateral,” he continues. “Are you willing to hold the mortgage note? There are definitive benefits to that as well; you’ll collect more income from interest on the loan, plus you’ll typically pay less in capital gains since the money you’re receiving is spread out over a longer period.”

DiFrancesco often finds that sellers keeping the real estate as an income stream works best for all parties. “If you go to a third party, especially with consolidators, they want the owners to maintain the real estate, and that remains a cash flow stream. On insider sales, I like to see them hold on to the real estate as an income stream, but also if the owner has children who are not involved with the business, the real estate can be part of their legacy. I try to maintain that family unit, so if there is one child getting the business, the others don’t feel slighted and

Many may not be aware of the true value of their business, so it’s important to have an assessment done as a first step. “You should always do a valuation, and not just of the value of the business but what your free cash flow is in the business,” suggests DiFrancesco. “That’s what a consolidator or a third-party buyer will look at since they want to buy a business that’s profitable. With an inside transfer, you can utilize free cash flow to fund that transition, so getting that valuation as soon as possible is a key first step.”

Newton emphasizes the role that having everything properly documented – from wills and a trust, tax information, operation manuals, etc. – plays as it will make the business attractive and more valuable. “The more documentation you do today, the more profitable your business becomes in five, 10, 20 years.”

“You get one chance to do this, so you don’t want to screw it up,” Gay summarizes. “Make sure you are doing all the right things, and make sure you don’t leave money on the table. It’s so easy to do that if you don’t know what you are doing…you can do so without even knowing that you did.” TXA

Buying a paint booth is a huge investment, and there are many factors to carefully consider before selecting one Will the booth work well in a region where there’s a ton of humidity and with drastic changes in the weather? How long do you think the booth will last and will it require a lot of maintenance? Will your painters be comfortable using it ever y day and finally, will the company making the booth provide solid training and reliable customer ser vice?

To answer these questions before acquiring two Chronotech spray booths and a prep deck from USI ITALIA back in 2004, Collision Center Manager Kevin McIllveen at Russell & Smith Body Shop in Houston, TX spent six months studying the market He was looking for the best booths that matched his needs to use in a brand-new 36,000 sq ft facility that the company built from the ground up

Mcllveen, age 56, entered the industr y more than three decades ago as an estimator and has worked for Russell & Smith Body Shop since 1993 His goal with his new spray booths was to improve the efficiencies in his paint department and to accommodate his production, he said, while simultaneously saving time and energy if possible

The vetting process was arduous but worth it in the end. "We did our research so that we could make an educated decision," he said "I went to NACE two years in a row and talked to literally ever yone and asked a lot of questions We knew that this was going to be a ver y significant investment, so we took the time to perform our due diligence to cover all our bases We invested in their prep stations as well, which was another good decision, because my guys can work so much faster and effectively with five different places where we can spray We put a curtain up in the prep booth that provides us two additional spaces that are heated and properly ventilated So, when we are really jammed, we can handle the workload and maintain our cycle time without interrupting or slowing down our production "

After using them for a ver y short time, Mcllveen could clearly see that his Chronotechs were more than capable as they quickly became a centerpiece in his new, high-end, modern shop

"We have four paint teams here, consisting of a painter and a painter’s helper and we consistently log approximately 600-700 paint hours weekly,” he said “We switched to waterborne paint when we opened this facility because we want to provide a healthier climate for our employees and the community as a whole ”

we push these booths and they never let us down ”

Any issues that Russell & Smith Body Shop have encountered with their USI ITALIA booths have been rare and far between But Mcllveen feels good knowing that if called upon, the company will respond and find solutions promptly “If you do your scheduled maintenance and keep ever ything clean, these booths will last you 30 years and maybe even longer The issues that we have encountered with the Chronotechs have been minor and quickly solved, which is impressive when you think that we have been using these booths daily for the last 16 years. I tell people that these booths will be here long after I’ve retired!”

Why was Mcllveen able to improve his numbers by simply adding two USI booths? “In the end, it all comes down to their airflow because we never need blowers or additional air to cure these vehicles The fans in these Chronotechs are exceptional because they feature variable speeds, so we can switch depending on the parameters of each job. Our painters are producing an impressive product day after day, so these booths are saving us both time and money We paint an average of 400 cars ever y month, so

After training provided by USI ITALIA, Mcllveen’s painters were able to start spraying after one day, he said "The Chronotechs are designed to work with waterborne paint, which makes it easier for our painters to do their work After a ver y short time, all of our guys were comfortable and the results were consistently exceptional.”

Mcllveen is also impressed by the Chronotech's sturdy construction and durability "Some booths are just a box, but these are wellbuilt," he said “I know, because I've seen them all and there isn't anything like a USI ITALIA booth "

His career in collision repair industr y has been a great experience and products like his USI ITALIA spray booths and prep station are a part of that, he said “We haven’t had to furlough anybody here and that’s because we value our people and, in the end, our Chronotechs are part of the team ”

Ask The Expert Journey to Mandatory Right to Appraisal in Texas Continues

by Robert L. McDorman

Dear Mr. McDorman,

I own and operate a collision facility in southeast Texas. I read last month’s editorial concerning the Texas Watch “Impact of Auto Appraisal” analysis, the Office of Public Insurance Counsel Report to the 88th Texas Legislature and December 2022 Texas Department of Insurance 2022 Biennial Report. Additionally, I went back and reviewed each of these reports. These are consistent with what we are seeing in our operation daily, and fortify the absolute need for mandatory Right to Appraisal in all motor vehicle policies. More and more of our clients have an additional amount due on top of their deductible when they pick up their vehicle. It almost seems to us, at our shop, like this is by design, and the carriers are reducing their liability more often than not by refusing to cover required procedures and operations. We agree with you that the Right to Appraisal is the guardrail for proper indemnification. What is the next step you will take in the battle to secure mandatory appraisal rights in Texas motor vehicle policies?

Thank you for your comments and question. Working through policy holder issues daily in our office, as well as underindemnification issues with our clients’ insurance carriers, one would think the mandatory Right to Appraisal in motor vehicle policies would be a shoo in; however, it is not. It is surprisingly contested and complex. I was hopeful to be in a position this month to clearly write about what, in my professional opinion, is the best next step to secure mandatory Right to Appraisal in all Texas motor vehicle policies, but I am not. Please forgive me. I have developed a good understanding of the direction we need to take, but there are several additional lawmakers I need to speak with before I can write about the next step. I hope to have this in place before next month’s editorial.

It is my unwavering position that limiting or removing the Right to Appraisal in a motor vehicle policy will be the nail in the coffin for safe roadways for us all. As we move forward with this journey to secure the mandatory Right of Appraisal in motor vehicle policies, we need to continue to educate all parties involved about the consequences of its removal. The more complex our motor vehicles become, the greater the need for the repair methodology to be determined through the Right of Appraisal by repair professionals when a dispute arises.

As I have noted in several past editorials and public speaking engagements over the years, as a stark consumer advocate, Auto Claim Specialists has gone to agencies with well-documented facts seeking to help our clients who have been harmed by their insurance carrier and to bring awareness to these systematic atrocities. At each turn, we were told the only help was to seek legislation or a finder of fact. I believe now that the State Farm verdict is a matter of law, lawmakers will take note and see this as a time for change.

Robert is a recognized Public Insurance Adjuster and Certified Vehicle Value Expert specializing in motor vehicle-related insurance claim resolution. Robert can be reached by phone at (800) 736-6816, (817) 756-5482 or via email at AskTheExpert@autoclaimspecialists.com.

The under-indemnification in total loss and repair procedure claims in Texas is rampant. Besides the higher settlements for total loss clients averaging 28 percent above the carrier’s undisputed loss statement, we have also reduced clients’ out-of-pocket expenses on repair procedure disputes almost daily in our office. These underindemnification percentages are staggering and harmful to Texas citizens.

The spirit of the Appraisal Clause is to resolve loss disputes fairly and to do so in a timely and cost-effective manner. Invoking the Appraisal Clause removes inexperienced and biased carrier appraisers and claims handlers from the process, undermining their management’s many tricks to undervalue the loss settlement and under-indemnify the insured. Through the Appraisal Clause, loss disputes can be resolved relatively quickly, economically, equitably and amicably by unbiased, experienced, independent third-party appraisers as opposed to more costly and time-consuming methods such as mediation, arbitration and litigation.

In today’s world regarding motor vehicle insurance policies, frequent changes in claim management and claim handling policies and non-standardized GAP Addendums, we have found it is always in the best interest of the insured or claimant to have their proposed insurance settlement reviewed by an expert before accepting. There is never an upfront fee for Auto Claim Specialists to review a motor vehicle claim or proposed settlement and give their professional opinion as to the fairness of the offer.

Please call me should you have any questions relating to the policy or covered loss. We have most insurance policies in our library. Always keep in mind a safe repair is a quality repair and quality equates to value. I thank you for your question and look forward to any follow-up questions that may arise.

Sincerely,

Robert L. McDorman TXA

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publish a list of included or excluded items specific to color blend.”

Audatex followed suit with a July update, ultimately providing users with the ability to adjust refinish labor time to specify a value between 50 and 150 percent in October, and by the end of 2023, the IP had updated its Database Reference Manual to remove its previous 50 percent blend formula guidance which was replaced with the following:

“Audatex refinish labor is based on the use of new and undamaged panels. Audatex Estimating does not provide a standard labor allowance for blended panels as this requires the estimate preparer’s judgment, expertise and consideration of the unique requirements for each repair. Determination and assessment of labor and materials necessary in the blending process is best provided by the estimate preparer during the estimate preparation process. To assist the user, profile settings allow for customization to enter a specified blend percentage, as necessary.”

“They didn’t just update their system based on our research; they conducted their own research and based their system updates on their findings,” Schulenburg notes an

important factor related to the IPs’ updates. “These changes are based on their decisions and are NOT the result of the SCRS blend study; that study was merely the catalyst that prompted them to re-evaluate their own information.

“This is an important fact for shops to understand and use as a talking point because an insurance company doesn’t need to believe what SCRS found during our blend study…those well-documented findings were persuasive enough that the IP re-evaluated its own studies and came to its own conclusion.”

Acknowledging that some shops have reported challenges in conversations with bill payers around blend times, Schulenburg suggested that repairers might find it valuable to present insurance carriers with documentation related to the IPs’ responses, including trade press articles on the topic, as a means of furthering the conversation. “When we have representatives from the estimating providers who share that they are aware and have been aware of this being an issue long before the SCRS blend study ever occurred, that’s probably useful in your dialogue.”

In fact, Solera Product Management

Senior Director David Davoodi told industry news outlet Repairer Driven News in November 2023 that Solera was already aware of the concerns SCRS and other repairers had for months – if not years! – prior to the release of the results of the association’s blend study results.

Schulenburg encouraged repairers to be conscientious that they spend time understanding the variables within their own process at their facility and use that to present data in a meaningful way.

“It’s easy to state that you’re doing something because of what the blend study says, but it fails to really express how the research relates to what is happening in your repair process and tasks that your technicians are already performing in your repair facility. Some carriers may push back because they don’t recognize SCRS as an entity that does time studies, and that’s fine; we’re not. But the IPs didn’t make those changes just because SCRS did the blend study. The study opened a conversation that led them to do their own research and come to their own conclusions, and noting that could lead to a very different conversation.” TXA