Hey there, time traveller!
This article was published 18/7/2013 (1238 days ago), so information in it may no longer be current.
With a few notable exceptions, restoring antique and classic cars has never made much sense from a dollars-and-cents perspective. In most cases, it is a labour of love for the owners, and the cars being restored have a significant emotional attraction.
In the 1900s, the business of restoring cars was booming and many shops had long lines of clients. I remember having more than 25 cars waiting to get into my facility, and that was on top of the 50 or so projects that were already underway. Purse strings were loose and the industry was humming.
At one point in the 1990s, "restoration shops" sprang up everywhere and many grotty old collision shops transformed themselves with just a change of their signs. This was not particularly good for the clients, as few body shops have the knowledge or expertise to restore a car properly, but the fact many stayed open said volumes about the economy and the middle class.
After 9/11, however, the brakes were slammed. There was a notable lag in the volume of jobs. Smaller, less experienced shops started to suffer, and quite a few closed. It was apparent the boom of the '90s was over and there has never been a recovery to the pre-9/11 levels to date. Finally, by 2005, the plunge levelled off and there was a modest return of clientele.
For Canadian shops, the volume of American clients, who were a very important part of the industry, thinned out to levels worse than the '90s as the U.S. plunged into two wars and middle-class prosperity started to crack.
Canadian clients went on as before, but Canadians are very conservative when it comes to spending money and rarely want to pay as much for a job as it takes to do it. This results in a perpetual state of negotiation when restoring cars, which can become quite tiresome for both parties.
With the economic collapse in 2008 and 2009, virtually the entire industry dried up. My own experience was many clients just stopped paying their bills. In many cases, they just walked away from their projects and delinquent bills in much the same fashion as people walked away from their homes in the U.S. The difference is shops restoring cars are not banks, they are small businesses, and it took some very complicated juggling for a shop to keep its doors open during this time.
I was lucky because I saw the writing on the wall. I always felt the industry was rather like the canary in the coal mine. It was the first to die and the last to rise during economic downturns. After all, it is based on a hobby, and people are quick to cut back on hobby expenses in hard times. I was prepared, but I was not as prepared as I could have been if I had realized the scope of oncoming events.
Despite having survived the huge losses we incurred when clients stopped paying their bills or delayed paying them for several weeks or months, it was the government that almost completely put us under.
You have to pay the taxes on money that has been billed out, even if it never comes in. The government was brutal about collecting, stating we could recover it later as a writeoff. The trouble with that, however, is you have to wait for tax time and that is a long way off when your business accounts are empty and the wolves are at the door. For a few months, the business and all the people it supports teetered on the brink.
Hundreds, if not thousands, of small shops across North America suffered the same fate, and most did not survive. We had a rough time for about three months and then the projects started to flow again. We were lucky to have had enough work, albeit smaller, less significant jobs, so we could keep the staff and thankfully managed to avoid general layoffs.
There has been a gradual return to prosperity for the restorers that survived, but pickings are still slim enough to dissuade a surge of body shops and inexperienced restorers from jumping on to the bandwagon. American clients have not returned, a product of their still-recovering economy, the grossly high Canadian dollar and a patriotic "Made in America" (or at least worked on in America) mindset.
Another factor in a changing hobby industry such as this has been an immense escalation in the cost of actually restoring a car. When I first started, you could restore a car very well for $40,000. Now it costs two or three times that amount, and often even more. Parts prices have more than tripled, and materials such as paint are also much more expensive now.
The kinds of cars we restore have also changed dramatically. When I first started, the shop was full of 1920s and 1930s cars. Over the years, the people who are interested in those have either died or have become too old to enjoy the hobby.
These days, we see muscle cars, not just from the 1960s but also from the 1970s and 1980s. These are often buggers to restore because of poor manufacturing standards and poorer materials and also the complexity of their technologies, many poorly thought out.
It has always amused me that a business that is so grounded in history has to be so quick on its feet and willing to adapt rapidly. The alternative is to become a dinosaur, and we all know what happened to them.
-- Postmedia News