Collision Course

An autobody shop owner gives his company an image overhaul while facing resistance from some of his workers.

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Back in 1985 Jim Graley envisioned his auto-body company repositioned and transformed, its future filled with profit sharing, employee involvement, and state-of-the-art technology. 'From today on,' he stood before his workers and pronounced, 'we're a completely different business.' What he didn't foresee was how messy -- and how personal -- change can be

No one could blame Jim Graley for not trying. For 14 years he'd slogged away in his back-alley auto-body shop, 16 hours a day, seven days a week, only to face the underbelly of one more grease-ridden wreck and the promise of one more unprofitable year. "It was like digging a ditch only to watch the dirt caving in behind you," he says with a sigh.

Clearly this was not what Graley had planned when he'd left his job as a manager for Simplex Time Recorder Co., a manufacturer of time clocks. Nor was it what he'd envisioned when he'd assured his tearful mother that leaving his promising corporate career to open up a body shop was not a horrible step backward. "I wanted to use the sales and marketing skills I'd picked up to further my own business rather than someone else's," Graley says now. And besides, he loved cars.

As a youngster he had worked after school and summers in his uncle's small body shop alongside his cousin Don. There, he'd learned not only the mechanics of body work but also the tenets of business success. "My uncle grilled into me the importance of running an honest and ethical business," Graley says.

Body-shop owners are perhaps the nation's grittiest entrepreneurs: businesspeople who spend their days pounding out dents, repainting door panels, and replacing twisted bumpers. With thousands of one- and two-man shops dotting the nation, they're a sort of modern-day version of the neighborhood blacksmith. To this day, the industry survives as a fragmented business with few national brands or economies of scale, and little consumer confidence.

But Don, then 27, and Jim, then 29, resolved from the beginning that their business would be different.

Armed with a toolbox and $250, the two opened their own body shop in 1971 in their hometown, Chesapeake, Ohio. By doing a tad more than the average -- a free shuttle service for customers and frequent advertising -- the two cousins captured more business than they could handle. Inside the shop, workers and owners labored side by side. Jim Hamilton, owner of nearby Hamilton's Chevrolet, remembers the Graleys as "two young, hardworking fellows who treated their employees like family." Business also benefited from the divergent yet complementary styles of the two cousins. Sandy hair askew, prone to hot-tempered outbursts, Don clearly preferred banging out a car door over banging on a calculator. Conversely, Jim, soft-spoken, dark hair ever combed in place, preferred grinding out the numbers over pounding out the dents.

But by 1985 the Graleys could see their good fortune stalling out. Sales that had been growing steadily peaked at $525,000 and refused to budge. Jim could see competition popping up on every street corner. "We were all offering the same thing," he notes. "Graley's had lost its edge."

Beyond Graley's backyard, technological and design innovations in the auto industry were changing the landscape of auto-body repair forever. Increasingly, Detroit and other auto makers were pumping out unibody cars with high-gloss metallic finishes. Just to service these cars, a shop had to fork over around $120,000 in new equipment. For those unable to make the investment, it was the end of the line.

It was the silent transformation of a silent industry.

But Jim Graley was intent on making the transformation -- and making it right. He inhaled anything he could lay his hands on: tapes, seminars, business books. "It was inspiring stuff," says Jim. "But I lacked a central theme, a direction, to hang all these ideas on." Then late one September night in 1985, it jelled. Jim found the answer -- an idea that would change his business forever. "I felt like I'd been saved, found religion," he recalls of his epiphany.

Jim Graley didn't find his source of inspiration in any business best-seller. Rather, he found it buried in a dry GM newsletter revealing studies that found women were the key decision makers in 70% of new-car purchases. He figured if that were so, women would be equally important in making decisions about car repairs. "If this were true," Jim concluded, "having a grease-pit shop where buxom pinups decorated the walls and dirt-laden tires served as seating probably wasn't the best way to attract women."

From that central theme, the ideas flowed. At the core of his vision was a complete repositioning. He would change the focus from the service -- pounding out dents -- to the customer, by marketing to one particular customer segment: women. In an industry dominated by dirty fingernails and spotty service, he'd stand out as the Tiffany's of body shops. Jim saw himself conducting customer tours through his space-age shop. And that would be just the beginning.

"I was so excited I called Don over to the house at 11 o'clock that night," recalls Jim. There, for two hours at his kitchen table, Jim mapped out the "new Graley's." When he finished, his cousin just shook his head. "He said it would never work," recalls Jim. The workers wouldn't buy it, the doubting cousin pointed out. "The costs would price the shop out of the market," Don went on. But Jim was convinced -- and Don's negative response hardly surprised him. "Don's the fastest car appraiser in the state but could care less about market strategy," Jim explains. "Me, I love thinking about strategy."

Two weeks later, armed with an easel and two feet of flow charts, Jim stood up in front of his eight employees. He mapped out a future filled with profit sharing, employee involvement, and state-of-the-art technology. His promise: "From today on, we're a completely different business." When Jim finished, he could feel the skepticism. "It was a sea of blank faces with an occasional mutter here and there," he says. But that was understandable -- a lot to absorb in one meeting. So he figured he'd move slowly, proving to his men his commitment and sincerity one step at a time.

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