A selective disservice

"If you choose to give no discounts whatsoever, that's perfectly fine with us. I don't have a problem with that. But if your business model includes some discounts, then we want to be part of it."

- George Avery of State Farm Insurance, explaining that his company's switch to a new direct repair program will require participating shops to offer State Farm any discounts the shop offers any other insurer.

"The repair industry has said, 'Look, you really need to tailor the number of repair facilities you have in a market associated with your capacity needs.' They told us we had too many. And we are not doing a very good job getting out and visiting with you with [your performance] numbers. So we've agreed that to manage the program, maybe we need to reduce. And if we reduce, we need to look at the top performers."

- State Farm's Avery, saying there will be fewer shops participating in the new program than in the company's existing "Service First" program.

"It's alright, really nothing different except they don't pay us for total loss sheets or storage on total losses. That equates in our shop to I think between $5,500 and $7,500 a year, so there's another profit center that's gone. In our area, we had one shop that opted not to participate in the program, and we had one very small shop that they did not allow on the program. Besides that, everybody else that was Service First is on. So I haven't seen any change (in State Farm work volume). I look at it like this: If at some point the rules were to change and I don't like the rules, then at that point I'll get out. It's not horrific. We just have to deal with it and go. Time will tell."

- Kurt Zimmer of Kurt's Autobody Repair Shop, Inc., in Bloomington, Ill., speaking last Spring about State Farm's shift to the new program in his area.

"I would not sign the contract as presented, and they told me it was non-negotiable. They want the lowest rate you charge, when I don't feel it is any of their business what I charge other people. They should be negotiating their own rate. Someone else may be easier to work with or give me more volume and be entitled to a better discount. If they decide the repairs are overdue, and they feel it's the shop's fault, the shop has to pick up the rental. They decide that. It's so one-sided, the whole contract. I don't think it's good for the industry. A bad deal is a bad deal. A bad contract, no matter how many cars they want to send you, is a bad contract."

- Kelly Swenson of Carty's Collision Center in Ontario, Calif., also speaking last spring about the new State Farm program.

Next target: parts procurement

"I guarantee you there will be parts procurement programs. I'm not at liberty to specify just what they will be."

- John Bosin, chairman of the Collision Industry Conference (CIC) Parts Committee, speaking about insurance company plans to purchase collision repair parts directly, based on the committee's interactions with about eight insurance companies.

"Parts sales are 42 percent of my business. This scares the daylights out of me. I can see this putting me out of business and a whole lot of others out of business. You're going to turn Class A shops into chop shops."

- Craig Griffin, of Laney's Collision Center in El Dorado, Arkansas, speaking at CIC about insurers' direct purchase of parts.