Retro News: May 1996, 2001, 2006, 2011
Written by John Yoswick, Autobody News
Published April 26, 2016
ASA Lobbyists, Allstate Acquires Sterling, Recycled Parts Market Share, Chinese OEMs
20 years ago in the collision repair industry (May 1996)
At the 1996 Automotive Service Association annual convention in Washington, D.C., the association brought together a panel of attorneys to address complex but critical questions, such as if preferred provider networks a violation of antitrust laws.
Don Randall, who retired in 1993 as ASA lobbyist and legal counsel, moderated the discussed and reminded ASA members that it is often difficult to provide “black and white” responses on legal issues.
“The law is not an exact science,” he said. “It is an ever-evolving, live institution.
Randall asked the panel: Do laws allows insurers to establish direct repair programs, or could such relationships be seen as an illegal “tying arrangement,” tying the purchase of a policy to the consumer’s agreement to use certain shops for repair?
“I’m not sure we have an answer to that now,” George Slover, an attorney with the U.S. Department of Justice Antitrust Division, said. “All that the antitrust statute says about this is one sentence: no contracts, combinations or conspiracies in restraint of trade.”
David Snyder, an attorney with the American Insurance Association, said he felt the law was more clear on insurance programs.
“These types of plans have already been repeatedly challenged in federal and state courts, and repeatedly upheld under the antitrust laws,” Snyder said.
– As reported in Collision Expert
15 years ago in the collision repair industry (May 2001)
Allstate acquisition of Sterling Collision Centers, a consolidator with 39 collision repair shops in seven states and nine metropolitan areas sent shockwaves across the industry much like State Farm’s non-OEM parts verdict.
“It will change the industry, one way or the other,” predicted John Rattan, a multi-shop owner in Dallas, Texas. “If Allstate succeeds, you’ll probably see other consolidators selling out. If they don’t buy or open any more shops, it will answer the question once and for all about insurers owning body shops.”
– As reported in Autobody News. It’s not clear the question has been answered once and for all, but a 2003 law passed in Texas prohibiting insurers from owner body shops there largely put the brakes on Sterling’s growth as an Allstate subsidiary. Sterling added fewer than two dozen shops in the 13 years it was owned by Allstate, though it did double its sales to about $200 million by 2014 when it was acquired by Service King. Rattan remains CEO of The Body Shop, a 3-shop operation in the Dallas-Ft. Worth area.
10 years ago in the collision repair industry (May 2006)
In 2006, Don Porter was a national claims consultant with State Farm and a speaker at the Automotive Recyclers Association event. He retired from State Farm in 2012, and in 2014 became CEO of the United Recyclers Group.
Don Porter, a property and casualty claims consultant with State Farm, kicked off the morning session of the Automotive Recyclers Association Mid-Year Business Development Conference outlining his company’s interest in increasing the amount of salvage parts used in repairs – and what he believes individual recyclers and their industry as a whole can do to increase their sales of parts for use in collision repair.
Based on his company’s numbers, recycled parts as a percentage of total parts sales has remained stagnant – at between 12 and 13 percent – from 2003 through 2005, while the aftermarket segment is rebounding to reach a similar market share (after declining to a low of 9.2 percent in 2000).
Porter said in order to increase the use of recycled parts, an automated approach to sourcing those parts is necessary, to provide immediate availability and condition information and to reduce the number of contacts to individual recyclers by shops and insurers. Convincing shops to use more of the parts, he said, will require helping shops identify “best in class” recyclers that use systems to ensure on-time delivery of the correct part in the described condition.
– As reported in Autobody News. Spending on recycled parts peaked at just over 14 percent (of total dollars spent on parts) in 2001 according to data from Mitchell International, then has drifted downward back to between 12 and 13 percent, just as it was when Porter spoke at the recycler event. (Non-OEM parts, on the other hand, have increased steadily to a account for more than 16 percent of total parts dollars.) Porter retired from State Farm in 2012, and in 2014 became CEO of the United Recyclers Group.
5 years ago in the collision repair industry (May 2011)
Speaking at an industry event, Greg Horn of Mitchell International offered a look at some of the vehicles that Chinese automakers – a number of which have plans to enter the U.S. market – currently produce.
Horn said Great Wall Motors is predicting a U.S. launch in 2015, following the model used by Kia some years ago, with sales in several states and entry into the rental fleet. The company will use feedback from that limited launch to make improvements before selling on a broader scale.
Horn said the expected low cost of early Chinese vehicles in this country will likely lead to more totals than repaired vehicles. But the success of any of the Chinese automakers here will largely be dependent on their ability to set up the replacement parts infrastructure that is needed, Horn said. Sterling Motors and Daihatsu, he said, failed largely because a lack of parts availability led to repair delays and total losses.
“The folks that have the best infrastructure for supporting their brand will be the Chinese brands that survive going forward,” Horn said.
– As reported in CRASH Network (www.CrashNetwork.com), May 30, 2011. Despite Great Wall Motors’ optimism five years ago, it has yet to sell a vehicle in the United States. The company has been plagued in recent years with quality issues, recalls and unpopular models, but it remains China’s largest sport utility vehicle maker.