ABN: What do you think of the PartsTrader pilot program?
Plier: My opinion of the Partstrader program is not positive. The information provided to me by repairers on the program, from individuals that were in meetings with State Farm employees during the test pilot roll out in Alabama, the information that is being provided by the many different publications and the information provided by State Farm Consultant George Avery at the recent Georgia Collision Industry Association meeting indicate to me there are a lot of questions that State Farm and/or PartsTrader either refuse to answer or do not have an answer for. I would suggest everyone to consider if something is mandated, why is it being mandated? Items, programs, actions, etc. that have to be mandated usually have a lot more bad for a large multiple sectored group than good. Is this the reason the portion of the Select Service agreement is being actively enforced on this program? Any repairer on the Select Service program agreed if requested/required by State Farm to use a parts locating/procurement program they would. There are several others sections within the Select Service agreement with the same type language that repairers have agreed to.
ABN: Why do you think State Farm introduced this program? Where do you think State Farm is going with it?
Plier: I feel there are multiple reasons. First and for the immediate time, I feel State Farm was aware of manufacturers offering parts pricing match programs and believed the implementation of a program such as PartsTrader could lead to suppliers taking an aggressive approach to expand business by reducing prices in a bid/quote program such as this. However, I believe the bigger purpose here is if successfully implemented, this would open the door to the other sections of the Select Service agreement requiring additional actions from repairers as agreed to such as this.
ABN: How do you think the program will affect the industry? Repairers are saying this pilot program is inefficient and costs them more than its worth.
Plier: I feel if State Farm is successful with this program resulting in mandated use of locating and procurement systems, the balance of the insurance industry will quickly follow with the same or similar programs. My opinion is this will not be good news for the consumer. I know State Farm is saying this is intended to be focused on claims expense and no one should be against anything that might result in reduced cost, and according to State Farm, a possible reduction in premiums for policyholders. I am currently a State Farm policyholder; I definitely want my premiums to be as cheap as possible, but even more importantly, I want my vehicle repaired properly. For repairers to keep up with the ever-changing technology, training is a must. Equipment requirements must be maintained so if programs such as this affect industry members’ ability to meet these needs it is not good. I have read and heard Mr. Avery say State Farm does not want to tell repairers who to buy from, but I have not heard State Farm address the actual inefficiencies that to date I have seen this program cause to repairers and other inefficiencies I have been told of by repairers. There does not seem to be any concern from State Farm and/or Partstrader that this program does indeed have an additional labor and administrative time/expense associated to it for the repairer and supplier. I read in an article, that according to the writer, the repairers they had spoken with suggested an average additional 30 minutes per day. The repairers I have spoken with in Birmingham suggest to me they approximate spending an average of an additional 30 minutes per claim. Birmingham repairers note you may have some claims that only require an additional five to ten minutes of additional time, but you also have those claims they may require an additional hour of administrative time. I have not spoken specifically with any parts suppliers on the PartsTrader list, but feel any supplier on the Partstrader list is also incurring additional administrative time and expenses if they are following the rules of the program.
ABN: Does this program offer any benefits to the repairers?
Plier: Based on the current information provided and from the feedback received from Birmingham area repairers, I have not been able to identify what I would consider a benefit for a repairer on the program. State Farm has stated they have received positive feedback from their evaluations, the only thing is, to my knowledge, State Farm has not to this date provided a single item with the industry that can be viewed as positive feedback. If there has been anything positive for the repairer, I have not heard nor have I read about it.
ABN: With repairers highly wary of the program, what do you think the solution is?
Plier: I feel the distrust and confrontational nature of this industry between the two parties are much deeper than this program. I am not sure there is a simple solution for this issue if all sides must benefit. If attempts are made to identify efficient alternatives, both sides must work together to identify the many different possibilities. There already exist electronic ordering opportunities used by many repairers, so if there is ever to be a solution that all sides agree to, I feel there will be multiple businesses/ venders to choose from. I do not feel mandating a particular program is the answer.
ABN: Was State Farm too aggressive in launching this program?
Plier: Considering the information that has been provided to the industry, ‘yes.’ I do not believe the details had been thoroughly reviewed and considered.
ABN: What does it suggest to you when State Farm can’t come up with a single benefit to repairers?
Plier: Maybe because there is not a single benefit associated to the shop in regards to this program. I believe if State Farm had identified benefits for the shops and or the suppliers, we would all have heard about them by now.
ABN: What kind of damage control could State Farm do now?
Plier: I’m not sure there is a definite single thing that could be focused on here. There are many issues in the repair industry that need to be addressed for the “RIGHT REASON”—the consumer. Many of these issues have been around for many years, but have never been addressed. As rules identified in repair agreements continue to expand, the magnification of the many issues grow. For example: the need for an independent third-party survey process to identify a competitive pricing range; the agreement that the repair procedure pages are not pick and choose, but will be honored completely at all times, just to name a couple.
ABN: What should affected shops be doing right now about PartsTrader?
Plier: My recommendation would be for each and every repairer on the Select Service repair program or any repair program to review their program agreements and then reread them again. List questions or concerns identified in the agreements and contact the particular insurance company to discuss any questions or concerns. After any discussions, make a business decision based on consideration of all factors of what you feel is in the best interest of your business.
ABN: What is the background of State Farm’s previous efforts on this issue?
Plier: State Farm had a trial program in California and Indiana in 2009, but discontinued the program after Chrysler filed for bankruptcy and GM accepted a government bailout in 2009. The trial was structured differently then as compared to the PartsTrader program now.
Plier started his business, CARE, in 2010 after leaving State Farm. His goal, focus and efforts with Consumer Auto Repair Excellence, Inc. has been to assist repair facility owners and manager with a better understanding of simple business principles, such as understanding their business operating cost and the importance of quality control programs, and to understand simple things involved in the repair process, that if itemized, they should and could be compensated for by the majority of the insurance companies.
The services provided by CARE also involve assistance to repairers by investigating issues and questions that repairers encounter and providing documentation to back the recommended positions. Plier assists repairers with identifying possible solutions that would be beneficial to the industry and in particular focused on what is appropriate and in the best interest of the consumer.
Steve Plier, President
Consumer Auto Repair Excellence Inc. www.consumerautocare.com