The Women’s Industry Network (WIN) hosted “Industry Changes, Challenges & Opportunities in a Post-COVID World,” part of its first ever hybrid Educational Conference, held May 2-4 online and in Greenville, SC.
Hosted by Jamie Shakelford, director of sales strategy and enablement for Caliber Collision, the discussion looked at how the industry can move forward, from many different points of view, including insurance companies, rental car companies, parts and materials suppliers, OEMs and auto body shops.
The panel discussed supply chain and staffing issues and trends that have increased cycle times, leading to frustration at every point of the repair process, down to the customers.
Brenda Hewitt, Guaranteed Repair Network manager for the Western U.S. for Liberty Mutual, said the pandemic put a lot of pressure on an industry that was already feeling a lot of pressures.
“Everybody was worried for several months [at the onset of the pandemic],” Hewitt said. “Fast forward to last summer, and not only do we still have jobs, but we have more than we can do. Now we’re looking at inflation.
“It’s about how to work together and not point fingers at everyone in the industry,” she said.
“Customers that maybe before [the pandemic] came in scared and frustrated but friendly, more and more are coming in angry and looking to blame somebody,” Hewitt said. “We all have to empathize and understand that everybody’s in a different spot.”
Mary Mahoney, vice president of the global replacement and leisure team for Enterprise Holdings, said employees at rental car branches are seeing the same frustration in customers.
In the first quarter of 2022, the average length of rental for collision repair customers---including drivable, non-drivable and total loss claims---rose to 18.2 days, a nearly five-day increase over the first quarter a year ago.
Mahoney said that is partly driven by the number of large SUVs and trucks people are buying and crashing; while the size of the vehicles increases the severity of the damage, their high actual cash values make it more economical to repair what would be a total loss on a less expensive vehicle.
Angie Babin, vice president of supply chain for Caliber Collision, said there was already a shortage of technicians before COVID, but now everyone is recognizing it.
“The labor shortage also increases cycle time on receiving parts and materials, unloading parts, delivering them; we’re seeing [labor shortages] across the board,” Babin said. “We need to sell to people why they need to come work in this industry.
“Market to young people that it is such a great career,” she said. “It’s not grease monkey shops anymore. It’s technology. Help them see the money they can make.”
Genevieve Dombrowski, senior vice president of human resources for LKQ Corp., said the pandemic also contributed to a marked exit of women from the labor force, as women left careers to stay at home when kids’ childcare providers and schools closed.
“Two million women exited the workforce in the last two years, and they haven’t come back in droves,” Dombrowski said. “We need to be more flexible with work times and shifts. I think it will take disruption to get women back.”
Laura Kottschade, operations manager for Jerry’s ABRA Auto Body & Glass, in Mankato, MN, said her shop used to get experienced technicians seeking jobs. Now the shop gets a lot of young students who need training to get them to a level where they can replace a quarter panel.
“That’s a huge thing that has been impacting everything,” she said.
Turning to supply chain issues, Denise Kingstrom, BASF’s supply chain director for coatings solutions in North and South America, said while demand for collision repair materials initially declined, there have been big jumps in demand since, which the logistics side has not been prepared to handle.
“Collaboration is very important,” she said. “Everyone is experiencing burnout---what’s going on, when is it going to be fixed? We are still seeing challenges as demand is increasing.”
Kingstrom said all aspects of the chain have been affected, from raw materials to transportation to production facilities.
“We have to adjust by working with the other partners in the chain, to see where you can flex to address some of those challenges,” she said, offering examples of combining shipments or using rail service instead of trucks.
“Our job is to avoid an impact to the customer, to make sure there isn’t a backorder and that material is there on time,” Kingstrom added. “It’s a lot of extra manual work, that touches on every order.”
Hewitt said, from insurers’ perspective, some services that were once considered “cost of doing business”---like washing a customer’s car---are now being charged as line items by body shops, and insurers can’t just pass those new costs on to policy holders.
“We are trying so hard to cut expenses and do more digitally so we don’t need to have so many people manning a call center,” Hewitt said. “We are using technology for straight-through processing, getting pictures, having conversations with customers and using really qualified shops to do those repairs.”
Babin said the supply chain issues are putting pressure on collision repairers.
“They have to take vehicles out in the middle [of the repair] while waiting on parts,” she said. “Parking lots are full, and the stress inside the shop has become very high.”
Babin said some of Caliber Collision’s suppliers have helped find alternatives when they can’t fulfill an order.
“It’s unprecedented, to say, ‘You’re going to have to use my competitor’s product, here’s a couple I suggest,’” Babin said.
Kottschade said her shop has seen an increase in supplements after tearing down vehicles, due to heavier hits.
The shop has two vehicles that have been sitting in it since December---a Ford F-150 and a Hyundai---waiting on parts they cannot be driven without.
Other vehicles, waiting on parts not essential for operation, are reassembled as much as possible, returned to the customer and then brought back to the shop when the part finally arrives, she said.
“But then you have to disassemble them again, re-scan, charge again,” Kottschade said.
Kottschade said she calls around looking for parts every day, driving up costs for the shop because it doesn’t get a discount if it can’t order parts from its partner vendors, and it might have to pay higher taxes and shipping fees depending on where the part is coming from.
“It’s like a Jenga game, trying to figure out production,” she said.
It also contributes to customers’ frustration, she said, but that can be mitigated by being honest with them about how long they might have to wait for a part.
“Usually they’re pretty good if you’re straight up with them from the get-go,” she said. “I tell insurance adjusters to tell customers about supply chain issues.”
Hewitt said her company, Liberty Mutual, is doing better at getting that message to customers at the first report of loss, as well as increasing communication with shops to figure out timeline estimates.
“Those are tough conversations to have with customers about timelines on repairs,” she said. “If you have them upfront and involve them, you are so much farther ahead in the game than if they don’t find out until day before the rental [coverage] runs out.”
Jake Rodenroth, North American body repair program manager for Lucid, said the electric vehicle start-up’s body repair network is more focused on raw materials, because it makes a lot of its parts in-house.
Mahoney, of Enterprise, said demand for rentals is still rising. The company has developed a robust fleet preservation strategy to make its vehicles last longer, with a heavy investment in maintenance and hiring detailers instead of preppers to clean the cars between customers.
But the key, she said, is talking to partners.
“Don’t look for just one silver bullet to make it better,” she said. “Break it down---how we communicate with shops, insurance companies, customers.
“We’re all in this together,” she said.
“I agree 100%---and it’s all your fault,” Hewitt said, eliciting a laugh from the audience.
Abby Andrews