okclee
10-30-2007, 01:12 PM
NewsOK: Body shop closures strand customers (http://newsok.com/article/3159455/1193742903)
Tue October 30, 2007
Fox Collision closes shops in four states
Business Writer
A network of auto body shops with locations in Oklahoma City and Tulsa closed over the weekend, stranding customers and putting scores of employees out of work.
The owner of Fox Collision Centers Inc. issued a letter to several media outlets Saturday saying increasing demands from insurance companies forced him to close 18 Fox stores in four states.
"Though all of our shops are busy with work and in good standing with all concession-based and non-concession-based (direct repair programs), I am sad to announce that today I will close all 18 of our locations,” Todd Fox wrote. "Hundreds of people will lose their jobs. I am so sorry, sad and discouraged.”
In Oklahoma, Fox has two stores in Oklahoma City, five in Tulsa and stores in Norman, Edmond and Midwest City. It also has repair shops in Kansas and Arkansas.
Todd Fox could not be reached for comment Monday. Phones went unanswered at Fox stores in central Oklahoma.
A woman answering the phones in one Tulsa store said new owners had taken over one store in Tulsa and one in Wichita, Kan., but the rest remained closed. The former owners plan to issue a news release later this week, she said.
Officials with the Oklahoma Insurance Department urged customers whose cars were in closed Fox repair shops to contact their insurance agent or claims adjuster. Insurance Commissioner Kim Holland said consumers also can call the department at (800) 522-0071 to report complaints.
"State law requires insurance companies to allow their policyholders to have their cars repaired at a body shop of their choosing,” Holland said in a statement. "In reviewing more than 8,000 registered consumer complaints to the department, fewer than a dozen concerned repair work.”
Much of Fox's 2,100-word letter railed against the practices of the insurance industry, especially the "direct repair programs” where insurance companies work out reduced fees for repairers' work in exchange for customer referrals.
"Insurance carriers have leveraged their economy of scale to implement concession-based (direct repair program) contracts and forced collision repair businesses to offer the cheapest and quickest repair possible, many times sacrificing quality, safe repairs,” Fox wrote.
But Holland and other collision repairers said direct repair programs can help consumers.
"Through direct repair programs, insurers and body shops agree to service rates that result in lower-cost repairs and lower insurance premiums,” Holland said.
James Light, general manager for Ultimate Collision in Moore and Bethany, said direct repair programs are one of the best ways to get customers through the door.
"They don't put the stranglehold on you,” Light said of insurance companies. "It's a good thing for the customer so they can make sure the repairs are done properly under the right guidelines and with certified people. The insurance company is not your enemy, but you can't bank on getting every insurance company's program.”
Light said he had met Todd Fox once at a golf tournament and thought he ran a good business. There had been rumors among those in the industry in recent months that Fox was looking for a buyer, Light said.
Fox, 43, bought his parents' body shop in Wichita, Kan., in 1989. He later moved to Tulsa and expanded the Fox chain to three states and annual sales of more than $28 million, his letter said.
The Society of Collision Repair Specialists, a national trade group, recently surveyed its members on insurance issues. There is enough blame to go around on both sides, the society said.
"Most repairers don't consider insurers to be their partners as the relationship has become strained, more than any time in recent history,” said Tim Waldren, the society's treasurer. "The erosion of good will is due to a lot of things, but the fact that ‘steering' and ‘suppressed labor rates' were cited by our survey as the most pressing issues facing repairers speaks volumes.”
Steering is the practice where an insurance agent or insurer representative encourages a customer to use a competitor after they have already selected a repair shop.
Tue October 30, 2007
Fox Collision closes shops in four states
Business Writer
A network of auto body shops with locations in Oklahoma City and Tulsa closed over the weekend, stranding customers and putting scores of employees out of work.
The owner of Fox Collision Centers Inc. issued a letter to several media outlets Saturday saying increasing demands from insurance companies forced him to close 18 Fox stores in four states.
"Though all of our shops are busy with work and in good standing with all concession-based and non-concession-based (direct repair programs), I am sad to announce that today I will close all 18 of our locations,” Todd Fox wrote. "Hundreds of people will lose their jobs. I am so sorry, sad and discouraged.”
In Oklahoma, Fox has two stores in Oklahoma City, five in Tulsa and stores in Norman, Edmond and Midwest City. It also has repair shops in Kansas and Arkansas.
Todd Fox could not be reached for comment Monday. Phones went unanswered at Fox stores in central Oklahoma.
A woman answering the phones in one Tulsa store said new owners had taken over one store in Tulsa and one in Wichita, Kan., but the rest remained closed. The former owners plan to issue a news release later this week, she said.
Officials with the Oklahoma Insurance Department urged customers whose cars were in closed Fox repair shops to contact their insurance agent or claims adjuster. Insurance Commissioner Kim Holland said consumers also can call the department at (800) 522-0071 to report complaints.
"State law requires insurance companies to allow their policyholders to have their cars repaired at a body shop of their choosing,” Holland said in a statement. "In reviewing more than 8,000 registered consumer complaints to the department, fewer than a dozen concerned repair work.”
Much of Fox's 2,100-word letter railed against the practices of the insurance industry, especially the "direct repair programs” where insurance companies work out reduced fees for repairers' work in exchange for customer referrals.
"Insurance carriers have leveraged their economy of scale to implement concession-based (direct repair program) contracts and forced collision repair businesses to offer the cheapest and quickest repair possible, many times sacrificing quality, safe repairs,” Fox wrote.
But Holland and other collision repairers said direct repair programs can help consumers.
"Through direct repair programs, insurers and body shops agree to service rates that result in lower-cost repairs and lower insurance premiums,” Holland said.
James Light, general manager for Ultimate Collision in Moore and Bethany, said direct repair programs are one of the best ways to get customers through the door.
"They don't put the stranglehold on you,” Light said of insurance companies. "It's a good thing for the customer so they can make sure the repairs are done properly under the right guidelines and with certified people. The insurance company is not your enemy, but you can't bank on getting every insurance company's program.”
Light said he had met Todd Fox once at a golf tournament and thought he ran a good business. There had been rumors among those in the industry in recent months that Fox was looking for a buyer, Light said.
Fox, 43, bought his parents' body shop in Wichita, Kan., in 1989. He later moved to Tulsa and expanded the Fox chain to three states and annual sales of more than $28 million, his letter said.
The Society of Collision Repair Specialists, a national trade group, recently surveyed its members on insurance issues. There is enough blame to go around on both sides, the society said.
"Most repairers don't consider insurers to be their partners as the relationship has become strained, more than any time in recent history,” said Tim Waldren, the society's treasurer. "The erosion of good will is due to a lot of things, but the fact that ‘steering' and ‘suppressed labor rates' were cited by our survey as the most pressing issues facing repairers speaks volumes.”
Steering is the practice where an insurance agent or insurer representative encourages a customer to use a competitor after they have already selected a repair shop.