ABRN: New Look, Same Uninformed Content

February 17, 2009 by
Filed under: Collision Repair Industry 

ABRN may have changed the look and format of their magazine but it is still not the place to get your Auto Body Business News. Their editor, Tim Sramcik, seems to lack any understanding of business and economics. Had he ever run a business, his column this month would have been much different. Instead Sramcik appears more concerned about the union members at GM than for this country’s financial well being. Maybe he has some friend or relative working at GM being paid a ridiculous salary (a salary, by the way, that tops just about every one of his readers’ pay).

For some unimaginable reason ABRN editor, Tim Sramcik, chose to waste a full page editorial on the plight of the poor unskilled union workers at GM instead of the plight of the skilled laborers in our industry.  Maybe he was afraid of offending his Insuro-centric advertisers. Maybe he just couldn’t think of any problems we need addressed. I just don’t know.

In his editorial Mr. Sramcik argues that the figure widely quoted, by even union loving liberals, of $73 as an average hourly wage for GM union employees, is not entirely accurate because much of that figure is tied up in employee benefits. Now I don’t expect Mr. Sramcik to take my word for it, but maybe some of you shop owners can explain to him that benefits are part of an employees hourly wage. The employer still pays for these benefits, whether it is health care or pension money. It all comes out of the employer’s pocket. Any business person who has employees understands this little secret.

Sramcik also tells us that labor costs only account for 10% of a GM vehicle’s cost. That’s true, but a quick search of the Internet will tell you  that Toyota’s costs are closer to 3%.

He blames GM managers for their problems. He’s got that one dead right. They failed to keep their costs down and their quality up. Though quality has improved, their terrible past reputation still hurts them.

Sramcik wants your tax dollars to go to GM to help them survive their economic troubles. Sorry, I’m not helping a poorly run business survive only to make more poor decisions in the future. He tries to tie the fate of our industry with that of GM’s. I’m not buying it.

GM is too big to disappear. They have the option of bankruptcy. Bankruptcy will allow GM to reorganize it’s business, and make it leaner and more efficient. Sramcik is a big fan of lean operating. ABRN has had many articles recently about cutting costs instead of going after a more realistic labor rate. But like most union lovers, bankruptcy isn’t an option in his mind because it would nullify many of the union contracts and allow GM to renegotiate. And that can’t be allowed to happen, so lets just take more of your hard earned money and give it to the government so they can give it to GM.

What I don’t understand is why no one at ABRN understands the basic economics of business. More importantly, why don’t they seem to understand the economics of our business? Our industry is unique economically. It shouldn’t be, but it is. Instead of ABRN pushing lean manufacturing and cost containment schemes, why not give body shop owners a breather and offer some advice on doubling their labor rates to realistic numbers that are in line with similar trades and industries?

Sramcik’s closing paragraph reads,

Detroit needs to find solutions to turn its fortunes, and ours, around. That means addressing its real ills honestly, which shouldn’t include squeezing autoworkers or making ridiculous claims about their compensation. We would do well to learn the same lesson.

So he wants Detroit to turn our fortunes around? I think he can do more good for our fortunes than Detroit can. He’s got a publication with thousands of readers every month to educate.

Dealing with Detroit’s ills honestly means looking long and hard at its compensation packages. You can’t fix GM’s problems without that. Unless, of course, one of ABRN’s esteemed writers can offer advice on leaning up GM’s production operations.

The only lesson for us to learn from what Sramcik writes is that there are too many in our industry with no business sense. People who think benefits are not part of employee wage packages are making decisions with their own collision repair business that eventually effect  the rest of us. Until every shop owner understands that paying a tech $20 per hour doesn’t mean that tech is earning 50% of your labor dollars at an insurance rate of $40 per hour, until they understand that that $20 wage is actually $35 when benefits are included into the equation, until they understand that benefits are most definitely hourly labor costs, until they get some basic business education, we, as an industry, will never demand more than 50% of the labor dollars that comparable industries earn.

Keep it up folks. You’re doing a helluva job!

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Comments

2 Comments on ABRN: New Look, Same Uninformed Content

  1. mastertech on Tue, 17th Feb 2009 1:11 pm
  2. More dribble from a non combatent. He should be in the trenches with the rest of us for about 30 days and then come back and write an article.

    Glad to see you writing again John.

    Body Shop Bullshit (BSB) is not much better. I guess my articles are to controversial for advertisers and insurance troll’s.

    Would not want to ruffle any feathers for a “free” magazine??!!

    Keep up the good work and we need more of it. I for one miss it.

    Bob Winfrey

  3. I. Usedtocare on Wed, 18th Feb 2009 6:09 am
  4. The $73 an hour includes the money being paid to those already retired–it is not the total compensation for a given worker. The transplants don’t have any retirees to support, so their cost per hour is obviously going to be smaller.

    The larger issue here is that we keep eliminating jobs that pay enough to sustain a middle class–those union guys buy stuff and support a lot of other workers. Why are you going after the workers? It’s the greed and short term thinking of the bankers, brokers, and CEOs’ who got while the gettin was good, and parachuted off the plane, leaving it to crash with the rest of us on board.

    The cost of helping GM is minute compared to what it will cost if they tank. A Japanese-nameplate vehicle built in the US does not provide an equivalent amount of money to the US economy as a GM or Ford would. More jobs lost from the ripple effect, fewer people who could even think about buying a new car. The death spiral goes on, ever increasing in speed.

    All that aside, was ABRN the place for this discussion?

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