October - December

VOL. 27 NO. 4
Peace On
Earth and
Best Wishes
throughout the
New Year
© Connie Larsen | Dreamstime.com
from the NDABA
ADDRESS SERVICE REQUESTED
NDABA, 1507 19th St. NW, Turtle Lake, ND 58575-9492
OCTOBER-DECEMBER 2012
VISIT OUR WEBSITE: www.ndautobody.com
NEWS REPORT
Send all News Report articles to home
address listed below:
Clyde Nelson
1507 19th St. NW
Turtle Lake, ND 58575-9492
701-448-2568
Cell 701-460-0954
Fax 701-448-2568
Email [email protected]
Publisher ........................ Larry Berget
Co-Editors .... Bonnie & Clyde Nelson
2012-2013 Officers
President.....................Kent Meidinger
Edgeley, 493-2301
1st Vice President ..................Jeff Pfau
New Rockford, 947-5511
2nd Vice President ... Scott Heintzman
Fargo, 293-1266
Secretary ................ Colette Meidinger
493-2301
Treasurer .........................Verla Rostad
Minot, 852-2392
Past President .................Ed Barnhardt
Washburn, 462-3374
Board of Directors
District 1...................... Robert Zantow
Forman, 724-6368
District 2......................Chuck German
Ludden, 783-4395
District 3.............................Len Sadler
Amidon, 879-6232
District 4..................... Brad Martinson
Grafton, 352-1213
District 5.....................Jerome Hohertz
Cooperstown, 797-3418
District 6..............................................
District 7......................... Ron Knutson
Devils Lake, 662-3324
District 8..................... Bryce Hancock
Medicine Lake, MT, 406-789-2321
District 9..............................................
OCTOBER-DECEMBER 2012
Contents
President’s Letter ..........................................................................................3
Christmas 2012: Birth of a New Tradition....................................................... 5
Meeting Minutes — October 20, 2012 ............................................................ 7
NDABA Code of Ethics ................................................................................7
Next Meeting Information ............................................................................7
NDABA Annual Convention Information ....................................................7
Join Now Application ...................................................................................... 8
It’s wintertime, please share this information with your customers ................9
Free For Members – NDABA Classified Ads .................................................. 9
SCRS: State Farm – Parts Trader
Scott Biggs Editorial ............................................................................ 13-15
One Repair Facility’s Experience ........................................................ 16-18
Address Change Information ......................................................................... 20
Advertising Information................................................................................. 20
Advertisers
Gateway Chevrolet........................................................... Inside Front Cover
Rydell Auto Center........................................................................................2
Valley Imports ...............................................................................................3
Sturdevant’s Refinish Supply Center ............................................................4
Luther Family Ford .......................................................................................4
Corwin Wholesale Parts ................................................................................6
Dakotaland Autoglass, Inc. ...........................................................................6
Radiator & A/C Warehouse LLC ..................................................................8
Fargo-Moorhead Auto Dealers.............................................................. 10-11
Kupper Chevrolet ........................................................................................12
Minot Chrysler & Toyota Center ................................................................15
Hedahls Auto Parts......................................................................................16
PAM’s Auto .................................................................................................17
Nordstrom’s Automotive, Inc......................................................................18
Luther Parts Express ...................................................................................19
St. Paul-Mpls. Wholesale Parts Association/dentsmart ....Inside Back Cover
Ryan GMC/Buick/Cadillac ..........................................................Back Cover
District 10........................... Miles Doll
Bismarck, 258-9571
District 11 ............................................
District 12............................................
VOL. 27, NO. 4
Thank You!!!!
Issue
February-March
Issues for NDABA News Report
Copy Deadline
Mar. 1
Printing Date
Mar. 15
2013 Convention
(Note: Dates for the pre-convention issue may vary.)
Published quarterly for the North Dakota
Auto Body Association.
Copyright 2012 by the North Dakota
Auto Body Association. All rights reserved.
Materials may not be reproduced without
written permission of Clyde Nelson, North
Dakota Auto Body Association, 1507 19th
St. NW, Turtle Lake, ND 58575-9492.
CLASSIFIED ADS: Classified ads are divided into two categories - member and nonmember.
Each member is allowed 5 lines, 25 characters per line, plus name & phone number. If you’d
like to put your address in, please include that within the 5 line, 25 character portion. FREE to
members only. For nonmembers the charge is 50 cents a word, including the words, “For Sale”
and name, address and phone number. Initials and numbers count as words. All ad copy must
be received by the 15th of the month prior to publication. See ad elsewhere in this magazine.
POSTMASTER: Send Form 3579 to Clyde Nelson, NDABA, 1507 19th St. NW, Turtle Lake,
ND 58575-9492. Send front cover with address only.
Chairperson .....................Craig Amcot
Grand Forks, 775-3452
May-June
August-September
November-December
June 1
Sept. 1
Dec. 1
June 15
Sept. 15
Dec. 15
1
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staff has over 200 years of parts experience.
parts department will ship parts to your door via our own truck (where
avail able), SPEEDEE, Cross Country, Common Courier, UPS, or mail;
whichever you prefer.
parts department offers competitive prices and a “No-Hassle” return policy.
inventory of Powertrain and Collision parts is the largest in North Dakota.
At
your satisfaction is
#1 goal.
Grand Forks, ND
Toll-Free Nationwide: 1-800-354-7278
Parts Direct Local: 1-701-746-0412
Fax: 1-701-772-3377
Honda-Nissan: 1-800-344-1022
3
PRESIDENT’S LETTER
Hello, it’s that time again to write up the letter for the
magazine.
A few things to touch on; one is we are having Mike
Anderson come back for our convention in Grand Forks to
speak to us for a couple of days. He’s very informative. This
guy is amazing; he gets me fired right up. I’m looking forward
to time that he will spend with us at the convention.
The convention chairman for this year’s convention is
Craig Amcot from 5 Star Autobody in Grand Forks, his phone
number is 701-775-3452. I want to thank him for taking this
position on for the convention.
If you have any questions or ideas for the convention, please
contact Craig or any board member with your thoughts or ideas.
Board members and chairmen are listed in the magazine or on
the website at ndautobody.com.
Another area of concern to our industry in North Dakota,
and other areas/states as well, is finding technicians when
help is needed and also replacing technicians when they
retire or move out of the area because of their spouse’s jobs.
The Tech schools in state now have low numbers of students
choosing our industry. Other areas of automotive industry
are full with students. Back in the day there were two classes
of students with 20 or more in each group. So the concern is
how do we interest the younger generation in our industry?
Please let a board member or the schools know your ideas
and thoughts. Ideas that come to my
mind are to take a kid to a car show.
Or when local schools have career
days we should support them with
our attendance. Invite students and
student organizations to your shop or
go to them and talk about our industry.
Items that you find in trade
magazines may be interesting to others in the industry. If you
read such an article, send it to Clyde, he will try get permission
to reprint in the News Report. He works for you and does what
he can to promote the industry. Help him out, it’s your bread
and butter.
A big thank you to all of our suppliers, venders and advertisers
for their support in the association and the magazine.
The next meeting is January 12th, 2013 at 11:00 am at the
Chieftain in Carrington. I hope everybody with or without
a concern will come so we can start the planning for the
convention.
With all that being said, I want to wish everybody in the
association, members, associate, non-associate members,
venders, suppliers and Clyde with the magazine a very Merry
Christmas and a Happy New Year. GOD BLESS YOU ALL!
Kent Meidinger, president
fargo - north dakota
Order #1 Parts Toll Free (877) 212-1792
Local Genuine Parts Hotline (701) 277-1782
Email - [email protected]
Fax (701) 277-1331
Tony Hirchert
PARTS SPECIALIST
YOUR DEDICATED WHOLESALE TEAM
John Arneson
PARTS SPECIALIST
Mick Pietig
PARTS SPECIALIST
Jason Hendrickson
PARTS SPECIALIST
Tyler Braaten
PARTS SPECIALIST
your #1 genuine parts under one roof
4
Christmas 2012:
Birth of a New
Tradition
As the holidays approach, the giant
Asian factories are kicking into high gear
to provide Americans with monstrous
piles of cheaply produced goods —
merchandise that has been produced at
the expense of American labor. This year
will be different.
This year, Americans will give the gift
of genuine concern for other Americans.
There is no longer an excuse that, at gift
giving time, nothing can be found that
is produced by American hands. Yes
there is!
It’s time to think outside the box,
people. Who says a gift needs to fit in a
shirt box, wrapped in Chinese produced
wrapping paper? Everyone — yes
EVERYONE gets their hair cut. How
about gift certificate from your local
American hair salon or barber?
Gym membership? It’s appropriate
for all ages who are thinking about
some health improvement.
Who wouldn’t appreciate getting
their car detailed? Small, American
owned detail shops and car washes
would love to sell you a gift certificate
or a book of gift certificates.
Are you one of those extravagant
givers who think nothing of plonking
down the Benjamines on a Chinese
made flat-screen? Perhaps that grateful
gift receiver would like his driveway
sealed, or lawn mowed for the summer,
or driveway plowed all winter, or games
at the local golf course.
There are a bazillion owner-
run restaurants — all offering gift
certificates. And, if your intended isn’t
the fancy eatery sort, what about a half
dozen breakfasts at the local breakfast
joint. Remember, folks this isn’t about
big National chains — this is about
supporting your home town Americans
with their financial lives on the line to
keep their doors open.
How many people couldn’t use an oil
change for their car, truck or motorcycle,
done at a shop run by the American
working guy?
Thinking about a heartfelt gift for
mom? Mom would LOVE the services
of a local cleaning lady for a day.
My computer could use a tune-up, and
I KNOW I can find some young guy who
is struggling to get his repair business
up and running.
OK, you were looking for something
more personal. Local crafts people
spin their own wool and knit them into
scarves. They make jewelry, and pottery
and beautiful wooden boxes.
Plan your holiday outings at local,
owner operated restaurants and leave
your server a nice tip. And, how about
going out to see a play or ballet at your
hometown theater.
Musicians need love too, so find a
venue showcasing local bands.
Honestly, people, do you REALLY
need to buy another ten thousand
Chinese lights for the house? When you
buy a five dollar string of light, about
fifty cents stays in the community. If you
have those kinds of bucks to burn, leave
the mailman, trash guy or babysitter a
nice BIG tip.
You see, Christmas is no longer
about draining American pockets so
that China can build another glittering
city. Christmas is now about caring
about US, encouraging American small
businesses to keep plugging away to
follow their dreams. And, when we care
about other Americans, we care about
our communities, and the benefits come
back to us in ways we couldn’t imagine.
THIS is the new American Christmas
tradition. This is also one way of putting
CHRIST back in Christmas.
Please share this with others.
This is a revolution of caring about
each other and isn’t that what Christmas
is about?
2013 NDABA ANNUAL CONVENTION
APRIL 11th & 12th, 2013
AT THE RAMADA INN, IN GRAND FORKS, ND
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WHOLESALE PARTS
◆ Largest OE Chrysler, Dodge, Jeep, Fiat, Honda,
Toyota, Scion Parts Inventory in North Dakota
◆ Free Freight on All Orders
◆ Hassel Free Returns
◆ A North Dakota Based Business
◆ Committed To Your Total Satisfaction!
CHRYSLER DODGE
JEEP SPRINTER FIAT
1-800-247-1352
TOYOTA SCION
1-800-347-0177
HONDA
1-800-416-5226
Visit us at our website:
www.dakotalandautoglass.com
3516 E. Divide Avenue
Bismarck, ND 58501
1-800-513-2246
(701) 223-9117
Fax (701) 223-9306
4502 15th Ave. North
Fargo, ND 58102
1-866-222-5984
(701) 281-0499
Fax (701) 281-0413
2475 Washington St.
Grand Forks, ND 58201
1-888-730-8808
(701) 775-0588
Fax (701) 795-7925
“You can’t do today’s work with yesterday’s equipment
and expect to be in business tomorrow.”
[email protected]
Meeting Minutes — October 20, 2012
The NDABA board meeting was held October 20, 2012
at the Chieftain in Carrington. Members present were Ed
Barnhardt, Jeff Pfau, Brad Martinson, Kent and Colette
Meidinger. Also in attendance was Larry Teters.
The secretary’s report was given, Jeff made the motion to
approve, seconded by Brad, carried.
The treasurer’s was presented. Ed made the motion to
approve, seconded by Brad, carried.
The NDABA magazine needs your articles. Please send
them to Clyde.
District reports — some shops staying busy, some slow
right now.
Convention 2013 report — Larry Teters reported on
information about the convention which will be held at the
CODE OF ETHICS
1. To promote good will
between the motorist
and members of the
Association.
2. To have a sense of
personal obligation to each
individual customer.
3. To perform high quality
repairs at a fair and just price.
4. To employ the most skilled
mechanics obtainable.
5. To use only proven
merchandise of high quality
sold by reputable firms.
6. To itemize all parts and
adjustments in the price
charges for services rendered.
7. To retain all replaced parts for
the customer’s inspection.
8. To uphold the high standards
of our profession, always
seeking to correct any and all
abuses within the automotive
service industry.
9. To uphold the integrity of all
members of the North Dakota
Auto Body Association.
Ramada Inn in Grand Forks on April 11th and 12th. Mike
Anderson will be featured speaker. Set the dates aside.
Website survey — Ed brought results of the survey from the
NDABA website which resulted in 24 responses. There were
13 in favor to keep the convention on Thursday and Friday
and 11 to move it to Friday and Saturday.
Guidelines were set for Honorary members to be members
for 10 years and are retired. They will continue to receive the
magazine and are welcome to attend board meetings. Ed made
the motion to approve, seconded by Brad, motion carried.
The next meeting will be held January 12, 2013 at the
Chieftain in Carrington at 11:00AM.
Colette Meidenger, Secretary
NEXT MEETING
Saturday, January 12, 2013 @ 11:00 am
The Chieftan in Carrington, ND
SET THESE DATES ASIDE
APRIL 11th & 12th, 2013
NDABA ANNUAL CONVENTION
AT THE RAMADA INN,
IN GRAND FORKS, ND
Featured Speaker Will Be a
Return Trip From
MIKE ANDERSON
Check His Website @
CollisionAdvice.Com
You Won’t Be Sorry
(More Information Next Issue)
SUPPORT OUR ADVERTISERS.
Without them we will not have a magazine.
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JOIN NOW!
Now is the time to join YOUR Association
Now is the time to work together for our future!
I hereby apply for membership in the North Dakota Auto Body Association. I promise to abide by the Association's By-Laws
and Code of Ethics. I understand that any signs, decals or emblems provided by the Association remain the property of the
Association, and agree to return them to the Association upon termination of membership. I understand that use of
Association logo and identification is authorized only as long as my membership is maintained.
Date_____________________
Your Name_____________________________________ Spouse's Name_____________________________________
Home Address______________________________________________________________________________________
City__________________________ State________ Zip Code + Four______________ Phone (______)_______________
Business Name_________________________________ PO Box (Mailing Address)_______________________________
City__________________________ State________ Zip Code + Four______________ Phone (______)_______________
Classification (circle one)
Owner-Manager $50 - Owner-Manager (1st year) $25 - Allied $25 - Associate $5 (employee)
Mail to: North Dakota Auto Body Association, Colette Meidinger, PO Box 235, Edgeley, ND 58433-0235
(receiving the News Report does not make you a member of the NDABA)
NDABA has a new Web Site address!
Check it out at www.ndautobody.com
It’s wintertime,
please share this
information with
your customers,
it’s good PR.
An emergency preparedness kit can be the difference between life and death
during bad weather. Here’s a checklist to consider when packing:
1. Don’t forget your cell phone charger with car adapter
2. Pack a cooler with plenty of water for everybody
3. Pack non-perishable food items (food that provides
a lot of calories) in case you don’t reach the next
restaurant as soon as planned
4. Carry a first aid kit that includes bandages in various
sizes, prescriptions, ointments, swabs, eyewash, pain
relievers, tweezers, scissors, matches, and keep them
all dry inside a hard plastic case
FREE FOR MEMBERS
NDABA CLASSIFIED ADS
5. Keep car repair tools on-hand like a spare tire,
jack, jumper cables, flashlight (batteries should be
removed and taped to the side when not in use), extra
batteries, car fluids (windshield washer, antifreeze,
oil, power steering fluid), flares and reflectors, basic
tire repair kit, tire inflator / air pump, replacement
fuses as well as small tools such as screwdrivers,
hammer, and vise grips.
6. Keep blankets, sleeping bags, and candles handy
especially during cold weather
Prepping a roadside emergency kit
takes time. But you will be glad you
took the time if you ever need the kit.
Classified ads are divided into two categories – member
and nonmember.
Each member is allowed 5 lines, 25 characters per line,
plus name & phone number. If you’d like to put your
a d d re s s i n , p l e a s e i n c l u d e t h a t w i t h i n t h e 5 l i n e , 2 5
character portion. FREE to members only.
For nonmembers the charge is 50 cents a word,
including the words, “For Sale” and name, address and
phone number. Initials and numbers count as words.
All ad copy must be received by the 15th of the month
prior to publication.
Please type or print plainly (do not write, please) the
Clip out the form and mail to: Clyde Nelson, NDABA
Classifieds, 1507 19th St. NW, Turtle Lake, ND
______
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______
_______
______
______
______
______
_______
______
______
______
______
_______
______
______
______
Name _________________________________
Box No._______ Phone (_____) ____________
City, State__________________Zip ________
NDABA Membership Since _______________
The views expressed in articles throughout
this issue are those of the writers, and do not
necessarily reflect views of NDABA.
Readers are welcome to react to views
expressed here or elsewhere in the magazine
by writing:
Clyde Nelson • NDABA News Report
1507 19th St. NW • Turtle Lake, ND 58575-9492
[email protected]
9
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P A R T S
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GM VEHICLES
COMPETITIVE
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PHONE
701-282-8880
1-800-342-4260
HOURS 7:30-8:00
SAT. 8:00-4:00
•
402 40th St., SW • P.O. Box 2280
Fargo, North Dakota 58103
Local Hot Line: 277-1782
Toll Free Nationwide: 1-800-676-7667
Fax: 701-277-1331
Call us at: 1-800-342-4260
Gateway Chev - Cadillac
501 38th St SW
Fargo, ND 58103
WHOLESALE
PARTS GROUP
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SOCIATIO
Your Craftsmanship.
Our Parts.
Together It’s A Work of Art.
Fargo ★ Mhd.
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TOLL FREE
Direct To Parts Dept.
800-247-1352
Direct To Parts Dept.
800-416-5226
701-492-4184 LOCAL
PARTS HEADQUARTERS
FARGO-MOORHEAD
282-8565
LOCAL
1-800-347-0177
201 40th Street South, Fargo, ND 58103
Local Ph. 701-282-5600
HONDA
Local Ph. 701-282-6319
301 38TH STREET SOUTH
CHRYSLER DODGE JEEP RAM FIAT
233-3225 LOCAL
PARTS HEADQUARTERS
The Dealers Who Are Working To Keep Your Business
Upper Midwest Largest Parts Inventories
Toll-Free Direct Line Access
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201 SW 40th Street
FARGO, ND 58103
TOYOTA SCION
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AUTHORIZED PARTS FOR
11
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Members and repairers,
Hopefully you have all seen the
information provided by the Society of
Collision Repair Specialists (SCRS) that
informs on what we have learned about
the State Farm parts bidding process
currently being “tested” in Grand
Rapids, MI, Tucson, AZ, Charlotte, NC;
and soon to be launched in Birmingham,
AL.
Below is a great additional op-ed
piece from Scott Biggs with Assured
Performance outlining his take on the
program that is being rolled out here
in the United States. This issue was
the certainly a focal point of most of the
meetings SCRS participated in while in
Oklahoma City last week. In fact, during
the SCRS public board meeting, we
directly asked representatives of State
Farm “if the collision repair facilities
don’t like or support the process, if
the vendors don’t like or support the
process, if the part manufacturers don’t
like or support the process, would State
Farm continue to roll it out without
industry support just because they
could?”
The answer was yes. Their
representative stated, “Yes. I can tell you
that State Farm is moving forward with
this. We think it is in the best interest
of our customer. I know we don’t have
agreement, and that is fine, and I carry
that information back. (And) something
could happen that I can’t predict. But I
can tell you that, right now, that we are
moving forward with the process with
our Select Service providers.”
In fact during another public
discussion State Farm representatives
urged paint jobbers to “calm their repair
customers down,” claiming that SCRS
had involved themselves in an area
that is really between them and their
Select Service shops, and has created
unnecessary hype with misinformation.
There is no misinformation here folks,
and this issue is much bigger than just
State Farm and their contracted shops.
In fact, State Farm has stated in written
communication to parts suppliers (not
under contract with them) that “All
orders related to State Farm claims
from Select Service repair facilities will
be placed via PartsTrader. In addition,
repairers are able to use PartsTrader to
seek quotes and place orders for repairs
not related to State Farm.”
We have shared the information we
have received directly from repairers,
manufacturers, suppliers and dealers in
the market areas where this is currently
taking place, and I can tell you, the only
people who disagree with the analysis
is State Farm.
The good news is, there is time to
bring your concerns or comments to
your collision repair association, time
for you to discuss this situation with
your parts dealers and suppliers, time
for your suppliers them to encourage
their associations to get engaged in this
issue, and time for the industry to decide
if we have finally had enough of other
entities interjecting themselves into our
business with unreasonable and invasive
mandates. I hope you appreciate the
editorial below; more information to
follow soon.
Sincerely,
Aaron Schulenburg
Executive Director | Society of Collision
Repair Specialists (SCRS)
302.423.3537
877.435.6028 Fax
PO Box 346 Smyrna DE 19977
[email protected]
State Farm – Parts Trader:
It’s about losing profit, control, and your very survival.
Posted on 03. May, 2012 by biggs in Assured Performance, Biggs Articles, Body Shop Advocate,
Collision Industry News, Consumer Advocate, Industry Op-Eds
The following is my opinion, my
fear, and my prediction based upon my
own research and speculation. It is one
man’s opinion.
State Farm’s latest entry into the parts
business is more threatening, robust and
all consuming than anything attempted
in the past. In my opinion, this program
will destroy the OEM list price, funnel
all of the shop and dealers confidential
pricing, discount and profit information
to the insurer, undermine the OEM
parts distribution network, wipe out
thousands of OEM wholesale parts
dealers, give control of parts pricing
to State Farm and other insurers, and
eventually eliminate the shops profit
on parts. The shop’s and OE wholesale
parts dealer’s survival is now in serious
peril. This is a crisis of unequaled
proportions. And, that prediction is mild
compared to my worst fears!
After researching and listening to the
explanation of the program, I came to
the conclusion that this is the biggest
overreach in auto physical damage
(APD) insurance history. I drew the
conclusions not because of what they
have said or what they will show you
today, but rather what they didn’t want
to say, and what they try to avoid saying.
Based upon 28 years of watching how
these things go, I speculated about
the logical next steps these initiatives
always take. I also looked at what they
are doing in the construction industry
where contractors only get a 10%
material handling fee if they are doing
work under state farm’s version of DRP
in housing rebuild.
As I heard the State Farm spokesperson
say they would continue with their roll
out of the parts “Trader” program
regardless of the market reaction, it
sent a shiver up my spine. I could just
hear the quote “Resistance is futile,
you will be assimilated,” depicted in
the movie Star Trek Universe. The
evil Borg took over as they linked the
humans into their “one-mind” machine.
The parallels are obvious. The Borg
were soul-less cybernetic organisms
and used forced “assimilation” onto
everyone they conquered. They forced
electronic connection to the “hive mind”
and mother-ship where all control
(Continued on page 14)
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14
State Farm – Parts Trader
was maintained. Their mission was to
“achieve perfection” by eliminating
anything they interpret as inefficient.
They did it on behalf of their perception
of the greater “good.”
GEORGE ORWELL’S 1984
You could just see a classic scene
from any Orwellian-type movie plot
as Big Brother takes away all choice,
and eliminates another freedom from
the masses. Eerily, the “State’s”
representative said, “We are doing this
to address what we see as inefficiency
for the good of our policy holders.” He
went on to apologetically say to other
groups how the mother ship thinks they
are doing the “right thing” as though it is
a favor to the shop and industry.
Just 5 years ago, I heard the same
State Farm spokesperson tell groups
of shops across the nation to ignore the
mandatory parts compliance clause in
the state farm DRP agreement. He said,
“they’re just not going to get into parts,
so just ignore that one.” I actually have
it on video tape! That turned out to be a
blatant lie. Contrary to their denial, they
are in the parts business, and now in a
really big way! Now, shops that signed
away their freedom MUST agree to
the parts clause – or get kicked off the
program.
Market by market, the thousands of
shops on State Farm Select Service
are being told they MUST use the
software to order the parts. They must
do it as part of the agreement they
knowingly signed! Although, when
they agreed to the terms, this was not
part of the conditions. The next step in
the evolutionary process is getting the
vendors to start chasing the prize as
they unknowingly destroy their profit
structure.
As they roll out their plan to each
market, the wholesale parts dealers
are being told they must use the trader
software, but not by the “State” but
rather by their shop customers on
the Select Service Program. Like the
first taste of a highly addictive drug,
once they use it, the fix is in. Using
the “Trader” software system, the
transaction between the insurer and
the shop is totally visible to the “State”
and other insurers if they jump on.
This shows both the bid “list price” the
dealer is offering as well as the “shop
discount.” With this system, the “State”
will know every confidential discount
(Continued from page 13)
rate between every dealer and every
shop in every market. They will instantly
know the “prevailing competitive
pricing” and what the shop’s profit
margin is. They will also have the means
to use that discount knowledge to better
negotiate, and force dealer pricing into
conformity regardless of if a shop is on
the system. They will just start claiming
they won’t pay more than the prevailing
competitive rate on parts as they do on
labor. Using this new found information
power, they will force dealers and shops
alike to play along or face extinction as
they migrate all of the purchasing power
to those who will.
Of course, right now, it looks innocent
and quite harmless! They sell it is as
just a tool the shop can use to be more
efficient and still stay with their favorite
vendors …for now! They sell it to
the shops and industry like a piece of
candy to lure an innocent child into the
awaiting van!
As dealers fold under the pressure
and begin to “bid” on the parts order,
they will start lowering the “OEM List
Price” to be competitive with the lower
list price of the imitation parts offered
by someone else. This is the beginning
of the destruction of the “OE List price”
structure everything is based upon today.
This helps to create a free-for-all market
place where the lines between genuine
OEM and aftermarket is blurred. This
too will follow the direction of the UK
model some industry notables are so
enamored with and want to sell you on.
KPI – THE DRIVING FORCE
Unknowingly, shops will be the
driving force and make this doomsday
prediction a reality because each must
meet their “score” through the KPI
program the “state” now uses to grade
shops against each other. Remember,
only those who “play best” according to
SF rules will be rewarded with a promise
of a referral (monitored by the score they
get from the KPI dashboard). Shops will
also be forced to sell aftermarket parts to
the consumers to get their pricing down
to score “high” on the state’s KPI’s.
State Farm made the subtle change in
business practice with the distinction
that alternative or aftermarket parts
can be used on a vehicle as long as the
consumer has given consent. It is the
shop’s job to get the consent.
To control the “collective” from the
mother ship, State Farm uses a KPI
dashboard that provides the shop with
a score. There locator and referral
mechanism puts those with the highest
score at the top. The problem with
the KPI dashboard program and the
“scores” the “mother ship” is handing
out, can’t be reproduced by shops
using their own management systems.
The “State” refuses to share how the
numbers are created. Thus, requiring
the shops to simply take the word of
the insurer that they are less competitive
than their peers. This seems like perfect
mind and behavior control from a blind
authoritarian master … psychological
studies show how even lab rats go
crazy under similar conditions. No
matter what the shop does, they can be
manipulated into thinking they need
to work harder and cheaper to become
more efficient, competitive and indebted
to the “State”. Remember, these KPIs
the shop must follow are not based on
their own management systems and
business analysis numbers. They are
not based upon the highest profitability,
quality of repair, dollars per customer,
multiple profit centers, dollars per
hour, employee production efficiency,
etc. They are based upon only what
the Borg has determine should be the
measurement … only what Big Brother
says and what they indicate as degrees
of state farm VENDOR success. By the
way, Walmart does similarly to their
vendors. I highly recommend reading
the book, The Walmart Effect.
It’s totally Orwellian. The “Trader”
parts software is forced upon the shops
by Big Brother, State Farm. Even the
names fit into this sinister plot as state
farm could be thought of now as Big
Brother and the dictator state owned
farm that ripped the private ownership
and choice from the independent farmer
as the “State” takes over. They now have
your numbers, and you are forced to
conduct business through yet another
program that harvests your data and
reports your every move to Big Brother.
They know all, and control your every
action, profit margins, rates, and now
even who and how you buy parts. Is
paint next?
Soon, they will tell you to just order
the parts with the program, they will
negotiate everything, determine the
parts they want on their insured vehicle,
and pay for it even. They will spin this
as they are doing something nice for
you taking the burden of cash flow off
15
your plate, and they will offer to give
you a 10% handling fee for just pushing
the button on the parts order. They may
even suggest they will increase your
labor profit to make up for what they
steal from you on parts. This assumes
they decide to ignore the “prevailing
competitive rate” compliance demand
they use to control your shop labor rate
and profits, now. They will tell you that
you should like the idea of being in the
labor business because you are good
at it, and they are better at massive
procurement. It is not true! They are
not even the most efficient insurance
company in spite of the fact they have
over 19% market share!
THIS TIME WE MUST SAY NO
AND MEAN IT
This time, shops must finally say, no!
Dealers must finally say, no! And, the
industry needs to tell insurers to stick
to the business of insurance while shops
stick to repairing. Shops are notorious
for selling each other out, chasing the
promise and whoring themselves into
the poorhouse. Everyone is expecting
shops to once again conveniently
believe the lie, ignore the obvious future,
and agree to doing the most harmful
thing possible. Everyone is expecting
that the Consolidators will see the
opportunity, agree to it, and start the
avalanche as they have for the last 15
years. But this time, it is not up to just
the shops.
AUTO MANUFACTURER
RESPONSE
The stakes are bigger and threaten
dealers, the Auto Makers themselves,
and the entire industry financial
structure. Auto manufacturers will
have to take a stand as well, and they
will this time. If the “State” does not
get the message, then the Auto Makers
will have no choice but to get into the
APD insurance business with their own
brand-driven insurance that requires
the use of genuine OEM parts when
repairing new model vehicles. They will
have little choice but to fight fire with
fire. And, we won’t have to wait long to
see it. It is only a few months, or at most
maybe a year away! What State Farm
may have done is just wake the sleeping
giant because at least a half dozen of the
biggest Auto Manufactures have their
own auto insurance solutions, but none
have pushed it…yet. If the State presses
ahead, I know they will pull the trigger.
This is not about Insurers & Parts
Trader, or the electronic parts ordering
efficiencies – Those are arguments and
predictions are little more than water
cooler conversation. For the Body Shop,
it is about profit, control, and your very
survival.
I do not know how, or why, the
insurer which has been found to be
the most reasonable to work with in
the past has embarked upon a strategic
direction that will make them the most
reviled and destructive force in collision
repair history. This incredibly invasive
strategy and overreach on their parts
will completely and entirely blow up
the industry within 5 years and leave
nothing but scorched earth in its path.
Shops will be labor businesses with
only one, highly-complex profit center
to make their business worth owning
in a time when they need more profit
centers, not less. Consider the Farm
will have all three legs of the triangle
to completely control the shop and
erase any profit: 1) Their manipulative
and distorted prevailing shop labor rate
survey, 2) Their KPI score card based
on a secret and self-serving formula of
success, and now, 3) Their strangle-hold
on parts profit, and sourcing.
Shops, dealers, OEMs, and the
industry must take a stand on this one
and say NO! Do whatever you must.
Move your business and resource
support to the other 82% insured by
others. Support the auto makers that
will support you, and get all of your
customers to pick another brand of
insurance that is not out to destroy your
business and your industry.
And, if State Farm needs a graceful
way out of the foolish strategy they
have embarked upon, they only have
to change their demand to say that all
shops on their select service program
must start using any sort of electronic
parts ordering. That will help address
inefficiencies, but the Farm can
respectfully go back to being one of
the most highly rated insurers and not
become the evil empire that destroyed
the collision repair industry.
3615 South Broadway • PO Box 1607 • Minot, ND 58701
1-800-598-1220 • 1-701-857-9250
Fax 1-877-622-7278 • 1-701-857-9258
[email protected]
Hours: 8:00am - 6:00pm M-F 8:00am - 5:00pm Sat.
16
Members and repairers,
In follow up to our recent
communications, the Society of
Collision Repair Specialists (SCRS)
has received communication from one
of our members directly illustrating the
long list of challenges their business
has endured through State Farm’s
mandated parts bidding process. The
following essay was provided by
this repair facility, operating in
one of the “test” markets, and is a
direct reflection of viewpoints they
have formed while participating in
the program. We are forwarding the
unabridged, unedited account of their
experience, and hope that you find this
beneficial and informative.
Sincerely,
Aaron Schulenburg
Executive Director | Society of
Collision Repair Specialists (SCRS)
302.423.3537
877.435.6028 Fax
PO Box 346 Smyrna DE 19977
[email protected]
“The nine most terrifying words in
the English language are: ‘I’m from the
government [State Farm] and I’m here
to help.’ ” — Ronald Reagan 1986.
By paraphrasing President Reagan’s
statement, we can all relate to what
the newly mandated bidding program,
PartsTrader, is going to mean to the
collision industry.
How do you improve on a one-touch
electronic upload to your vendor?
Apparently State Farm thinks it has the
answer in PartsTrader. The short and
sweet version of our orientation speech
prior to being forced to interject the
PartsTrader bidding process into our
business was “We are going to help
you, the customer, and State Farm have
a better experience during the course of
the collision repair process with our new
system of parts ordering”. How innocent
sounding.
After dealing with insurance
companies for decades I don’t think I
have ever had such a sick feeling as at
that moment.
Allegedly, State Farm is implementing
this program because we as repairers
are so incompetent at ordering parts
that we need their help. This decision
is obviously based on their vast and
direct knowledge of ordering parts over
the last 50 years, how to identify and
cultivate strong relationships, knowing
at all times what the best supply chains
are, where to find alternative parts,
who has the best service, who has the
best quality, and the hundreds of other
methodologies we have developed and
integrated into our repair process to
run efficient businesses, for our mutual
customers.
We have been using the PartsTrader
system for 2 months now and I can say
with authority that it is an administrative
burden which has created inefficiencies
that have dramatically slowed down our
time-proven processes by a minimum of
30%. Before we were forced to use this
bidding software to procure our parts,
our repair center had the capability
to estimate damage, disassemble the
vehicle for thorough inspection and
blueprinting, and have parts ordered
all in less time than it takes to receive
quotes through this new “efficiency
improvement” process that State Farm
has forced us to use. Now we write
an initial estimate with all OE parts
and must wait a mandatory one hour
before quotes are even available for
review. Then, the estimate needs to
be re-written using those quotes and
possibly resubmitted to another program
for parts price matching options. Again,
the shop waits for quotes. After the
second rounds of quotes are reviewed,
the estimate is re-written again. Yes,
that means writing the same estimate
up to three times and parts are still
not ordered! How does that make part
ordering easier or more efficient?
Following is a list of some of the
problems encountered using PartsTrader.
Mandatory quote time delays
- Minimum delay of one hour
- Afternoon cut-off time increases delay
to the next workday
- Delays uploading estimates to State
Farm
- Delays parts ordering and receiving
Vendor issues
- Refusing to utilize program forces
shop to call for quotes
- LKQ vendors low-balling quotes
and delivering non-insurance quality
parts
- Restricts OE vendor the ability to
price match aftermarket or LKQ
prices
- Having to choose a non-preferred/not
trusted vendor because the quote was
lower
- If the vendor has a question about
the options, they have to submit a
question and wait for a response
- Vendors who sell LKQ and A/M are
seeing both quotes
Parts returns increase
- Consequence of choosing a nontrusted vendor or vendor quoting
unusable parts caused by quoting
wrong part based on options
- Pre-order parts have to be returned if
quote comes in lower at a later date
Customer Service
- Unable to give State Farm customer
an accurate estimate until parts quotes
are returned
- Causing customer’s confusion if parts
are changed after quotes are reviewed
- Delays jobs when parts quoted are
unusable and reordered
Administrative delays
- Must wait at least one hour to finish
State Farm Estimate
- Must explain part changes to customer
after quotes are reviewed
- Must resubmit estimate to Collision
Link after waiting on Parts Trader for
price matching options
- Parts returns for unusable/wrong parts
- Write one estimate up to three times
- Pre-ordering parts is restricted
Cycle time
- Decrease due to parts ordering and
receiving
- Decrease due to delaying paperwork
for technicians
PAMS_NDABA_KR_0312.pdf
1
2/15/12
- Decrease due to increase of part
reorders
- Decrease due to restrictive pre-orders
Profit loss
- Decrease to profit because standard
list price has been reduced
- Cycle time decreases = lower DRP
tiering
- Lower tiering = less referrals
- Unhappy customers = less organic
growth
- Parts returns increase
- Additional admin staff cost
In addition to the above stated
items, the following is a list of other
observations and conclusions that can
be drawn from the issues we are now
experiencing daily:
- Dealer body shops may not be
able to purchase parts from their own
parts departments because of discount
pricing from competing dealerships.
Who makes the decision to go on State
Farms RPM report with poor parts price
numbers, the body shop or parts side?
No matter who makes the decision, they
both lose.
- Vendors are already resistant to
quoting prices knowing full well that
the body shops already have preferred
vendors. Why quote if you aren’t going
1:32 PM
to get the order? What is the purpose
of having multiple vendors search their
inventory, determine availability, quote
on each part, knowing full well only
one of them will secure the order? It is
obvious to anyone that it creates further
inefficiency for the supplier side of the
industry, wastes time and resources, and
is driving a bigger wedge between the
buyer and seller. Divide and conquer?
Are these the efficiencies that State
Farm promised to the vendor side of
the equation or just more sales? Carrot
anyone?
- As buyers we have honed our vendor
list to the suppliers that are going to
provide the best services that fit our
business model. State Farm already
has the tool (RPM report) to track
our performance. Why are they trying
to drive a wedge between us and our
suppliers?
- This program is not going to be free.
How much will vendors pay to cut each
others’ throats and live on razor thin
margins?
- The biggest area for problems is
going to be in the used part arena. If there
ever was a market where the quality is
subjective and inconsistent, this is it.
The price quotes/bids on used parts have
been outrageous in their disparity. Not
(Continued on page 18)
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17
18
Parts Trader Experience
to mention, the inherent delays due to
such inconsistency are crazy. The reason
I have a very select group of used part
vendors I am willing to work with is to
keep them competitive, maintain high
quality and provide excellent service.
State Farm already has access to
nearly all our repair information thanks
to our information providers (another
story) and the fact that their 42 million
policies encompass 18+ percent of the
P&C marketplace. Now they want to
close the circle and have it all. So along
with labor rate suppression, they can
now control our parts profit margins.
How many repair facilities can afford to
lose points on their bottom line through
the combination of reduced profit and
added administrative handling costs
while still maintaining the standard of
care that is demanded by State Farm, our
customers, and of ourselves? Further,
how can any carrier expect our repair
facilities to maintain acceptable levels of
training and reinvestment in equipment,
while simultaneously minimizing the
ability for our businesses to make a
return on those capital investments?
(Continued from page 17)
For an example of the financial impact
to your business I would refer you to the
very concise article circulated by the
SCRS on their website in early April. It
is a very graphic, real world analysis of
exactly what we are seeing in our own
business examples. I can tell you from
direct experience it is not speculation.
With this program in its fledgling
stage, it is time for the collision industry
to pick the hill on which to die on, and
die it will if this intrusion into our last
profit center is breached. State Farm and
the insurance industry are going to use
this program to make our vendors as
dependant on them as we have become.
State Farm has already stated publicly
they are going to share this program with
other insurers.
That said, it is our job to inform and
educate our vendors of the pitfalls this
program holds for both us and them.
Our sharing of this information will
help prevent them from being sucked
into the “insurance dependant vortex”
we repairers find ourselves in. We have
no excuse not to do this, as the vendors
can benefit from our experiences and
business insights. The dangling carrot
doesn’t taste so good after we caught
it, does it?
A disclaimer: No boycotting or
collusion allowed!
Just tell your vendors the truth about
your experiences and the control your
“PARTNERS” have over your business.
The unadulterated truth should certainly
suffice to keep them - and us - out of the
cesspool we find ourselves in.
With all that being said, it is easily
concluded that during the study phase
of this program, State Farm could not
possibly have missed half of what is
listed above, much less all of it. It would
be totally unbelievable if they plead
ignorance to these issues with the brain
trust at their disposal. Wouldn’t it?
Rest assured that State Farm will say
they don’t or won’t tell us which vendors
to use or which parts to select (antitrust anyone?). However, we will pay
dearly if our part pricing matrix doesn’t
conform to what they say is the norm in
our “market” by being tiered lower on
their RPM Mystery Scale that their own
employees don’t understand. Numbers,
by the way, that are not verifiable under
any management system that any of us
use.
I can just visualize their supervisor
looking me in the eye and saying “If you
don’t like it you can always withdraw
from the program.” No discussion!
Make no mistake that the velvet glove
they wield covers an iron fist.
Thought for the day:
Who benefits from this program? You
can draw your own conclusions, but it
isn’t us, our customers, or our vendors.
In closing, I would like to apologize
for the fact that this is being published
anonymously. I have never been afraid
or ashamed to use my name on any
articles or commentary I have provided
in the past.
The reason is obvious: I am simply
afraid for the future welfare of my
business if I was to include my name,
and for that I am ashamed! But while
we may have to suffer in anonymity, we
do not have to suffer in silence. Educate
your colleagues and your parts suppliers.
Be certain to know where you stand
and what you wish to do BEFORE this
program enters your market too.
19
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