From training to productivity, shop population and work backlogs, here’s what’s happening
By John Yoswick
It’s easy to get so caught up in the day-to-day operations of your shop’s four walls that it’s hard to know how what your company is experiencing compares to trends in the greater industry. Here’s our annual round-up of stats related to collision repair industry and some of the broader trends that influence shops.
Is industry getting enough training?
How much ongoing technical training is enough for technicians? Is 12 minutes per week adequate? That’s the amount of training time, on average, that collision repair technicians receive each year, according to 665 shops that reported in a 2018 survey how many hours of formal training various categories of shop employees receive annually. The shops were asked to include training from I-CAR, paint companies, the OEMs or other suppliers in their estimate.
The survey found that estimators and administrative staff are receiving the same amount of training as technicians, a median of 10 hours per year. Although some shops are providing 40 to 60 hours of training per year, those shops are in the minority — less than one in 10.
The findings are an indication that most production workers in the industry are not receiving adequate training — and some none at all. Nearly one in 10 shops (8 percent) admitted that their technicians receive no training each year.
The Collision Industry Conference (CIC) “Education and Training Committee” in 2017 surveyed paint manufacturers and automakers about how much annual training they believe technicians should be receiving. Asian-vehicle manufacturers said technicians should get 16-20 hours of annual training (roughly 20-25 minutes a week, on average), while domestic vehicle manufacturers suggested 19-27 hours annually (up to 32 minutes per week). European automakers called for even more, 23-76 hours per year (as much as 90 minutes per week).
Paint manufacturers on average thought painters should receive about 24 hours of training each year; that equates to an average of just under 30 minutes a week, or two hours of training per month.
How much would reaching that level of training cost a shop? Clearly, the expense would vary based on lost production, travel costs, overtime expense and fees for the training. But as a reference point, I-CAR charges about $46 per course credit hour, so 20 hours of I-CAR training per year would total about $920 in training fees per technician. Although some shops are certainly investing that much and more in training, there’s still plenty of room for improvement for the industry overall.
Projections of new techs needed
You may have seen some government projections about how many more technicians the industry is going to need in the coming years. The U.S. Department of Labor (DOL), last year estimated that the collision repair industry (including dealership and independent shops) will need 11,000 more autobody technicians to satisfy demand by 2026. The DOL, which publishes these projections every other year, sees the total number of “automotive body and related repairers” working in the United States growing by 8.5 percent to more than 174,000 by 2026. That predicted growth rate is slightly lower than the agency’s estimate two years earlier of a 9.2% increase over 10 years.
That’s a lot, and whether it proves to be true or not, no one is saying it won’t be increasingly difficult to find however many new technicians are needed. Still, it’s worth considering how accurate the DOL projections likely are.
CRASH Network found two published papers on the past accuracy of the DOL employment projections for this industry. From 1984 to 1995, the DOL projected a 19.9 percent increase in autobody repairer employment; the actual increase turned out to be just 3.9 percent. And from 1988 to 2000, the DOL projected a 26.2 percent increase, but the actual increase was just 10 percent.
Shop productivity not improving
If your shop productivity isn’t markedly improving, you may not be alone. Shop productivity remained unchanged in 2017 compared to the previous year, for example, according to data from CCC.
Looking only at DRP claims, CCC reports that for drivable vehicles, shops averaged 3.6 labor hours per repair day in both 2016 and 2017. For non-drivable vehicles, 2.9 labor hours per repair day remained the average in 2017. Combined, shops averaged 3.4 labor hours per repair day in both years.
These numbers actually have fallen from previous years. Combining both drivable and non-drivable vehicles, shops averaged four labor hours per repair day back in 2013. The average for 2016 and 2017 is 15 percent below that. CCC believes that increased complexity of repairs, with more average labor hours and a higher number of parts per claim, is resulting in fewer hours-per-day.
Shop population isn’t shrinking
There’s a widespread belief that the collision shop population in the United States is shrinking, but that’s not really accurate. The latest Census Bureau data on the industry shows the total number of facilities in the collision and auto glass repair industry grew by just over 300 locations in 2016. On a national basis, the Census Bureau estimates show that the industry added nearly 1,600 shops nationwide in the five years since the post-recession low in 2011. That brought the total to 33,950 individual “rooftops” by 2016, not counting “one-man” locations nor the 6,000-plus dealership-owned collision facilities.
Looking at the data by state, most states (33 of 50) grew over the prior year in terms of the number of facilities. The largest growth, in terms of percentage, was in Vermont, where total shop count grew by 8.6 percent. In such a relatively small state, however, this amounts to just seven new facilities added to the previously existing 81.
The largest growth in terms of actual shop count was in Florida, where 51 new locations were added in 2016. Close behind, Texas added 49, and California added 46. Illinois shed the largest number of locations, losing 46 shops during the 1-year period.
Looking at five years of data, Florida saw a nearly 11 percent increase in shop count. Because Florida is one of the country’s largest collision repair markets (with 1,874 shops statewide), that 11 percent growth means it added many more locations (185) in the past five years than the other four Top 5 growth states combined.
In terms of raw numbers, California added the second most number of locations, with 127 new shops between 2011 and 2016. Also noteworthy: Texas added 84 more collision repair locations in the past five years, and New York added 78.
Growth in use of aluminum will be modest
The aluminum-intensive Ford F-150 introduced in the 2015 model year didn’t, as some expected, usher in a growing wave of aluminum-intensive vehicles. Instead, automakers have moved more toward using a mix of materials — steels, aluminum, carbon fiber, etc. Even some formerly aluminum-intensive models have shifted more toward a mix. Analyst Scott Ulnick of Ducker Worldwide said the reason is advances in joining methodologies.
“When they were designing that vehicle [the 2015 Ford F-150], the difficulty of joining dissimilar materials, like steel to aluminum for example, wasn’t really solved,” Ulnick said. “Aluminum-to-aluminum made it a lot easier than trying to join aluminum to steel.”
Advances in adhesive and mechanical joining methodologies have enabled more mixed-material vehicles, he said.
Ducker is still projecting growth in the use of aluminum in vehicles, but more in conjunction with other materials. Aluminum will account for an estimated 13 percent of the mix by 2020, Ducker projects, up from 10 percent in 2015; it will reach 16 percent by 2025. Over that time, steel’s percentage of the mix will drop from 55 percent in 2015 to 47 percent in 2025. Carbon fiber and magnesium will each account for 1 percent by then.
“As you can see, steel will still be the dominant material on vehicles in the foreseeable future,” Ulnick said. “The mix will change, but there’s nothing revolutionary going to happen.”
Shops’ backlog of work got usual winter bump
As has been the case the past several years, the average backlog of scheduled work in shops across the country increased over the winter, with shops in January scheduling a full two weeks out on a national average, up by 3.4 days from the 1.6-week average backlog at the beginning of the fourth quarter of 2018. That was within a half-day of the first quarter average in 2017 and 2018.
The figures come from the “Who Pays for What?” survey conducted in January. Of the 706 shops across the country that responded to the questions related to backlog, 38.7 percent said they are scheduling work two or more weeks into the future; that was up considerably from the 26 percent of shops who said they had that much work in the spring and summer of last year.
The largest group of shops (61.3 percent) was scheduling repairs less than two weeks out, but only about 14 percent of that group reported having no backlog at all. At the same time, 8.2 percent of shops nationally said they were scheduling out four weeks or more, very close to the 8.7 percent that had that amount of backlog in January of the previous year.
Scheduling backlogs increased in nearly every region of the country. The largest jumps were reported in the Mid-Atlantic states as well as in Alaska and Hawaii, with shops there reporting an average of 5.6 days of additional backlog over the previous quarter. The southern regions of the country also saw an increase in average backlog from the prior quarter, although these regions still generally had less than a two-week average backlog of work. For the fourth consecutive quarter, the shortest backlog of work (1.3 weeks) was reported in the South Central region, which includes Texas. •
John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network bulletin (www.CrashNetwork.com). He can be contacted by email at john@CrashNetwork.com.
