Wednesday, 01 August 2012 10:29

Alliance of Automotive Service Providers of Illinois (AASPI) Opposes State Farm Parts Procurement Program

The Automotive Service Providers of Illinois (AASPI) released the following statement in late July:

After several weeks’ consideration, the Alliance of Automotive Service Providers of Illinois (AASPI) Board of Directors has determined that it will stand with AASP National, SCRS, and many other state and regional collision repair associations who now openly oppose the intrusion of yet another insurer-engineered system into the business of collision repair.

PartsTrader has been touted as a mechanism that improves process efficiency while not much has been said by its promoters about profitability. State Farm’s George Avery and PartsTrader make claims of “Win–Win–Win” scenarios for repairers, parts vendors and insurers. Yet, parts vendors and repairers who have been involved point out the added labor to operate within the cumbersome system and the time lost waiting for the bidding process to work actually costs them both time and money.

Additionally, in a report recently generated by SCRS, of repairers who have dealt with this system since 2003, “There was not a single shop that didn’t regret accepting the new process in their business,… nor a single shop that did not feel it opened the door to further insurer influence over their business.”

Despite abject failures in all pilot areas and despite industry-wide resistance to this program by repairers, associations and parts vendors, State Farm fully intends to implement it. George Avery indicated as much with a most revealing comment at the July Collision Industry Conference forum: “There is going to come a time, my guess is, that when these things are fixed and there’s going to come a time when I will say to you as a businessman, 'Yes, this is the program,'" Avery said. “Then you, as a businessperson that’s on Select Service, will have to decide if Select Service is right for you.”

At that same meeting, one pilot repairer made points that the system is very slow and ungainly with these words: “I feel like the donkey that got dumped into the Kentucky Derby.” With regard to the administrative cost, he said he “has to have a parts employee at the computer about six hours a day to manage the program… That represents about $50,000 a year out of my pocket to administer the program.”

Repairers work hard for every dime they get. Over the last two decades, profit margins have become thinner as repairers have become more burdened with administrative tasks. Repairers have been taught to do more work for less compensation. With that bit of brainwashing done - PartsTrader and State Farm now expect they can cajole repairers to willingly do 'even more' work for 'even less' money. State Farm and PartsTrader are giving repairers manacles (handcuffs) and asking that they be worn proudly as though they are jewelry.

AASPI encourages its members to wisely consider whether this insurance “partnership” has instead turned out to be a “slave ship.”