Time to Answer the Call to Action
by Evangelos “Lucky” Papageorg, AASP/MA Executive Director
To paraphrase the immortal words of JFK: Ask not what your association can do for you. Ask what you can do for your association, your customers and the industry that provides your livelihood.
This industry also supports your valuable employees and their families. NOW is the time to focus. The effort you put in NOW will determine whether you merely survive or truly thrive. You must thrive in order to continue to provide a vital service to vehicle owners in your community. Will you allow your business to be crushed under the heel of the insurance industry…or will you take a stand and push for the long-overdue changes our industry needs?
In reviewing An Industry in Crisis: A Comparative Analysis of Collision Repair Labor Rates by renowned industry analyst John Niechwiadowicz, I came across a powerful quote titled Profitability: Society’s Mandate:
“The principal role of business is to improve the human condition through the creation of wealth. If we cannot make a profit, we are committing a sort of crime against society. We take society’s capital, people and materials, yet without a good profit, we waste precious resources. If many businesses do not operate profitably, society will eventually grow poor. Customers are willing to pay a company a profit as long as the overall price, quality and service offer good value. The bigger the value, the more customers are willing to pay, and thus, the higher the profit. As such, the profitability of a product or service is one measure of how well it serves society.”
Collision repair is an essential industry that supports the well-being of our communities. On a larger scale, the collision repair industry and its related fields are vital to Massachusetts and the entire country. We employ tens of thousands of hardworking, talented individuals. Our industry is evolving at a breakneck pace with technological advances in vehicle functionality that are mind-boggling. What’s even more astonishing is that we have allowed ourselves to be controlled by an industry giant that stifles our profitability. Meanwhile, insurers boast massive profits and pay their CEOs exorbitant salaries – earned on the backs of policyholders and hardworking service providers like us.
Insurance company profits are the issue. No one begrudges a company for making money. What is objectionable is the unethical and abusive manner in which insurers have, for decades, taken advantage of policyholders and third-party service providers. This issue extends beyond collision repair to the medical profession and disaster recovery services. Policyholders are misled into believing their insurance policies will make them whole again, only to find themselves short-changed when the time comes to file a claim.
A small fraction of every auto insurance policy covers the labor portion of repairs. Just look at the bottom of any estimate – subtract the costs of parts, materials, sublet items and taxes, and you’ll see what’s left for labor. From that, shops must cover wages for non-producing staff and overhead expenses. Is it any wonder fewer people are entering this industry? Where is the ROI? Where is the ability to THRIVE by making a reasonable and fair profit?
We can either sit back and lament our situation or take action. The time to act is coming – and on two fronts.
First and foremost, we must push for the pending legislation to move the Auto Damage Appraisers Licensing Board (ADALB) from the Division of Insurance (DOI) to the Division of Occupational Licensing (DOL). This change could be a game-changer. Why do you think insurers are fighting so hard to keep the ADALB under DOI’s control – or worse, to abolish it altogether? If the industry loses this oversight, every negotiation will become even more one-sided, leaving consumers and their chosen repair shops at an even greater disadvantage.
Second, we must support the newly formed Auto Body Labor Rate Advisory Board (ABLRAB). This Board, established after a hard-fought battle, will soon begin its deliberations. Its first exploratory meeting will likely have occurred by the time you read this. Formal hearings are tentatively set for early June, where YOU will have the opportunity to testify about the dire state of your business. You can explain how insurer-driven policies negatively impact vehicle owners, forcing them to wait longer for repairs and accept subpar work that fails to restore vehicles to OEM safety standards.
Your Call to Action:
• First, contact your legislators and demand the ADALB be moved to the DOL. Without this change, even a labor rate increase won’t matter if insurers can instruct their appraisers to ignore it without consequence.
• Second, attend the ABLRAB public hearings. Even if you don’t testify, your presence will show solidarity and strength. Before attending, update your Labor Rate Hero survey at vrssystem.com/survey.
“The only thing necessary for the triumph of evil is for good men to do nothing.” – Sir Edmund Burke
Will you stand by and watch your business suffer, or will you take action?
For more on what you can do and the action plan, read the next issue of Damage Report, our members-only newsletter. Not a member yet? See the application on page 7 or visit aaspma.org to JOIN THE ALLIANCE NOW!
Want more? Check out the May 2025 issue of New England Automotive Report!