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Editor Jason Stahl says collision repairers should go with their gut on State Farm’s parts bidding program.
I’m a journalist, and one of the basic tenets of journalism is to be fair, impartial and objective. From that angle, I think State Farm’s George Avery had at least one good point at the Collision Industry Conference (CIC) in July when he and PartsTrader CEO Rob Cooper stood in front of hundreds of repairers to talk about the new parts bidding program. Avery said there are many repairers out there decrying the new parts bidding program who haven’t tried it yet. Then again, as one repairer said, “I don’t have to take a bite of a sh*t sandwich to know it’s gonna taste bad.”
The one thing I wanted to point out to George is that the reason he’s getting such a bad reaction from repairers over this parts program is because of the history between repairers and insurers. And because of that history, when the grass moves, as Bob Smith wrote in the June 2012 issue of BodyShop Business (Is There a Snake in the Grass?), repairers expect to get bit.
George would probably respond by saying, “But wait, State Farm is routinely ranked by repairers as the best insurer to work with.” In fact, he alluded to that at the CIC. But sometimes the feeling from repairers I get is that that’s like saying given the option to eat either a millipede, a caterpillar or a spider on a deserted island, you’re going to eat the millipede because it tastes only slightly better than the rest. So I don’t blame repairers for their militant opposition to this program. If their gut tells them this stinks, then they need to go with it. They’ve taken one too many punches to their bottom line, and this one could be the roundhouse blow that knocks them out.
On a sidenote, I read the first positive comment I’ve seen yet on PartsTrader posted on our website by a New Zealand repairer. I post it here to get your reaction:
“We operate an independent body shop, so I guess we’re one of the chickens [referring to the scenario of PartsTrader/State Farm being the fox] – a small shop with a total of six panel beaters and spray painters. The vast majority of our work comes from insurers, and we see that increasing in the future. We work happily with PartsTrader. It saves us a huge amount of time, and we get the agreed margins on our parts.
"A lot of the old-timers complain that the industry is now being ruined because they can no longer rip off the insurers with excessive parts margins. There have always been agreed margins for parts with insurers in New Zealand. There’s no need to be a franchise prostitute. Small independent shops over here that seek to work with the insurance companies as closely as possible seem to be growing, and the ones who complain are fading away. I’m not sure that comparing New Zealand and American body shops is really relevant.”