Crash Champions CEO on Skilled Labor Need in Auto Repair

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Watch Crash Champions CEO on Skilled Labor Need in Auto Repair - Bloomberg on Dailymotion

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00:00Before we get too deep into the tariff talk, I do want to hear a little bit about what Crash

00:04Champions is all about and how you grew to those 650 locations. Sure, so we're a collision repair

00:13company, so we help people in a time of need across the country, as you mentioned. We've

00:18grown primarily through acquisitions, started with just one shop, and it's an industry that

00:25is consolidating like a lot of service businesses are today. And in reaction to where the industry

00:31was headed, wanted to make sure that we kept up with that trend as well. And then if you bring

00:37in tariffs to this discussion, obviously you're growing quickly here, but if imported auto parts

00:42are tariffed, I mean, what has that impact been for you? And as you look ahead to that potential

00:47five-year lid here, what does that mean for you personally? Yeah, it would increase the cost of

00:54parts. We're in a fortunate situation where it's a straight pass-through for us, so whatever the

01:00list price on parts are, we pass that on directly to the customer or the insurance company. So there's

01:09actually a little bit of a probably benefit, as in it's more revenue dollars to the company

01:13if the tariffs come. But we're pretty adaptable in that whether the cost of parts goes up or down,

01:21we can move with it. I am curious, though, when we talk about, Matt, just the idea of economic cycles,

01:28and you've had, you've been around long enough to see a couple of disruptions that we've had in the

01:32economy. Does that affect the collision and repair business at all? Or is that just one of those sort

01:38of, you know, static, you know, consumer staples, if you will, for lack of a better phrase?

01:43It is pretty stable, but there are effects on it. For example, the increased cost and premium that

01:51we've seen a couple, the last couple years, that's an example of where consumers, if they don't have

01:56to make an insurance claim and don't have to fix the car, they're hesitant. And so we do see a

02:02reduction in repairable vehicles, for example, when the cost of insurance has gone up so quickly.

02:09And then it's also too affected by car prices. So when used car prices go way down,

02:16vehicles tend to total out quicker. And so therefore, it reduces the number of cars that

02:22we're able to repair. So economic cycles do affect us in those type of ways.

02:27I'm curious about just competition and who you consider to be your competition. Are you looking

02:32to some of those big national brands? Or do you look at more of the local sort of independent

02:36type of repair and body shops?

02:40We're the third largest in the country. And so there's not a lot of national companies,

02:46just a few of us. So primarily, it's still a very fragmented industry. And the majority of the work

02:51is still going to independence.

02:54We also, of course, have a big focus on the labor market at this moment in time. We're just having

02:58a really interesting conversation with the senior economists over at Indeed. And when you think about

03:03the labor market right now, I mean, there's this sense out there, and you can see it in the data

03:07when we were still getting that from the government, that things are weakening. You employ

03:11over 11,000 employees. Give us your take on where things are heading here.

03:19Yeah, we're in an industry starved for people, really, because of stereotypes of the past,

03:24because of decades of college career paths really being promoted. There's a real need still in our

03:33industry, and I think in a lot of skilled trades. And so we're really on a mission to spread the word

03:38and attract people to the industry, because it's been a great opportunity. Technicians make,

03:45on average, over $100,000. So we think it's a great opportunity that a lot of people don't know

03:51about, that we want to make sure people are aware of the industry, the opportunity that it brings,

03:58not only from a fixing the cars perspective and starting with that skill, but as the companies

04:05like ours grow, it creates all kinds of career paths and opportunity for people. And we start with

04:13apprentice programs training from the ground up. 83% of the company is not college educated. So we think

04:19it's a great opportunity to let people know about. And I think there's a lot of other

04:24trades that are in the same situation. I am curious. And I mean, that kind of links back,

04:30of course, to your own personal story, Matt. And I am just curious. I mean, did your path,

04:37your career path, I should say, did it sort of get disrupted because you chose to go down this road?

04:43Would it have been somewhere else? Or was this always kind of something that you knew,

04:47or at least you knew you would sell where to end up? Maybe not this big, but you knew you were going

04:51in this direction. Interesting. So I grew up in a small town and didn't have the economic means and

04:58college wasn't an opportunity for me. I literally fell into the trade by accident because I wrecked my

05:04car when I was 16 and needed to fix it and found somebody in town that I knew that would teach me how

05:11to do it. So it was pure by accident how I stumbled into it, actually. But I just happened to be in a

05:19situation where college wasn't an opportunity for me. And I believe that that still exists for a lot

05:24of people today. So it's not like an anti-college message. But if it's not an opportunity for you,

05:31sure would love the world to know that there are many other ways to have a great career, make a great living.

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