With the government relaxing lockdown measures this week and UK plc easing back into tentative operation, bodyshop apprentices could find themselves front and centre of the recovery process.
That was the opinion of Dave Sargeant, managing director of Gemini ARC and chairman of AutoRaise, who was speaking as part of the ninth ACR360 webinar, held in association with I Love Claims.
He was joined on the panel by Rob Harper, head of claims business performance, Admiral Insurance; and Kevern Thompson, commercial manager, CAPS.
Skeleton
Dave explained how about 680 of the 700 Gemini Group employees had been furloughed because of the Covid-19 crisis. However, in recent weeks sites have been reopening with a skeleton staff of three people repairing no more than three to four vehicles per day.
Although that is a long way below capacity, 21 of the group’s 29 sites are now operating to some degree. Dave explained that Gemini’s multi-skilled apprentices have been fundamental to this as they bring a versatile skill set.
‘Apprentices should be the first name on the team-sheet,’ he said.
Reluctance
And apprentices could play an even more pivotal role if some of the workforce are reluctant to return. Marc Holding, managing director of The Vella Group, commented via the ‘chat’ function that between 20% and 40% of staff might be unwilling to return while the threat of infection remains live.
Kevern backed that up by saying the business development side of CAPS had seen a 10-fold increase as more and more people are looking for digital solutions to enable remote working. But while that might be suitable in some job roles, it is impossible for those working on the shop floor.
Dave said, ‘You can give them all the PPE in the world and they still might not want to return. It’s an invisible killer and we can’t underestimate that. But we can’t stay away forever. We have to come back at some point.’
Furlough
The furlough scheme has been extended until October, with plans to increase its flexibility to enable employees to return on a part-time basis. However, the government has said employers will have to share more of the burden from August. With volumes uncertain, bodyshops could find themselves faced with some difficult decisions in the summer.
Dave said, ‘If infection rates go up again then we’ll be diving back under cover. None of us can control that. And if there is no volume then businesses can’t bring people back. Some businesses will have to make unpleasant decisions to protect themselves.’
But those decisions could be made easier if some staff members would prefer redundancy to working in an environment where social distancing is almost impossible.
Recovery
Although the AA reported a 40% increase in call-outs on Monday morning (11 May) following Sunday’s (10 May) announcement by Prime Minister Boris Johnson, the scale and sustainability of the recovery remains anyone’s guess.
Rob explained that there are too many contradictory variables at play to be confident of any predictions – more people will continue working from home and more people will remain on furlough or made redundant, but against that, of those who do return to work more will want to drive. Lockdown fatigue will also see people getting back in their cars.
He said, ‘This is going to continue for some time. We saw an instant decrease in volumes from 23 March to about 25% of normal claims. This week it has ticked up to about 33% and I expect volumes to reach about 80% by the end of the year. But it’s largely guesswork where that number will get to.’
Dave said Gemini is not planning on reaching more than 70% of normal volumes this year and predicted the country would then be plunged into the deepest recession ‘in our lifetimes’. He suggested that might be as difficult for bodyshops to absorb as the crisis itself and urged greater collaboration between sectors to protect the industry.
Collaboration
He said, ‘We all need to look and see where we overlap with businesses in other sectors, and where are the inefficiencies? Just asking for more money isn’t the answer. Insurers need us and we need them. They don’t want bodyshops to go bust and we don’t want to go without their volume, so we need to work together to find the opportunities. Hopefully, this will be a catalyst.’
Kevern agreed. He said, ‘This is only the start of a very, very long journey. Let’s take the ‘cup half full’ approach and look for the positives we can take out of this. The bodyshop industry does have inefficiencies and they shouldn’t try to cover them with greater rates. We need cross-sector talks to discuss what those cost points are and how they can be shared and overcome.’
Rob also said an industry-wide solution was the only long-term option. ‘Insurers cannot and should not forget about their supply chains. Without its supply chain it’s nothing. I expect contraction in the bodyshop sector. If contraction means we can’t meet demand then we’ll all have problems.’
ARC360, in association with I Love Claims, is supported by corporate partners ACIS, BMS, EMACS, Entegral, Enterprise Rent-a-Car, Nationwide Vehicle Recovery Assistance, S&G Response and CAPS; partners The Green Parts Specialist, Indasa, and Innovation Group; and strategic partners AutoRaise, NBRA, RepairTalks and TrendTracker.
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