Exclusive Interview with Bill Falls
Bill Falls is the CEO of the largest chain of auto body shops in Nevada. From humble beings to the head of Collision Authority, Bill Falls in the most successful auto body entrepreneur in the state. This is an exclusive interview with the man who built an empire in collision repair.
Questions
Bill, I’d like to start our interview by learning more about your background. Tells us where you grew up.
I was born in Fort Pierce Florida. Spent some time in Okeechobee Florida and went to school there. During summer vacations I worked for McArthur Jersey Farm Dairy milking cows. They had hundreds and thousands of cows and the milking process was 24 hours a day. It took about 8 hours to milk each group and then we started all over again.
During the regular school year I ran a trot line and caught cat fish from at the St. John’s River. I skinned them and sold them each morning. After school we would set our lines for the next morning. I stayed there for a few years and then we moved to Daytona Beach. I finished high school at Daytona Beach.
I understand you were in the Air Force; tells us about your military service?
I went into the Air Force about 1972. I was trained to be a 1 & 2 engine
Fighter jet mechanic. Shortly after training I was sent to Thailand during a period in which Nixon was escalating the Vietnam effort. We ran bombing missions out of Thailand and we’re working 12 hours a day 7 days a week. It wasn’t much of a vacation. I was there for 14 months.
When I came back to the States I was stationed in Tampa Florida and I was there until I got out of the Air Force. And shortly after that I went back into the auto body field which I had just started prior to my enlistment.
You’re known as quite the outdoorsman. What kind of outdoor sports do you like and what is your favorite?
I actually got started as an outdoorsman when I started dating my current Wife. My Wife and I started hunting and fishing together. I’d always liked the concept of doing it but never tried until I met Robbie. To my surprise when I first mentioned to Robbie that I wanted to go hunting, she said she wanted to go with me. We read some books and watched some videos on how to process the meat, and spend many hours on the rifle range to hone our shooting abilities. So we went Deer hunting and bagged a small Buck that first year. We went back the next year she got her first Deer. We’re still doing that, we go hunting and fishing together. British Columbia Salmon fishing, up in the mountains for brook trout, bird hunting, deer hunting, and especially elk hunting. We also love horseback riding, and that’s a natural with some of the places we like to hunt.
We have a ranch in Idaho that we bought for retirement and it’s perfectly situated in an area that has hunting and fishing. We have horses and can ride to recreation areas from our house. My Wife spends most of her time there and I get there as much as I can, and that’s going to be it one of these days. I’m going to retire there.
So you spend part of your time here in Las Vegas and part at your Ranch in Idaho. What’s that like and how do you commute?
Well, it would be difficult without my own airplane. I started learning to fly about 8 years ago. I have a Cessna turbo charged 206, and it takes me a little over 4 hours to commute. So what started out as a hobby has become an important part of my lifestyle.
The ranch is 40 acres surrounded by agricultural and mountains. We renovated an old farm house that was built in the 1920’s. The property is nestled down in some hills, so we have neighbors but you can’t see them and they can’t see us. The neighbors are really good people. There are no hard roads in the area, just dirt. The area’s very quiet and you don’t hear the kind of things you would in the city; like emergency vehicles and things like that. It’s very peaceful there.
Flying has become part of our outdoor activities. There are just no roads in some of these places but they do have dirt & turf airstrips. The only other alternative to flying would be to hike or horseback in, but some of these places could take days to ride into. Idaho has a very active aviation community flying into the back county and we can access some of these remote areas in just an hour or so rather than the days it might take to ride in. It can be challenging to land and take off on these short unimproved airstrips and you certainly don’t want any engine problems there. It’s challenging but its fun at the same time, but flying lets you see places that would not be possible otherwise.
How did you get started in the auto body business?
Shortly after high school I got a job in Daytona Beach water-sanding cars. That was back in the days when we used lacquer to paint cars as well as synthetic enamel. I did that for a while before I decided to join the Air Force.
After 4 years in the military I went back into the auto body business but this time I started doing actual body work.
In 1977 I moved to Las Vegas and got a job at Pat Clark Pontiac in their body shop. I worked there as a body man for about a year. I then worked a short time for Ewing Brothers Auto Body and then later I moved to Fletcher Jones Chevrolet Body Shop. I met a mechanic named Joey Amato who had his own shop. He was a drag racer. You’ve got to be an old-timer to remember him. Joey had a lot of customers, and it wasn’t long before I had too much side work on my hands to justify keeping my job at Fletcher Jones. So I gave up the job so I could focus on my business. At the time I did everything: frame work, body work, and painting.
That was good training for me to learn how to deal with insurance companies and learn to run my own business. Those were good times for me. So that was about 1979 when I started working with Joey and opened my first body shop and called it Alpine Body. I stayed with that until about 1981 when I sold it and moved to Corpus Christi Texas. I thought I wanted to live there at the time but it turned out to be the wrong move for me. Six months later I was back in Las Vegas.
In the early 80’s, I partnered up with someone and we opened up a shop called Black Diamond Auto Body. It was in a small building we leased and we quickly outgrew it. We then moved to a site on Tropicana & Cameron across from a dealership called Falconi’s Tropicana Honda. We were there for 5 years, and when the lease ran out the property owners decided they wanted to open their own body shop so they kicked us out.
We opened the next shop up on the other side of the Honda dealer on what is called Bell Drive. From there you could just walk across the small street right to the dealership. In 1989 I sold out to my partner and moved on to the next project.
I understand that it was about this time in your life when you met your wife?
Yes, I met Robbie when we had the Black Diamond shop on the north side of Tropicana. So that was about 1986. She was a show girl at the Stardust Hotel. She came in one day to get an estimate for her 280Z and I thought she was the most beautiful thing I’d ever seen. When her car was done I invited her out and we had a glass of wine on our first date. And from that point on we started seeing each other until we finally got married in 1991, and have been happily married ever since. We got married about 2 months before we opened up the Falconi’s body shop.
Now the Falconi’s body shop was where you got your big break. Tell us the story of how that all came about?
When I had the shop on Bell Drive, right behind the Honda dealership, I was working very hard to cultivate that relationship. I had met all the key players and was on very friendly terms with them. And as a result we did a lot of business with them during those early years.
When I sold out my interest with Black Diamond, the Falconi’s people quickly lost confidence in my former partner and in a short period of time they were trying to recruit me to open and operate a body shop for them. Now all I really wanted to do at that time in my life was get some rest, build a house, and do some hunting and fishing. I just needed some time away from the business, but the Falconi’s folks kept calling my house wanting to meet.
During my conversations with them I made it very clear that it would be difficult to work for someone again. I was too used to running my own program and didn’t think I had the patience to work for someone else. So we cut a deal in which I would be a partner with Angelo Falconi, and I would run the day to day operations. It took us a while to find the right facility but we found a cabinet company that was going out of business and we leased that building. We called it Falconi’s Body Shop because of Angelo’s two auto dealership in town at the time. Those car dealerships and our marketing fed so much work into our shop that we became an overnight success and soon where known as the specialist for Acura and Hondas.
Back in the day, those two car dealerships, Falconi’s Acura & Falconi’s Tropicana Honda did so much advertising and sold so many cars that we all prospered from the partnership
How did Green Valley Collision come together?
Shortly after I opened Falconi’s in 1991, I put an ad in the paper for an estimator and I ended up hiring a guy by the name of Michael Spears. Michael had just moved here from Texas and needed a job and the two of us hit it off immediately. Michael was a very ambitious young man and was one of the main reasons that Falconi’s was so successful.
A few years later we started thinking about opening a second location. Michael found the perfect spot in Henderson and at the time that area of town was really growing fast. He dragged me down there and showed me the spot and I agreed it was perfect. Michael is very adventurous, and having an entrepreneurial spirit myself, we decided to build it. In 1991 we opened Green Valley Collision Center, which at the time was the most upscale collision repair facility in Nevada.
The shop is close to the Valley Auto Mall. It’s also close to the Galleria Mall. That shop did well quickly and continues to do well today. It should be a good location for some time to come. At the time we put it up there were very few shops in the area, but now the area is saturated with body shops, yet still we dominate that market area. Having competition is a good thing; it’s forced us to always stay a step ahead.
So that’s how our Green Valley shop came about.
Where did Collision Authority get its start?
6 years ago we had 3 shops and one in the planning stage, all with different names. Each one had its own brochures and marketing plan. It’s kind of complicated to explain how it got that way but we decided that it would be better to have one brand name for the entire company. However, how do you do that when you’ve already built up brand names like Falconi’s Body Shop that had repaired more than 50,000 vehicles? Angelo Falconi’s may not have been a partner anymore but that business name brought in a lot of repeat customers; we had to find a way to keep it.
Even way back in 1999 we came up with an umbrella company called The Auto Body Group. This was our first attempt at bring the entire group under one banner, but it had some flaws. People had no problems remembering the shops but for some reason the Auto Body Group didn’t stick. I think part of the problem was that the umbrella name couldn’t be incorporated to mesh with the individual shop names.
It was at this point that we hired a guy by the name of Bob McCleary to direct our marketing. It turned out to be a good move. Although Bob was not someone with a formal marketing education, he had some very good instincts about the process. He pestered us to come up with a brand name and I’m not sure if we’d have a companywide brand today if it were not for his persistence. He knew we had to find a way to bring all of our shops under one brand and Collision Authority worked. With this new brand we could be one company and still keep our individual identities. We did this by using the current name as the location. For instance, Falconi’s became Collision Authority-Falconi’s Location. This worked and now all 4 of our shops are Collision Authority and are differentiated by their locations.
I understand that shortly after the creation of the Collision Authority brand you guys build the finest collision repair facility in the western United States. What makes your Spring Valley location so special?
The first thing about the Spring Valley Shop that will stick out in the minds of most people, especially customers, is its curb appeal. It is by far the most esthetically pleasing body shop in the State of Nevada. When people walk in they sometimes have trouble believing that this is a body shop; they think they’ve went to the wrong address. All of our shops have professional reception and office areas but the Spring Valley Shop is top notch.
The Spring Valley shop is a 40,000 sq ft facility sitting on 5 acres. The shop itself is flanked on each end by 11,000 sq ft of retail space that we intend to lease out to automotive related businesses. You can’t even see our walled in back lot because of the flex space areas, which is how we designed it. We wanted the complex to enhance the auto mall. Because of the economy, some of that space is still available.
The real edge for the Spring Valley shop is it production design. We designed a shop that would allow for assembly line like work flow. This design is unconventional and should allow for maximum efficiency in the repair process. The goal is to minimize how many times and how far you have to move a vehicle to the next station in the process.
However, the Spring Valley shop is not currently living up to its full potential. When we picked this site it was slated to become an auto mall with about 14 dealerships. The area itself is new and still developing so this was a kind of leap of faith. Only two dealerships were built before the economy started it current contraction. This of course has set us back like everyone else. That auto mall will still be built but we don’t know how many years down the road before it’s completed.
We really should have been surrounded by dealerships by now and that was the whole idea behind building the Spring Valley shop here. That is why it was built with an upscale look. We wanted something that would blend nicely with the dealers and provide a service to them. We even designed it to have easy access to both Mall Road and Badura Ave. We wanted customers to be able to enter from any direction.
Recently Collision Authority acquired its 4th location. What’s the story behind the new Centennial Shop?
Opportunistic! People’s Mazda had a body shop they wanted to get rid of and we took it. We’ve always wanted a shop in the northwest but there are so many hurtles involved in getting it done. You have to get the property, get zoning approved, pull permits, and have the structure built. It can take years to get all this done. There were many that thought that this was a crazy thing to do given the economy.
When the Centennial shop became available, we had to make a quick choice for the future of our company and we think we did the right thing. While we could have played it safe, we chose to expand our business while the opportunity presented itself.
We made the choice to put Victoria Dessaints over that shop and that decision turned out to be a good one. Vicki is a strong manager with a real focus on profit. She really gets the job done. Right now she’s managing both our Falconi’s and Centennial locations.
With 4 shops, how many units do you repair a month on average?
We probably average about 800-1,000 vehicles repaired each month depending on the month. We have the capacity to do well over 1,600 if we had the work. So compared to the other body shops in town we dominate a large percentage of the share market.
I know that there are about 150 auto body shops in southern Nevada. What percentage of the market share do you think Collision Authority has out of that group?
Insurance companies generally have a pretty good gauge on the amount of collision repair dollars being spent in our market area. Based on the last numbers I saw about 6 months ago, I’d say we have about a 10% market share.
How is Collision Authority weathering the current economic conditions?
Yea, unfortunately we’ve have to make adjustments like everyone else in the industry. We’ve downsized but mostly by attrition. Most of the employees at a body shop are on commission, so as this thing hit a lot of people went looking for greener pastures early on. Sadly enough some of them want to come back but we just don’t have the work for them. When things were good we had over 50 people working at our Falconi’s location, now there are only about 22. The other 3 shops have been similarly affected. All in all, we’re faring ok in these times, in fact, in the last 60 days we’ve actually been hiring people.
If I were to tell you that there was a bright side to this whole mess, it would be the fact that there are a lot of good talented people out there ready to hire. Two years ago I could put an ad in the LA Times and not get one applicant. Now I can pick from the best and brightest; the cream of the crop. As we expand into the recovery, I’m going to very carefully select my staff and make sure that Collision Authority stays the best chain of body shops in Nevada.
You’ve seen a lot of changes in the last 20 years in the auto body business. What do you think the future holds for the old fashion mom & pop body shops? Can they survive with the emergence of the big chains?
In the old days the mom and pop shops were family businesses that were passed down from generation to generation. As you built up those businesses they would have a certain resale value which if anyone wanted they could sell and use that for their retirement. That’s pretty much gone by the way side. Since the inception of the direct repair programs by the insurance industry, insurance companies have enormous power in deciding which businesses succeed or fail. This single event may have triggered the demise of the family run body shop.
In 1991 when we opened Falconi’s, your success depended on a combination of hard work, relationship building, and aggressive marketing. You had to make the customer happy and build up a good reputation for quality repairs. This was no different than what it takes to make any business a success in America.
Now, anyone can walk into a town (if its big enough) lease a warehouse, put up a frame machine & paint booth, cut a deal with a couple of insurance companies and you’re in business. The more concessions the upstart makes the more insurance companies they get. Some of those concessions are discounts on parts and labor and as long as you can do a minimal quality of repairs insurance companies will feed you work in exchange for those concessions. So the poor mom & pop shops that built their business on quality are becoming less relative in an increasingly insurance driven industry.
So a lot of mom & pop shops are going out of business because despite their reputations and marketing they can’t overcome the numbers to compensate for the impact that these direct repair programs have on the industry. Some are not willing to make the concessions the insurance industry wants and others can’t make any money if they did. You pretty much have to do some serious volume to make a reasonable profit, and some of these smaller shops just can’t do that. I know shops in Las Vegas that have been in business for 30 or 40 years and are now dying on the vine despite their great reputations.
In summary, I’d have to say that is used to be only about the relationships you had with the customers and the community, but also mixed with the relationships you have with the various insurance companies. In time I think you’re going to see a lot less small shops and more large chains and consolidators, and Collision Authority is obviously in a good position to survive that trend.
What advice would you give someone starting out in the auto body business today?
Well, make sure you position your shop in a good location, one that gives you a chance to take some market share. In today’s high tech industry you’ll have to have enough capital to equip it well. You’ll also need enough capital to sustain that shop for a long period of time while you build up the business. You can’t just expect to come out making any money; it takes time and hard work. Whether it’s a dealership or insurance company, you painstakingly build one account at a time.
The current economic situation is not conducive to opening a new body shop right now, but the economy is not the only financial hardship facing our industry today. The new state laws on total loss, the 65% rule, is totaling more vehicles than ever before, taking enormous amounts of work out of the marketplace. Also, the return on insurance jobs is slim and can only be offset by quantity, and if you don’t have the numbers you’ll probably lose money. The price of fuel is killing us as well. There are several factors hurting auto body shops right now.
And another factor that is hurting the industry is the large deductible policies insurance companies are selling today. It may be $1,000-5,000 deductable. The policy is a little cheaper so people buy them, but they can’t afford to pay the deductable when they get into an accident. Compound this by the current economy and you have a lot of drivable wrecks on the streets. You see them everyday on our roadways. These folks can’t afford to fix them so they just live with the damage. So sadly enough, people will eventually need that policy and when the time comes they can’t afford to fix them, creating more financial problems for the auto body business. Even in good times people are going to have problems coming up with large cash deductibles. An additional problem is some customers are opting to take the insurance check and pay bills instead of fixing their vehicles, thus contributing to fewer repairs for the industry.
It would be hard for me to recommend anyone starting a body shop today. But if you’re going to do it you’d better know what you’re doing. There is no room for experiments.
What do you think is the biggest challenge facing the industry these days?
Ultimately, I think the biggest challenge to this industry is insurance owned body shops. I really think that if we don’t do something about this we won’t be in business 10 years from now. All the body shops will be owned by insurance companies. Right now Allstate is the only player in Nevada with its Sterling Collision Centers, but there are others considering it.
I think it’s unethical and a total conflict of interest for an insurance company, the people paying for the repairs, to do the repairs. It would be the equivalent of a health insurance company owning the hospital you’re about to receive surgery in. Who decides what best for the patient? The same is true in the auto body business; not every repair is the same. Currently the difference in repairs reflects the quality and workmanship of the shop you take it to, but if insurance companies take control of the industry all the repairs will be brought down to the lowest common denominator.
The Nevada Legislature recently considered legislation banning insurance companies from owning auto body shops. The bill passed the lower house but thanks to the lobbying arm of Allstate, the bill never even got a hearing in the upper house. The bill was sponsored by the Nevada Collision Industry Association. The Association leaders understand that this legislation is a priority for the survival of our industry. I hope that everyone in this business will realize that and ban together to stop the proliferation of insurance owned collision repair facilities.
If the insurance industry takes over our business what’s next? They may as well own their own auction center, salvage company, auto dealerships, and whatever they think will save those expenses. Maybe it would be a good idea for them to own their own car dealership so they could sell vehicles to their customers whose vehicles are a total loss. Why not, they have a captive client. The possibilities are endless.
In Nevada, the Legislature has prohibited liquor companies from selling at the retail level. They have forbidden auto manufactures from owning dealerships. But for some reason the Legislature has been unable to pass legislation to prohibit insurance owned body shops. It’s a real shame.
What’s new in the auto body business?
A couple of years ago the Nevada Legislature saw fit to create an upper ranking for the better auto body shops in the state. The Nevada Collision Industry Association proposed and championed that bill. Currently, anyone can open a body shop whether they have any experience or not; there is simply no way for the consumer to know the level of competency a shop might have. The Legislature added an upper tier called Class A. If you meet a long list of strict criteria and submit to certain inspections by the DMV you can qualify for the Class A endorsement.
There are some 250 body shops in Nevada. Most of them provide a good quality service to their communities, but some are terrible and do poor work. Unfortunately, these slop-shops make the rest of us look bad. You don’t have to look far to find someone who has had a bad experience at a body shop; there are just too many of them. We badly needed the Class A as a way to separate the better shops to protect the public and improve the overall image of the industry.
So far our shops are the only Class A shops that I’m aware of but I know there are several applicants. It is a new program and will take time to implement.
What is your favorite part about being in the auto body business?
My favorite part about being in the auto business is my 2 partners, Michal Spears and Victoria Dessaints. My partners allow me to enjoy the lifestyle I have today. I delegate a lot to them and they’ve never let me down. I don’t have to spend every waking moment of my life worrying about body shop business. I know they are taking care of everything. I worked hard for a lot of years to be able to have the freedom I enjoy today and my partners’ diligence to the business provides that freedom. I spend as much time in Idaho on my ranch as I do in Las Vegas, and that wouldn’t be possible without Mike and Vicki. I’m very grateful to have met them and their families.
In closing, what is your favorite car of all time and why?
Well, I’m very partial to Corvettes. I can’t put a specific year on my favorite because they’ve all been pretty nice and have improved over the years. From the very early ones, the 53’s with the wire basket headlight covers and 6-cylinder engines, to what they’ve become today. I presently own a 72 Corvette T-Top, a 64 Coupe, and a 96 Collector’s Edition; all low mileage and in excellent condition. I enjoy having them and I drive them every opportunity I can. I have lots of fun with them. My intentions are to buy a new one as soon as the economy turns around.
Bill, on behalf of the Nevada Automotive Professional, we thank you for allowing us to interview you. We appreciate your time and are grateful to you for your service to the auto industry.