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Local autobody and paint shop feels the virus pinch as 99% of revenues vanish, and turns to social media and car shows

PMG - A series checking in with businesses during the viral economic collapse of 2020

Nancy Le and her partner Anthony Lam are going through hard times.

Their Cully-based car body shop relied on fixing scratched and dinged rental cars from the nearby Portland International Airport. In March 2020, the coronavirus pandemic and the shutdown of business travel brought a swift end to that. As of mid-April, revenue has dropped by 99%.

PAMPLIN MEDIA GROUP: JONATHAN HOUSE  - Nancy Le and partner Anthony Lam, co owners of Professional Auto Body & Paint in Cully, in their spray booth. Le says business is down 99 percent since the lack of business travelers means they are not fixing dings and scratches on the rental cars from nearby PDX.

PDX estimates that passenger volumes are down approximately 92% to 94% compared to this time in 2019. And from March 2020 to March 2019, the airport saw revenue declines of more than 50% across many airport business measurables, including parking transactions, rental car operations, and concessions business. The decline in car rentals was probably closer to the 90% drop in air travelers.

So, the couple furloughed, then laid off their four full-time workers at Professional Auto Body & Paint. As owners, they have stopped taking a salary.

They usually work on new fleet cars, but on a recent afternoon, there was just one car in the paint shop, a Subaru SUV. The paint job was done, but it was awaiting a part.

Le has a business degree and now works at the front desk. She had done everything from greeting customers to managing the supply chain of parts to cleaning the bathrooms. However, Le now spends her hours at a stand-up desk on social media trying to keep the brand alive. In a time of people losing their jobs and driving less, there are fewer collisions and more people saving money by deferring car repairs.

PAMPLIN MEDIA GROUP: JONATHAN HOUSE  - A visibly upset Nancy Le co-owner of Professional Auto Body & Paint in Cully, as she talks about trying to keep the business alive with social media marketing during the viral economic collapse. She runs the front desk and the parts supply chain. The business normally fixes dings and scratches on the rental cars from nearby PDX.

Booth

The paint room which they built is empty. The hourly rate for a painter is between $15 and $19 an hour. For the first two weeks, he paid his staff to work on their cars. They were guaranteed 40 hours, but that had to end, and they were furloughed.

"We could sort of afford it, but it was eating into our savings," he says.

The departed staff's toolboxes are still in position, clean and tidy ready for a return of business one day.

"The coronavirus pinpoints the exact decline in business," Le told the Business Tribune. "I felt it the week of St. Patrick's Day. Avis and Budget rent a car, they said they're freezing their accounts. They are not sending any cars to repair for their fleet account."

She explained that the car rental companies might get a ding, but they hang on to a car to conserve cash. The thinking is, why pay to have it fixed when there is no demand for the car?

Le says it would be fairer if they kept sending them cars to repair, as it will create a bottleneck when things pick up again.

PAMPLIN MEDIA GROUP: JONATHAN HOUSE  - Nancy Le co-owner of Professional Auto Body & Paint in Cully, talking outside her office. She is trying to keep the business alive with social media marketing during the viral economic collapse. The business normally fixes dings and scratches on the rental cars from nearby PDX.

No room to pivot

Body shops are considered essential businesses in Governor Kate Brown's stay-at-home decree, but that hasn't helped much. In March, their parts suppliers had already slowed down as they were having supply chain issues. They can also buy parts from dealerships or even retailers like O'Reilly and Auto Zone in a pinch. It depends on what the insurance company, which is footing the bill, approves. They have the right to prove aftermarket or OEM (Original Equipment Manufacturer) parts.

However, that wasn't the problem. The problem was the fleets drying up overnight.

She applied for a Prosper Portland small business relief grant but was declined. (There were more than 11,000 submissions and only 210 awards.) They are waiting to hear about a Small Business Administration loan.

"What is heart-wrenching is that we do not know how long it will take to process the loans and grants or if we will get approved," Le said.

Le was once inviting, but now she keeps the front door locked, only letting in those who say they are customers. Her small office is like an airtight bubble that she keeps scrupulously clean.

"I don't want random people coming in. I'm very protective of myself, my employees, and my office environment."

She has been calling the insurance companies to see if they want to sign up for a DRP program — a direct repair program facility. This is a contract, where, for example, a State Farm or a Liberty Mutual might agree to send their collision work to an independent body shop such as Professional Auto Body & Paint. The shop can't charge as much for the job, but it is one more source of income on top of the rental car companies.

PAMPLIN MEDIA GROUP: JONATHAN HOUSE  - The $12,000 'color camera' used for matching old paint to new in a respray job. Le and Lam invested heavily in the business, including a waiting room remodel and a new paint booth. They were all set for a relaunch when the 2020 economic collapse hit.

Indie versus franchise

One reason she has not done this before is that they are often pressured into using cheaper parts and providing a lower quality service. In contrast, the Professional Auto Body & Paint brand is about high-touch, high-quality service.

"Say, for example, we have a repair on a door. We think it's about four hours of work. They may be like, 'No, I think it's three.' If we can show them the work and take photos — I usually have my technician walk through them because they're the specialists — then they can negotiate with them. We believe in using OEM parts, original equipment manufacturer, but insurance has a right to choose aftermarket, recycled, reconditioned, refurbished, Chinese-Taiwan parts. Basically, I feel like they're like eBay parts, third-party. We don't want those parts, so I'll fight for them. But again, if an insurer approved them, I can't."

So, if the shop is only allowed to spend $100 on a bumper, but Le and her partner insist on using a $200 part that they trust, they will eat the difference to keep the customer happy.

She sees the company as a boutique shop, compared to franchises or MSO (multi-shop owner) shops such as Caliber Collision. "We always stayed independent because we believe in longevity and quality, and we want to provide a lifetime warranty to the vehicle. That's why we never really signed a contract with insurance companies. Just to give us leverage."

It's not easy cold calling the insurance companies. They need to do an inspection and interview the staff.

But if the cold call were to work, Professional Auto Body & Paint would be added to the insurer's list. When someone has a crash, the insurer tells the driver, 'Here's a list of body shops in your area.' And the customer chooses. They often choose for convenience, or services like drop off or rental car, or they have a good feeling about the place from marketing.

Le's had no luck so far, so she has been working on marketing. She spends hours at her computer, finessing the brand on Instagram, Facebook, and Twitter, often forwarding content from YouTube.

"We're just saying, 'Hey, we're an essential business. We're still open.' If you need your car repaired, we could definitely provide a no-contact service. I could do email. I could do text messaging. I could do FaceTime. I could do a phone call. I could do anything to not have any contact whatsoever."

PAMPLIN MEDIA GROUP: JONATHAN HOUSE  - Anthony Lam, co-owner of Professional Auto Body & Paint in Cully, hung sheetrock there as a 14 -year-old and eventually bought the business off his father. The four painters and body workers have now been laid off. He and his partner, Nancy Le, are trying to keep the business going by getting on insurance companies' preferred lists. It's not easy as an independent bodyshop because such companies prefer to go with the lower-priced franchises which often use cheaper parts.

Startup mentality

Rent on the space, which includes the office, paint shop, and yard is $5,000 a month. Plus utilities. The clock is ticking.

They were featured in the neighborhood Cully newsletter. But most of her efforts go on social media.

"I am just trying to think outside the box every day. I can't go to bed right away because I'm just thinking about how to survive. I'm anxious. I can't sleep. I won't say the D word (depression) or anything, but you know…"

She tears up.

"We're going on our third year, so we're still like a startup business. Spending a lot of money on advertising kind of hurts us. We spent all of our savings and everything on the remodel already."

They get work through organic searches on Google, and they won't pay Yelp.

They do, however, have a Dodge Challenger Demon, the fastest production car in the world (0-60 mph in 2.3 seconds). Le's partner, Anthony Lam, is currently wrapping the roof and trunk in a carbon fiber-look material.

"That's a six-figure car," says Lam. They take it to car shows as a calling card.

Paint something else?

There's no way to pivot to painting other things, like houses. "We don't have the equipment, the training, the license…" Lam says. "In the painting industry, painting a car is the hardest thing because it's a base coat and a clear coat. Then trucks which are single stage. "The easiest thing to paint is a house."

The business can't just stop because they still have a lease and utility bills. Le and Lam purchased the business privately from his parents.

"I might as well be here," she says. "I'm doing all I can right now. And it's a huge struggle, a lot of stress, but I'm doing what I can. I'm sorry," she says, wiping an eye. "I've been here for two years, and I love it. There's a lot of community love and support. We get five-star recognition on Yelp and Google."

Le gets upset at the thought of how difficult it's become. In addition to her degree in business management from Portland State University, she has also been a global buyer for Pendleton Woolen Mills, Kroger, and Nike. However, she prefers the small business life.

"The skills that I've learned in the last 10 years are transferable. The only thing that's hard is learning the auto industry and working with insurance adjusters."

The 2008/2009 recession didn't affect Le too much because she was a PSU student, with student loans, low expenses, a $1,000 car, living at home, working at the Taco house, and as a U.S. Bank teller. This one, however, is coming at a time of peak vulnerability.

They have been building up and modernizing the business for three years, remodeling and investing. They have what they call the "color camera," which is worth $12,000, for matching colors. "We hardly ever use it, because new cars have the paint color code on there," explains Lam.

Come-along now

Lam, age 35, is proud of his well-maintained paint booth because he owns it. The paint booth is temperature and pressure controlled, which means the metallics in a paint are stable. They sit differently if the car is painted out in the shop. Once a year, they shut the booth down and clean it.

Lam recalls how he put up the sheetrock when he was 14-years-old and helped build the business with his father, who is semi-retired now at 55 and still drops by. Anthony's mom and dad came to the United States from Vietnam and met at Jefferson High School. The dad swings by with some trash, and to offer advice.

Twisted cars can be aligned on one of their two Chief Goliath frame racks. Lasers and a computer tell the vertical towers how hard to pull on the chains and how much to torque the frame. Lam compares that to an unlicensed guy who fixes cars in his driveway with just hammers and a come-along for pulling out dents.

He doesn't think he'll ever lose work to them. "Down the street from here, there are body shops, and I guarantee they are unlicensed. They go to auctions, buy cars, put them together. They make them look pretty, but the inside's still crushed. They'll put a new bumper on, but the frame rails still crushed." Every industry has its bargain-basement workers.

"Contractors will build you a house for $125 a square foot, but Joe down the street will do it for a third of the price. I think this industry will always be here," he adds. "People always have to drive. Now, if I was a massage therapist or a hairstylist, that could possibly go away. You don't have to get a massage. You don't have to get your hair done. But if you get into a wreck, everybody in the US drives. You're going to have to get it fixed."

Le says all they can do is keep trying. She's going in from 7 a.m. to 7 p.m. "I'm not the only one. Other small business owners are in the same boat together. So that's how I'm going to remind myself not to take it too hard on myself. Everyone is going through this in some way, somehow."

Professional Auto Body & Paint

6380 NE Alberta St.

P: 503.281.1103

IG: @Propdx

Twitter: @ProPdx

Facebook: ProPdx

Propdx.net

A typical Facebook post:

Happy Friday!

Hope you are enjoying the (sunshine emoji)

Just a friendly reminder we are open during normal business hours and provide a NO-CONTACT drop off service


Joseph Gallivan
Reporter, The Business Tribune
971-204-7874
This email address is being protected from spambots. You need JavaScript enabled to view it.
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