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Written By Heidi Moore for ABRN

Adapt or perish: That Darwinian notion might serve as an appropriate catch-phrase for today’s auto industry. As collision repair shops struggle to deal with changes in the industry—from rapid developments in technology to looming technician shortages—shop owners have to be innovative and flexible to stay afloat.

Shop owner Bill McElroy has survived more than 4 decades in the business, since his purchase of a fixer-upper ’55 Chevy at age 15 piqued a lifelong interest in car repair.  McElroy has managed to build a successful medium-sized shop from the ground up, with lucrative direct repair program contracts and consistently high customer satisfaction ratings. How did he do it? By adapting to changes in the industry with innovation and steady expansion.

McElroy Auto Body opened in 1975. The building it operated in was anything but state of the art: It was a 300-year-old barn with a cardboard box containing files and only three bays. McElroy describes it as “very primitive.” Despite a lack of running water and other amenities, the business thrived because of McElroy’s hard work. “I worked 25 hours a day eight days a week,” he quips. “I just loved it and wanted to do it.”

Three years later a large food chain purchased the property to build a parking lot and McElroy rented a seven-bay facility nearby. It was a step up, though he and his three employees were painting behind a curtain for a while. In 1981 he purchased that facility and took over another rental area in the building, which allowed him to add two more bays. Four years after that, he built a paint shop attached to the existing building and installed a paint booth.

Other modifications followed: building out the front office and reception area, renting an adjacent building, adding five more bays and hiring three more employees. In 1990, after purchasing the adjacent building a year earlier, McElroy decided to completely renovate the new space. The overhaul included a new roof, a new set of doors, computerized paint mixing, infrared heat baking, and new flooring, lighting and electrical work. “We almost gutted the building and redid it,” he says.

As business boomed in the 1990s, McElroy continued to expand, adding more office space and hiring more technicians. The shop’s side business of specialty vehicle restoration, including classic cars and hot rods, took a backseat to other, more profitable repair work. “As the DRP situation became stronger and stronger, as the industry was changing, we were basically forced to back off from the specialty car work and restoration,” McElroy explains.

Today, with approximately 10,000-sq.-ft., the shop has over 16 employees and 22 bays. Step inside the state-of-the-art McElroy Auto Body and you’ll find two paint booths, three computerized frame repair systems, touch-screen workstation, factory-type resistance welding machines, mid-rise and high-rise lifts, tire and wheel mounting, and an in-house mechanical department. McElroy still dabbles in hot rod and muscle car repair, but the shop’s main focus—about 90 percent of the business—is now DRP repair.

McElroy says the past few years have been especially challenging, as the industry has undergone rapid changes. “You need quality employees and they come at a cost. Overhead and operating costs are escalating,” he says. He cites the rising costs of health insurance as another factor that’s kept profits down the past few years, but he’s elected to change insurance plans rather than shift the cost to employees. “My employees are long term,” he emphasizes.

With DRPs, he’s also locked into some parameters and unable to adjust his rates as much as he’d like to. One way he’s met the constraints placed on him by insurance companies is by increasing his business’s efficiency. “We’re locked into a rate so I’m forced to find ways to find a profit level, whether it be streamlining a process or really watching material use, putting in some standard operating procedures and policing the process that’s followed,” he says.

However, he admits there has to be some “fudge factor” in the contract. If the computer says it takes one hour to do a repair job, he says, that doesn’t mean it will always take one hour. “Dollar for dollar it’s quite challenging today. We’ve only associated ourselves with direct peer relationships with companies who are willing to work with us, if you will, instead of signing any contract as a dictatorship,” he explains.

Another constant has been McElroy’s focus on customer satisfaction. “Basically our goal is the invisible repair. If we achieve that, we’ve done our job.

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