The Parts & Materials Committee of the Collision Industry Conference (CIC), led by Co-Chair Chris Northup, took on a perplexing subject at the recent gathering in Seattle: “Opt-OE” or “Alt-OE” parts.
It has been reported that collision repairers have been seeing more and more parts in the estimating systems slugged “Opt-OE” or “Alt-OE” and are confused as to exactly what that means. The “OE” portion of the term makes them think the parts are OE overruns or OE parts with slight cosmetic blemishes, but some who have ordered them have discovered that the parts were not even close to OE.
“When ‘Alt-OE’ pops up in the estimating system, four or five categories can fall into that classification,” said Brett Bailey, owner of A&B CARSTAR in Kansas City, Mo. “Parts that come off cars that have been painted are not the same. We have labor that we have to get paid for, so they can’t be treated the same. Those parts are not being categorized in the right manner, so it is fraud. There is no clear-cut definition. I don’t have the option for OE blend or OEM takeoff or OE overrun. They all get lumped in the same category. ‘Alt-OE’ could mean a plethora of things, including an aftermarket part.”
Several OEs at CIC cleared the air and said it wasn’t them who created the category or definition of Alt-OE or Opt-OE.
A Mercedes-Benz rep said, “Mercedes-Benz parts are Mercedes-Benz parts. There is no Opt-OE, so the definition isn’t from us.”
Gary Ledoux, assistant national manager for American Honda, echoed the Mercedes-Benz rep’s comments.
“Just like Mercedes-Benz, Honda doesn’t have blend parts or second parts,” he said. “We only have brand-new shiny parts out of the box.”
A GM rep said, “We sell a part to a dealer, and when they do a discount or Alt-OE, they cannot get reimbursed. They do not get Conquest. When a dealer chooses to do Opt-OE or Alt-OE, the distribution network has created this category, not the OEs. They do not apply for Conquest to us. We can’t get involved with how a dealer does this.”
Later, the GM rep added, “Painted parts are identified as OE surplus. We have no creation in Opt-OE.”
With no answer yet as to who created Opt-OE or Alt-OE, Scott Biggs, CEO of Assured Performance, asked point-blank, “Who created that definition? Are we supposed to just accept it? How does this happen? What is the vetting process?”
A salvage yard rep in attendance replied, “The vetting process is up to suppliers because we have to provide that to the information providers. It’s a problem that a whole bunch of parts fall in this category; we have to do a better job of categorizing them on our end.”
Dave Smith of Auto Damage Experts had an entirely different take on Alt-OE and Opt-OE: “This was driven by trying to increase the alternative parts market, and repairers are making less.”