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Kottschade, Laufenberg Discuss State of the Industry at Thursday Morning General Session

Posted 11/02/2006
By Angie Wilson

As part of the Thursday morning General Session, Geralynn Kottschade, AAM, NACE 2006 chairman and vice president of Jerry's Body Shop, an ASA member shop in Mankato, Minn., discussed an array of industry issues that directly affect today's collision repair professionals. In an interview format led by Babe Laufenberg, former NFL quarterback and current sports anchor for KTVT/Channel 11, a CBS affiliate in Dallas, Kottschade addressed such topics as insurer/repairer relationships, direct repair programs, labor rates concerns and new materials and substrates issues.

Prior to the question-and-answer interview, however, the two paid tribute to the late Russ Verona, referring to him as "The Godfather of the Collision Repair Industry." Verona had a long history of supporting the industry he loved, serving in numerous leadership capacities including NACE chairman in 1995. Verona's business was the first shop to receive I-CAR's designation as a Gold Class Professional Facility. He was also very active in IBIS and was a member of the Automobile Hall of Fame. Verona's sons, Nick and Pete, were presented with a crystal globe "on behalf of your father and all that he has done for us," said Kottschade. Also in his honor, the Russ Verona/IBIS scholarship has been established. Darrell Amberson, AAM, president of Lehman's Garage, Bloomington, Minn., was named as the first recipient of this distinguished scholarship.

Kottschade's interview began with a bit of background information as she shared with the audience her experience serving as NACE chairman and her family ties to this industry. Kottschade has been married for 22 years to Jerry Kottschade, also a former chairman of Automotive Service Association (ASA) and a former NACE chairman.

Speaking about her role as NACE chairman, Kottschade said it's not easy to come up with the words to describe the experience. She said her two- year term has been 'surreal' as well as being a pleasure and an honor. Kottschade is the first woman to serve as NACE chairman.

Kottschade said her role as chairman comes at a pivotal point in the industry, referring to State Farm's new program, manufacturers' designs and changing steels, and direct repair program (DRP) relationships.

When asked about the major issues facing the industry right now, she said there are a couple of issues that warrant attention.

"Labor rates have always been a pet peeve," said Kottschade, who encouraged insurance representatives not to look strictly at lower costs and cycle time, but to also consider what quality repair facilities are bringing to the table - a commitment to education, tool and equipment investments. She said she would like to see insurers consider shops for programs based on their quality of work, technician training and professional equipment, not strictly on lower costs and cycle time.

Kottschade also said a No. 1 concern is OEM design changes, which may include different kinds of steels, hybrid metals and boron steels. "We need to know if there are new materials in these vehicles to be able to repair these vehicles properly," said Kottschade. She stressed the important role information providers play in helping repairers create proper estimates when working on these vehicles. In turn, she said, the auto manufacturers also need to make sure the information is available to any and all sources who provide information to the repairers and insurance carriers. Kottschade also touted the numerous education courses available this week at NACE to help repairers deal with some of these issues.

In addition to the more than 50 Congress sessions, Kottschade pointed out the Early-Bird Roundtable sessions on Saturday morning, the OE Forum on Friday morning, as well as other sessions, to help attendees "find better ways to deal with these issues."

In addition to the education sessions, a $10,000 dollar Grand Prize drawing, networking etc., Kottschade highlighted the new Auto & Cycle Alley - a car show with vehicles owned and restored by collision repair professionals; the live exhibitor demos and the Auto Glass Expo @ NACE comprised of more than 30 companies that specialize in glass repair and replacement products, services and technologies. She also encouraged attendees to check out the Virtual Reality Competitions and the products in the New Products Pavilion.

Addressing the industry's profits concerns, Kottschade said, "It's tough to meet the bottom line," explaining administrative costs are more challenging than ever, from photo documentation to sourcing and managing alternative parts, for example. Kottschade also shared her recommendation to focus on vendor management to help address costs.

Direct repair programs are always an interesting topic for collision repairers. Kottschade shared her take on this important topic saying, "DRP issues are splitting our industry." If you look at what a DRP really is, she said, it's a business decision that should be made by a business owner. "I'm not for DRPs and I'm not against DRPS," Kottschade added. If you decide to enter into an insurer program, Kottschade advises fellow shop owners to know your costs, and like any other contract, take it to your attorney. "How you choose to compete is up to you, but make your decision an education one."

Kottschade also discussed parts issues, outlining the number of options available today, including new, aftermarket, certified aftermarket, recycled and remanufactured. "Work with your vendors," Kottschade said, "Let them know your expectations."

And finally, regarding insurance reform, Kottschade said, "Bob Redding [ASA's Washington, D.C., representative] believes that the 110th Congress will take a serious look at who should regulate the insurance industry." Some insurers want federal regulation of life insurance only. Property and casualty should be regulated at the federal level as well.

Off stage, as she enjoys her second year as NACE chairman, Kottschade said she hopes the NACE attendees will not only enjoy this year's event, but also take home with them an abundance of knowledge and success tools to help them thrive in the coming year. She also shared a few words of advice for this year's attendees. "Stay positive. Don't get sucked in by some of the negativity you may hear or read about our industry's economic condition, as well as some of the difficult issues we've discussed this morning. This is the first time in years I feel we have a solid chance to regain control of our business," said Kottschade. "We have the best data that we have had in years to measure our business. Use those numbers and strive to make them be in your favor. Take pride in your work, your business and your success. We must convey confidence and maintain our independence. We are in charge of our own destinies. I encourage you to experience everything NACE has to offer you, go back to your business informed, ready and able."

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