Nason

In recent months, the spread of COVID-19 left countless shutdowns in its wake. The responses have varied across the United States. At the beginning of May, several states began reopening businesses. Body shops were deemed an essential business since the beginning of the coronavirus pandemic. However, with the coronavirus simply not fading away, collision repair facilities need to prepare their business for the new normal.

Greg Smith, owner of Boruske Brothers Collision Centre in Dayton, Ky., has remained open at full capacity with his shop since the beginning of the pandemic. He and his team are gearing up for more business for the $1.5 million body shop.

Mike Ralston, president of the Iowa Association of Business and Industry, shares advice on how a body shop can successfully handle various reopening directions. Ralston’s background is in corporate taxation and public policy. Iowa is one of the states that began opening its retail stores in certain counties in early May.

 Both Smith and Ralston share their tips for small businesses to implement. 

What are the best practises for a business to navigate the coronavirus?

Businesses want to make sure to keep their employees safe and healthy. Make sure to deep clean the facility. Make sure that their employees wear masks. Other good practises include temperature screenings for each shift and to wear gloves. If there’s a way to do it, certainly try to keep employees six feet apart.

What are the challenges you’re hearing from businesses?

The biggest challenge is: What if you have a situation where you can’t keep employees six feet apart? Employers are doing a couple of different things. One, they might try staggered shifts so employees are working different times. Two, they might install barriers. I know of manufacturers installing barriers between workstations. They might reconfigure their production floor to provide more space.

If an employee is concerned about returning to work, how should employers handle that?

If you’re an employee that’s exhibiting symptoms of Covid-19, you need to talk to your employer. That dialogue is really important. In every instance I know of, employers want to work with their employees to keep them safe. Make sure they get the help and the test they need.

If they’re concerned, I as an employer would want to know that and want to find ways to have the employee come back to work.

What safety measures have you put into place while remaining open?

Our facility’s 10 000 square feet and we have a team of 10 here, so practicing social distancing has been fairly easy. We’ve implemented temperature checks with an infrared thermometer and all my employees are wearing masks and gloves. For customer vehicles, we’re disinfecting the car right when it comes into the shop and right before it leaves. The detail guy pays close attention to all the touchpoints of the car like the steering wheel, the gear shift, door handles and temperature control knobs.

Do you offer any online services to make it easier for customers?

Back in October, we started using BodyShop Booster and that’s been a huge help now. We typically pick up a vehicle and drop it off for the customer and, through BodyShop Booster, we’re able to send the customer a link for them to follow a tutorial. The tutorial guides them through taking pictures of the damage and sending them to the shop. We’ll write the estimate here and often send the estimate via email.

How have internal communications changed between you and your staff?

We still conduct a daily production meeting at 8:15 a.m. every morning but now we try to make the meeting shorter and have everyone stand around in a circle with distance between each other. When we’re all working, we definitely have increased the use of text messaging, emailing or assigning each other to tasks through our CCC management system. We see each other less throughout the day for updates on the repair.

I’ve made it a priority to tell my team that if they’re not comfortable with events happening, they can come to me any time so we can talk. We did have one employee with a wife who worked at the hospital. She got sick and had to be tested for Covid-19. So, while we waited for the test to come back, that employee was kept at home and quarantined.

Do you expect to see more business now that other stores in your state are reopening? 

During this Covid-19 outbreak, we have seen fewer cars in the shop but we’re only down in business by about 15 to 20%. We do predict that business will pick back up soon, since more people will be driving during the re-openings.

In South Africa, where can we get information to guide us about re-opening and safety in our workshops?

Occupational Health is a subspecialisation of the medical sciences dedicated to the interaction between the employee and the working environment and any consequences of such interaction, which include exposure to substances, processes and circumstances that may affect the employee’s health and safety. Companies without an Occupational Health Programme and not complying with the necessary legislation, are not only at risk, but are losing money

The International Labour Organisation (ILO), with South Africa being one of the 187 member states, is the only tripartite U.N. agency bringing together governments, employers and workers, to set labour standards, develop policies and devise programmes promoting decent work for all women and men.

These hazards are regulated in South Africa by means of various regulations under the Occupational Health and Safety Act, with responsibilities on both the employer and the employee. These include, but are not limited to, the Hazardous Chemical Regulations, Hazardous Biological Agents, Noise Regulations, Construction Regulations, Environmental Regulations, Lead Regulations ad Asbestos Regulations, to name a few.

In December 2019 the Ergonomic Regulations was published, which places a duty on virtually all industries, but are specifically relevant to the motor trade and more specifically the repair and maintenance aspects of the trade. Ergonomics include processes like lifting, pushing, pulling, extremes of reach, repetitive work, carrying, sitting, standing, movements requiring force, squatting, bending, awkward positions (abnormal posture), grip strength, abnormal posture. In some instances the Chemical Regulations might also apply to certain trades like body repair shops, with the use organic solvents like electrical cleaners (benzine, xylene, toluene, styrene) as well as with spray painting.

What do the experts say?

The COVID-19 coronavirus situation had poked holes in some approaches to the collision repair business. Collision Hub CEO Kristen Felder said historically, “business just kind of ran itself” for auto body shops. But collision repairers are now thinking about their companies, she said, describing repairers examining profitability and their past decisions.

Stressing that he meant no disrespect to that segment, Collision Advice CEO Mike Anderson noted that the repairers who laid off the most people or had to close down were multi-shop operators with, say, five or seven shops. He said he felt the repairers weathering the slump well fell into the “sweet spot” of 8 000-13 000 square feet and $250 000-$400 000 a month. They could deal with a volume decline. But MSOs doing $800 000-$1 million a month were “hit the hardest” and faced large overhead, he said.

He said he thought people might learn that “big isn’t always better.” You want to consider the optimal size of shop that can weather something like Covid-19, he said.

Felder said the issue boiled down to a repairer’s business model. Repairers focused on volume found “cash flow is gone” when that volume declines. The repairers still standing without layoffs “had an alternative business plan,” and some shops now were examining the idea of fewer cars with more profitability, she said. Felder said she was glad that the industry had a chance to talk about the “exposed weaknesses” revealed by Covid-19.

“I think it’s really, really important to write an accurate sheet,” said 3M’s Scott Peirce, another panelist. Given the business environment, if repairers weren’t writing accurately and collecting revenue based on repair operations and consumed materials, “it’s gonna be a big challenge,” he said.

Other Analysis

Ther are some interesting predictions on the economic recovery and the future of insurer-repairer relations. Anderson said he was concerned that repairers who had to furlough or lay off staff would be able to ramp up enough “when the dam does break.” He said many good shops were able to keep 75-100% of staff – such repairers would “do well,” he said.

Peirce predicted that miles driven would increase “very quickly” coming out of the Covid-19 pandemic and slump compared to miles driven after the recession  ast decade. He described it as the “pent-up demand to get away.”

3M automotive aftermarket division Vice President Dave Gunderson shared a prediction from Aranca that the automotive aftermarket would ultimately be down 12% for the year.  The second quarter would see claims down 50-70%, but crashes would rise in the second half of the year and reach 85%  percent of normal by Q1 2021, according to the slide.

Anderson predicted that the insurance claims process would be changed by the pandemic, predicting that virtual re-inspections will be the new trend, making photo estimates old news.

The Covid-19 situation might have also streamlined insurer-repairer interactions. Anderson recalled speaking to a non-DRP repairer who finds insurers approving estimates without issue. Some insurers might have realized they don’t need to micromanage the process, Anderson said.

Some repairers actually view the pandemic as “one of the greatest things that ever happened,” Felder said. They’re profitable, backlogged two weeks, and can get “virtual approval” quickly. A  $15 000 supplement might get approved with a couple of phone calls.

However, Felder did offer a warning about a potential change in insurer behaviour. She said “misconceptions” existed around the significance of news like Nationwide announcing it would close buildings and move to a largely work-from-home footing. Dismissing the news with “‘the insurance companies were already doing that’” overlooked part of the story, according to Felder.

Felder said that when Nationwide had adjusters work from home in 2006, it involved experienced personnel. Now, it’s the photo estimators repairers deal with on matters like supplements suddenly working from home – and that workforce might have less experience and higher turnover. It will be “clunky,” Felder predicted.

She said many insurers dropped their training departments last decade and will need to think about how to hire and support that level of staff working from home. An adjuster used to job shadow an experienced peer and could always ask a question after receiving more autonomy. But someone working from home doesn’t make a lot of phone calls asking questions; it’s an inconvenience, she said. She recalled managers would report “they waited too late to call me” of her team of remote estimators.

Shops in the interim will have to “deal with that adversity,” Felder predicted. Working from home also can be lonely, isolating and perhaps mean “a little PTSD,” she joked. Shops will bear the brunt and need training on how to handle a work-from-home insurer, she said.

I want to re-open my business, but I am not sure how?

Covid-19 provided a painful but important lesson for all businesses. It showed us that while we cannot always control what happens to our business, we can control the effects of it. Once it hits the business, how we react to it defines the business professionally and the business leaders personally.

Over the past few days we have reached out to some of our body shop friends to ask what advice can they give fellow body shops who are facing the return to work We asked what would you be imploring them to do if they asked for your advice? They said:

Involve the team on a regular basis before you restart  hear their thoughts and ideas so you don’t allow any negativity back into the business.

Ask your team if anyone wants to discuss staying on extended furlough or lay-off, or even consider voluntary redundancy – good or bad, your staff will not return the same.

Plan a stepped return to work – don’t just open the doors and invite everyone back in on day one, you won’t have the cashflow to sustain it.

Plan for holidays, training dates and anything else that takes them away from their productivity – plan from return date to the end of 2021.

  • Speak to your work providers to plan out a realistic projection of work volume. Just because you were on their network before, don’t assume you will automatically be back on it now.
  • Speak to your materials supply chain – if you are asking staff to return, the least you can do is show  them how they will be protected. Get extra PPE, products and processes in place before they return.
  • Look at the support costs – will you need the same will you need the same number of courtesy cars, recovery vehicles and other areas? Can you sublet this in the shorter term and rebuild later?
  • Speak to your parts supply chain – parts availability will determine changes required to the booking diary if parts are not available.
  • Involve your professional advisors – your bank and your accountant can objectively look at cashflow forecasts for the coming months and can cross-check the financial sustainability.
  • Look at everything in the context of the new normal anything that costs you money, made no money or caused time, stress or core business distraction, needs to go.
  • Ensure you have a plan B and a plan C – plan A’s don’t always work so you will need layers of contingency planning.
  • If it’s working, tell them it’s working– if your plans for returning to work and getting up to speed are working, tell your staff, tell your suppliers, tell your partners.
  • Say “thank you” a lot – thank the customers that waited for you while you were closed, thank the staff that stood by you, observed a safe lockdown and stayed healthy ready to return.

Finally, for those that will come through this challenge, imagine what you will do differently in future. What will your business go on to achieve when you and your team are not afraid of failure anymore?

What old challenges will no longer keep you awake at night because you overcame a challenge like the coronavirus? And remember, we’re in this together, we’re stronger together and we’re going to thrive once again together.