When our first interview with Jim Huard, owner of Painters Collision Centers' two locations in Arizona, was published in June, many shops supported his claims. But others were skeptical and claimed it’s impossible for a body shop to make a profit with DRPs in the picture.
Autobody News sat down with Huard recently to give him a fair chance to respond to the adverse feedback he received this summer.
Huard is a long-time industry veteran, operating and managing body shops over his 35-year career before becoming the new owner-operator of Painter’s Collision Center, along with his wife, Kelly Huard.
Huard began his career as a detailer, where he quickly grasped the business of running a shop. Huard has held various executive management roles for national MSOs, as a general manager, regional manager and VP of operations.
You received a fair amount of pushback after your interview first appeared in Autobody News. Why do you think that occurred?
It’s hard to say. I believe a lot of owner operators struggle with understanding their business. Saying you cannot make a profit while compensating your people well because you work with DRPs is just not true.
Many shops say they can't make any money being a member of a DRP, but you strongly disagree. What's your secret?
Learn your business first; understand your cost structure. I honestly believe that some folks should not own, operate or even be in this business, period---with DRPs or not. It seems like the same people saying that DRPs won’t work for them are the people who always fight everything. Why is the carrier that is paying for the repair paying for it in a DRP and a non-DRP environment? Why are they different because it’s the same carrier?
The only real difference is if I choose to give them concessions in exchange for bringing me more and more vehicles. They give us volume and we give them a break; it happens in all types of industries. If the prevailing rate is $62, for example, and I say I can do it for $58---that is a business decision.
Why does that mean I cannot pay a technician, estimator or GM a really good income? Why does that mean I cannot repair a car correctly? Explain it to me. I am at a loss.
If I say I can eat sandpaper and some products as the cost of doing business, and then bill for the products that are not, I feel it is a win. If a DRP says there is a paint cap, but I can prove that there was a significant difference and the cost was more via an invoice, how is that a loss? All the carriers want is a level playing field, with full transparency, and I say give it to them.
Example: I need sales at $400,000 monthly to sustain the company---meaning equipment upgrades, quality materials, etc.---and pay everybody well and above industry. So, if that costs $350,000 to do and the location profits $50,000, how is that bad?
I have seen greed in some owners that is the destroyer of their business. To sustain your business for the long haul you must pay well, upgrade with the times and offer great benefits, recognition programs and good bonus programs.
Do they truly believe that carriers do not want to indemnify their insured? I completely disagree. I think most of all the carriers out there want to retain their customers and want to pay what is the right amount for the vehicle. Nothing more and nothing less.
I often hear all around the industry that the DRPs want you to repair the car using a series of shortcuts, not do it correctly, cutting corners and so on. In my 40 years in this industry, I have never had a carrier ask me to do anything like that. Not one!
I have had quite a few of the carriers ask me why we need to do something, and we always explain everything in full detail with all of the supporting documentation. We are a VeriFacts company as well, so we definitely repair everything correctly.
Have we had a carrier ever ask us for a discounted labor rate? Yes. Have we ever had carriers ask to reduce a labor time? Yes. However, we have never been asked to short a repair, nor have we ever been asked to repair something that is not repairable. Not once. If we did, we would absolutely say no, of course.
We would certainly always be the first to whistle blow if we were ever asked this. So, it is my belief that as a business owner, it is up to me to guarantee that we do the right things and ensure quality OE repairs on each and every job.
Do you ever have to wrestle with an insurance company about the cost of parts, labor rates, etc., and if so, how do you deal with it?
The carriers I work with, both DRP and non-DRP, have been great. Do they ask us for concessions from time to time? Yes. Do we give it all the time? No. It depends on what it is.
All my DRP rates are in stone so the only time I am asked for labor rate concession is for the adjusted work we do. If our door is $62 and they ask for $60, we will give that to them in most cases. If they try and chop repair time, we argue, as we feel we are the experts.
We are not asked for labor time cuts often. But when we have been, we look at it and say, well what we wrote is fair, right and reasonable. We will not concede. We rarely get pushback.
Parts are interesting; we will not install a used quarter panel, period. We will not use substandard used or aftermarket parts either. If we are asked to do this, we immediately explain why this should not be done. aately I have seen more understanding and giving us what we need than not. Everybody knows the impact of a substandard repair.
Are DRPs attracted to working with you because you have a reputation for making it work to where both parties are satisfied?
I would say they want to work with us because we perform, we repair cars correctly, we communicate and we are not confrontational. We are kind in our business practices. We bring our partners in for training and allow then to use our locations as training facilities for their teams.
We have seen a large interest in this. We recently conducted scanning and calibration classes for a large carrier. We brought in the vendor we work with and did an on-site scan and calibration, had a wonderful PowerPoint presentation. Everyone left feeling empowered.
Ed Attanasio