News: CJ Exclusives

Auto Body Shops May Be Next to Face State Licensing

Shoddy repair work prompts calls for government potentially to step in

From bent frames, to bad welding jobs, to fenders filled with Bondo, Charlotte-area auto repair inspector Billy Walkowiak finds repair after repair after repair that he deems unsafe. To prevent such “hack jobs,” he thinks all auto body shops in North Carolina should be licensed.

Walkowiak’s business — Collision Safety Consultants — provides post-collision repair inspections to ensure vehicles have been restored to “pre-accident condition in regard to function, safety, appearance, and value.” When they haven’t, Walkowiak helps vehicle owners “fight” their repair shops and insurance companies until the repair is done right. Sometimes Walkowiak offers to repair the car himself.

Walkowiak sees himself as an advocate for people who’ve been “ripped off” by repair shops and the insurance companies who recommend and guarantee the shops.

Although Walkowiak makes his living protecting people from bad car repairs, he said he can’t do the job alone. He needs the government’s help. He has suggested creating a new licensing board under the state’s Department of Insurance. State Insurance Commissioner Wayne Goodwin isn’t ready to go that far, but he thinks the General Assembly should study the matter.

That said, economists who have reviewed the impact of occupational licensing on consumers have found that licensing requirements increase costs, limit competition, and do not necessarily increase the quality of the service provided.

A 25-year-old nurse recently brought her car in to Walkowiak’s shop for a post-repair inspection. It had been hit from behind. Walkowiak tried to measure the thickness of the paint on the two rear fenders and couldn’t get a reading, which he said indicated an overuse of Bondo, a filler commonly used in auto repair. He then helped the young woman “demand” that the body shop and insurance company look into it. They found holes drilled into the fenders where a tool had been used to pull out the dents. The holes had been filled in with plastic.

“That’s like punching holes in an aluminum can and then covering it up with paint,” Walkowiak said. “If someone were to get rear-ended in that car, there’s no resistance. The panels should’ve been replaced.”

“The ultimate goal would be to have body shops licensed just like a barber,” Walkowiak said in a report on WCCB-TV, Fox Charlotte. “I mean, is that not hilarious that a barber shop has to be licensed and someone who fixes a car, the safety of your family, doesn’t have to have a license?”

Right now, he said, there’s no place for people to file a complaint. If it were up to Walkowiak, auto body technicians may not need a degree to get licensed, but “maybe some sort of certification from I-CAR,” the internationally recognized training organization where he was certified, or from a community college.

“They just need something, anything to prove they’ve got knowledge,” he said. “And not even so much that. The major reason for the license is so I can call the [licensing board] and say ‘hey, Bob is doing a bad job repairing cars.’”

After two or three complaints the body shop should be fined, and after several more it should be shut down, Walkowiak said.

Goodwin said his department receives a lot of complaints from car owners and body shop owners about bad repairs, but that he has no power to do anything about it.

“I’m encouraging the legislature to study it,” Goodwin said. “I’m not saying there should be licensure, but perhaps they should have a board that assures some sort of minimum quality. If the legislature recommends creating a board, they should model it after what the homebuilders use with the Building Code Council, where they have members of the profession on there to help give some guidance.”

Walkowiak said he’s spoken with Sen. Wesley Meredith, R-Cumberland, and Sen. Rick Gunn, R-Alamance, both members of the Senate Insurance Committee, about the issue and that Meredith seemed “astonished and interested.” Neither Meredith nor Gunn responded to inquiries from CJ seeking their views on the issue.

Consumer choice

Licensing occupations usually reduces employment and increases prices, without resulting in better services, said Morris Kleiner.

Kleiner is a professor of labor economics at the University of Minnesota and the author of Licensing Occupations: Ensuring Quality or Restricting Competition?

Licensing an occupation typically is associated with a 15 percent wage increase for members of that occupation, Kleiner said. This partially may reflect a premium for higher human capital, but more likely is due to the lack of competition that licensing creates.

Along with higher wages for employees come higher prices for consumers, added Fergus Hodgson, director of fiscal policy studies at the John Locke Foundation.

“We’d be making the burden of maintaining a car even greater than it already is,” Hodgson said. “People who are poorer and need a job done cheaply will be barred from getting their cars repaired.”

Owning a working vehicle often is an essential part of getting or keeping a job, he added. “Whenever we raise these costs, we’re just pushing more and more people into the underclass and maybe even away from their employment.”

Hodgson agreed with Kleiner that licensing probably would not improve the quality of car repairs. “If [license holders] have a monopoly over garages, what incentive do they have to raise the quality?”

While Walkowiak wants a licensing board to hold body shops accountable, Hodgson asks who would hold the unelected licensing board accountable. “The best way to hold people accountable is through consumer choice,” he said.

“If you have a written agreement that someone’s going to fix your car, and they’ve not come through on the deal, just contract law is enough to fix that — small claims [court],” Hodgson said. “But people have a reputation to maintain and that’s the strongest incentive I can think of.”

Most important, Hodgson said, is the freedom to contract.

“It’s a fundamental right to contract with people,” he said. “If you want to hire someone to fix your car, that’s your decision.”

Sara Burrows is an associate editor of Carolina Journal.