There has been strong media coverage recently regarding the perilous status of the collision repair industry and the Collision Repair Assoc (CRA) has profiled the issue many times. The problems are many, and it’s said that the situation is approaching “the perfect storm”. Skilled labour shortages are not unique, but in the case of the panelbeaters and paint refinishing trades one of the contributing factors has been under-investment in training due to the sector’s marginal profitability, and lack of youth interest in the industry. Vehicle technology and construction sophistication has contributed to the problem, as has the failure of the big-brand insurance companies to recognise & remunerate the complexity and time required to repair modern vehicles to manufacturers’ specifications.
The sector’s problems are not unique to New Zealand, what happens in Australia immediately follows in NZ. The distressed state of Australian panelbeaters has been profiled extensively. Recently the Chair of the Australian Motor Body Repair Association (AMBRA) Morry Convasce, announced his retirement from the Board and from the industry entirely. In a bold move based on ethics and dignity, he closed LP Body Works Pty Ltd a family owned firm of panelbeaters and paint refinishers since 1966. It is with a heavy heart that Morry says “enough is enough”. When queried he explained that he will not compromise customers’ vehicles regardless of how much pressure major insurers place on him to accept underfunded activities. Morry is regarded by most repairers across Australia as one of the country’s most business savvy and technically capable repairers. He has been a staunch advocate of the Motor Vehicle Insurance and Repair Industry Code of Conduct and its push for improved industry standards, and is saddened that the Government has not yet mandated the proposed code.
Morry says he is pleased that recent advances should help panelbeaters to be paid fairly when returning vehicles to manufacturers’ specifications, but he is concerned that successive governments have not been sufficiently resourced to handle the huge number of mediations and/or determinations that have arisen. The only answer is for government to legislate the panelbeaters industry code and send a powerful message to insurers that they must play fair. Whilst remaining philosophical, Morry is resolute that he, like many other good panelbeaters and business operators, will not ‘cross-the-line’ and accept compromised or underfunded insurance work. “These recent determinations are a little too late for me,” he said. Morry closed by saying he is very disappointed that politicians and senior bureaucrats have not acted quickly enough to regulate the panelbeaters code. “I think they thought my advice while Chair was about crying wolf, despite them having all the proof they needed to act,” he said. The panelbeaters sector has thanked Morry for his tireless efforts over the eight years of his Chairmanship. They said that “at all times, he proved himself to be ethical and thorough and he instinctively fought the good fight for his many colleagues, panelbeaters, and the wider collision repair industry.”
Meantime, back in NZ the panelbeaters sector is also in a crisis of skilled labour and escalating repair complexity that the big-brand insurers have fallen well behind on recognising and remunerating. Most collision repairs are paid at the lowly rate of $60 – $70/hr – barely enough to cover wages and rent and keep the doors open. This is in stark contrast to dealership mechanical service centres where the market rate averages around $120/hr. Both trades require similar levels of investment in labour, training, equipment and premises. Industry observers are clear that there is no justification for the disparity that has accelerated over the past decade and decimated the numbers of panelbeaters now operating in NZ. While big brand insurance company profits escalate, dependent small business are wiped out, and customer service delays have quadrupled in a decade. The CRA continues discussions with the insurance sector in the hope of addressing the crisis.
Mike
You probably “mean well” by this relentless promotion of the wo’s of the panelbeating industry but as you say “enough is enough”. Labour rates for any industry are controlled by market forces and the fact that good quality panel shops accept the offered rate proves the point. It is in their control to decline the business and would if it was uneconomic. Blaming insurance companies for following the market whether its here or Australia is misinformed. Meaningless actually. Margins might be “tight” but most industries are these days so they can accept it or do something else if it’s not worthwhile. The trade might be in full moaning mode but mass close downs are not happening. Don’t mean to sound “negative” but just stating the facts.
Hammer
NOT BIASED ARE WE!
SPOKEN LIKE A HARDENED ASSESSOR. I CAN PROBABLY EVEN GUESS WHO YOU WORK FOR!
MAYBE HAVE A GOOD THINK ABOUT THE HUGE POWER INBALANCE HERE MATE THEN TELL US ITS ALL “FAIR”. NOT.
WE ACCEPT THE CRUMBS OF INSURANCE PROFITS BECAUSE WE NO LONGER HAVE A CHOICE. UNLESS YOU CALL CLOSING DOWN THE SHOP A “CHOICE”. SOME GOOD SHOPS HAVE HAD TO DO THAT AND BUILD A NEW CAREER FROM THE GROUND UP AND FOUND THAT THEY’RE BETTER OFF OUT OF IT. AND “FYI” MASS CLOSE DOWNS HAVE HAPPENED OVER THE LAST 10YRS AND IT WILL KEEP HAPPENING UNTIL RATES MOVE ABOVE $100/HR TO MATCH MECHANICS.
END OF STORY.
collin
If you are who i think you are Mike you are the worst assessor they have and you need a sacking! You are a nightmare to deal with and respected by nobody!.
Crash Management
hello again Mike and thanks for following our blog, we’re aware that you’re a regular reader. We have no issue with a frank exchange of views or opinions regardless of how harsh. It would seem that you’re not invested in the business of collision repair though previous comments indicate you may be involved in the insurance sector so you’ll be familiar with the increasingly difficult trade environment. It would seem less than neutral, or perhaps somewhat naive, to assume that only market forces are at work in this dynamic particularly as the leverage and balance of power are so uneven between these two sectors – it is a unique situation and not at all the standard supplier/customer relationship. Insurance companies come in all shapes and sizes though and we do acknowledge that some are quite reasonable in their negotiations, and also genuinely appreciate the value the supply chain delivers.
As always we’re keen to hear any comments from the collision repair sector and welcome all feedback.
Crash Management
Suze
Here’s another one for your collection Crash – whoopwhoop – another young women getting recognised in the trade. Shame it’s in Aussie but great work all the same. Well done first year apprentice Bella Turrise from BodyTech! Winner of the Allianz scholarship. https://www.nationalcollisionrepairer.com.au/auto-scholarship-awards-initiative/?utm_source=The+National+Collision+Repairer+E-Newsletter&utm_campaign=fb0b89ca1e-E1_Weekly_Newsletter_15_Jan_22&utm_medium=email&utm_term=0_01bfeaeb33-fb0b89ca1e-169236685&ct=t(E1_Weekly_Newsletter_15_Jan_22)&mc_cid=fb0b89ca1e&mc_eid=3d2fb294a1
Allianz has teamed with AAPR’s Auto Industry Team which includes leading Industry Stakeholders to create a unique Scholarship opportunity that rewards and supports Apprentices who have successfully completed their first year on the job. The Allianz scholarship initiative is focussed on addressing our skills shortages in the automotive collision repair industry targeting Autobody Repair and Vehicle Spray Painting Technicians.
Paul Martin, National Manager Assessing Strategy, Allianz, announce that the first recipient of the Allianz Auto Scholarship Award is Isabelle (Bella) Turrise from Bodytech Automotive. “We are delighted to provide Isabelle with the scholarship award and offer our support to her apprenticeship. As a major industry stakeholder, we understand the significant role skilled trades people play in the sustainability of the motor repair industry. We would also thank our business partners Bodytech Automotive and the Australian Association of Progressive Repairers for their contribution to making this initiative a success”, said Martin.
The event was attended by the Hon. Ray Williams NSW Minister & local Member for Castle Hill, Trevor Lawler Allianz, Greg Preston AAPR, Peter Christodoulou Owner Bodytech Automotive, Carl Tinsley Bella’s TAFE teacher and local Future Leader of the Industry, Maxine Colligan. “It’s such a thrill to see such a dynamic young woman be recognised so early in her career. Bella has demonstrated the drive and the talent required to be successful and she is clearly ‘one to watch’”, said Tinsley. “In addition, Peter at Bodytech has a strong track record of developing young apprentices – he too is a credit to the industry”.
Bella was presented with a range of spray-painting equipment supplied by The SAPE Group, tolls and equipment that fits best with the high standard of quality repairs and refinishing carried out at Bodytech Automotive.
“This is just the first of many such initiatives that we will support in the coming months”, concluded Preston.
Wayne
There’s more on this topic in PanelTalk again on the opinion page. The Australian Motor Body Repairers Assoc have warned the trade to be vigilant when considering contracts offered by car insurance companies. The article says members are complaining that they are being pressured to sign insurance company strict contracts with tough conditions. They recommended repairers get legal and financial advice on contracts before signing to make sure there are no unfair contract terms and conditions. We know it’s the same in New Zealand and the same dominant power affects the survival of the trade. Rex’s advice is good of course but it’s impossible for any shop to refuse insurance contracts or insurance work because it accounts for 90% of everyone’s business. The Australian regulators are looking at the dominance problem and the commerce commission should be doing the same thing here. Is anything happening with this?
Lachlin
Wooow man just pay them fair! Insurance is loaded just like banks right. Soooo expensive even if u never have any crash.
Jenni J
Insurance companies are making record breaking profits again this year. No surprises there and we know who’s paying for it. Customers are being charged more and more and receiving less and less. Its proved again with another court case against IAG the big Aussie owner of NZI and State and AMI and Swann Insurance etc etc. They’re being charged with selling “worthless” add-on insurance through car dealerships. Pleading NOT GUILTY of course but say they’re already refunding 38,000 customers more than $22 million dollars. Hmmm sounds quite guilty to me. Anyway here’s the full story if you haven’t seen it yet people. Hopefully you don’t do any accident management for Swann Insurance…
http://www.insurancenews.com.au/daily/iag-faces-class-action-over-worthless-add-on-cover?utm_medium=email&utm_campaign=Daily%20insuranceNEWScomau&utm_content=Daily%20insuranceNEWScomau+CID_8c90dc54f06221faea2e1a636b9c0dcf&utm_source=EmailCampaign&utm_term=IAG%20faces%20class%20action%20over%20worthless%20add-on%20cover
Reg
News flash! The Aussies have just shut down the monopoly control of the big insurers that own and operate their own branded shops or try to force customers into their tightly controlled networks. Its been ruled illegal and will STOP. it all came out in the Collision Repair mag yesterday so if you haven’t sen it here’s the link including the expose on substandard Vero SMART shop repairs. They don’t name names but we know who you are. and we’ve known for years there’s a whole industry sprung up to FIX the SMART repairs. Now there’s 3 SMART shops in NZ it will be interesting to see what happens to them and the new NZI owned mega panel & paint shop in south Auckland. Keep your eye on that one Crash Management! Enjoy the read.
https://www.nationalcollisionrepairer.com.au/landmark-ruling-puts-choice-back-into-motorists-hands/?utm_source=The+National+Collision+Repairer+E-Newsletter&utm_campaign=e0b1f7f458-E32_NEWSLETTER_20_08_2019&utm_medium=email&utm_term=0_01bfeaeb33-e0b1f7f458-169236685&ct=t(E32_NEWSLETTER_20_08_2019)&mc_cid=e0b1f7f458&mc_eid=3d2fb294a1