Jim Keller was looking for a partner. Owner of Motor Car Body & Paint since 1981, when he founded the business at the age of 25, he had since grown his one shop to two, and had reached sales of $3.2 million. Although Keller wanted to buy a third shop, his sales had recently reached a plateau. He knew he needed help to make another acquisition, and to boost sales, and he thought that a partner, especially a partner with capital, could nudge his business to a higher level.

That's where CARA came in. CARA Collision and Glass, founded in 1996, was eyeing the same shop that Keller wanted for his expansion project. Unfortunately, CARA got to it first. Or perhaps fortunately, because Keller caught CEO Randy McPherson's eye, and soon McPherson was asking Keller if he wanted to sit down and compare notes. Negotiations took nine months, but when they were finished Keller had the partner, Motor Car Body & Paint had the capital, and CARA had a brand-new executive vice president.

Consolidation - the latest practice to hit the collision repair industry. Now, it's not only the grocery stores, clothing outlets or even auto dealerships that are merging and uniting under a very few recognized business names, but also collision repair shops.

Before consolidation, the next closest thing was the multiple shop owner, the inspired entrepreneur with two or more shops under his or her ownership. A consolidator may own 20 times that number, though that is not the only difference, or even the key difference. The multiple shop owner has different branches of the same store, and each branch may have a different character or style of doing business. The consolidator has the same store, in different branches. Each branch is identical to the others. Clark Plucinski, a founding partner and the vice president of sales and marketing at True2Form Collision Repair Centers, describes this as "McDonaldizing."

"We have a highly fragmented industry, where there are huge inconsistencies in the operations of the shops.

If you take an existing store, we may not go in and improve it, but what we do is ensure consistency. Even if all the shops are doing something great but different, you want to change them so that all of them operate and feel the same."

The formula has apparently worked for True2Form, whose approximate sales from company-owned facilities exceed $20 million. Part of its success seems directly related to the momentum of its mass. For instance, most shops have the same problems- increased pressure on the bottom line due to technology changes and insurance company haggling for price reduction, among others. Though they have the same problems, independent shops are denied the chance to work together for solutions, or to share solutions some shops might have gained, even though shared ideas might be better than those thought of alone-no shop wants to give a leg-up to the competition. Consolidated shops because they are, in essence, the same shop, can break these barriers, sharing technology and presenting a united front, and much greater leverage, in deals with insurers. They can streamline management, buy in bulk and take more risks because of their plentiful capital, thereby opening themselves up to greater profits.

Chris Dameron, a former 20-year owner of CWBD's (now CWBD's True2Form) in Raleigh, N.C., which consolidated with True2Form on July 10, agrees that one of the big reasons for consolidators to get into the industry is to make a profitable business. However there are, he says, more aesthetic reasons.

"There's also seeing the possibilities of what this business can do with consolidation; bringing our fragmented industry together is really exciting. It's exciting to see what can be done when people are working together."

This excitement especially affects former shop owners when they choose to stay on in the industry, as Chris Dameron did. Dameron said, "I'm becoming part of a team now, part of the sharing of ideas, and that brings re-energization. After you've been in the business for 20-some years, you can lose some of your focus and energy, and it's been good to come back in and look from a different perspective, look at what can be done and the different reasons for doing it."

Because consolidators look from a different perspective than the independent shop owners, and because their goal, in giving various shops an identical feeling, is also different from the independent shop owners', when a consolidator takes over a shop, changes must be made. And change is hard. Kevin Caldwell of Autobody by Caldwell, a family-run collision repair shop in Laguna Hills, Calif., believes that some changes consolidators make are likely to be alienating, and thus dangerous.

"You get a consolidator in here," Caldwell said, "and the first thing they do is change the pay structure, and that irritates the employees because they're scared of something new. You also lose the personal identity. Your employees no longer work for you; they work for the corporation, and lots of times employees have a lack of respect for management."

Matthew Ohrnstein, CEO of Caliber Collision Centers, which does business in California and Texas, acknowledges that accounting and bookkeeping changes take place. He acknowledges that it is difficult, but he also believes it is liberating.

"What we're able to do is take the non-critical functions out of stores, so that people in the stores can focus on customers and repairing the customers' vehicles. We take things, yes, like payroll and vendor relations, but we bring in technicians, provide support from a corporate and regional perspective, and offer resources to the stores."

One advantage to the employees of shops that become consolidated is that their horizons instantly widen. If there's not room for a technician to grow in one shop, he or she could potentially move to another. Jim Keller has seen this happen.

"One good thing about consolidating our stores," Keller said, "was that people in our company were ready to move up, but there was nowhere to go. With CARA, they could move up to managing other shops."

Though all consolidated shop owners interviewed were pleased with the choices they made, they all admitted that the actual consolidation procedure was painful. One of the most significant acts of giving up one's business is witnessing its name change.

Dameron describes the process as "tough," adding that "when you look at the reasons behind what you're doing, it doesn't hurt so badly. It is taking over my baby and my dream, but then you see what we're going to do, how we're going to be successful at it."

Keller also agrees that "there's a certain amount of letting go that has to happen. A person who starts a company and builds it and grows it for 16 years, well, you develop an attachment." Keller said the important thing to remember, however, is that "the name and the history that belong to it are still there; the shop just doesn't operate under that name anymore."

One big disadvantage to consolidating one's shop is the sudden loss of the perks of ownership, those uncounted, non-monetary benefits of being in charge. Caldwell, for instance, sees ownership as the state of being "pretty much a free spirit, running your business how you see fit, and nobody can dictate that to you." On the contrary, Dameron admits that he now has a third party to deal with when making decisions. He feels some loss for, as he says, "now I'm not at the helm." That is why, he said, it is very important for shop owners, especially if they intend on staying with their shops after consolidation, ensure that the consolidators' goals for their shop, and for the industry, are in line with their own views.

Dameron said, "I feel like that's very important. When you decide to go this route, if you stay in the industry, make sure that they think the same as you do, care as you do, that your philosophies are similar." The philosophy is the important thing. While shop owners considering consolidation must first clarify for themselves what they want from the transaction, they must also clarify the stance of the consolidators - where they are getting their capital, who makes up their management team, what they want from the transaction. There must be an ethical fit between the consolidator and the consolidated. For instance, everybody fears the dreaded "aggregator," the consolidator whose sole goal is to buy up businesses, make a profit and then sell out quickly. But most consolidators say that this is far from their goal. Ohrnstein insists that Caliber Collision, for one, is in the industry to stay, and not for just the money.

"It's all about the people. We want to provide value to the customer, value-added services to our insurance partners, opportunities for employees to develop their careers, and all in all, we want to have fun."

But if the consolidators do everything they plan on doing, it would seem that it wouldn't be long before there isn't an independent, "un-McDonaldized" collision repair shop in the industry. Again, though, the consolidators insist that this isn't their plan.

"If there are 50,000 shops out there, only 10,000 are doing the level of work they should be," said Plucinski. The other 40,000 are exploiting the consumer, the insurer and the system as a whole. Our goal is not in restricting the 10,000 who're doing it right; it's putting pressure on the 40,000 to make a decision. Does that mean we want to buy the 40,000? No. We want to grow the 10,000."

Though there are varying opinions about the quality of the industry as a whole, most do believe that the existence of consolidators, of more competitors in the market, has driven up the standards for quality. When consumers have more choices for shops to visit, each available shop has to make its product and services more appealing. And this raise in quality helps the customer, the technician and the manager. The customer receives a better, quicker repair. The technician receives better equipment, better training and better benefits. And the manager, simply, makes more profit.

Consolidation is not, all would agree, for everyone. Customers need choice and variety, consolidators need competition, and the industry needs the small businesses that still own 98 percent to 99 percent of the market share. Consolidation is, however, good for offering managers an exit strategy or a different opportunity, consumers a potentially smoother repair process, and the industry that boost of competitiveness that perhaps has already resulted in a boost in overall quality. In all, consolidation is not the end, or the future. It is just another part of the collision repair industry.

Julie Finn works for the Collision Division of the Automotive Service Association (ASA). She can be reached at (800) 272-7467.

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