I’m sure by now you’re wondering with anticipation if the PartsTrader implementation is coming to our market and when. There’s been talk of it all year, and so far there hasn’t been anything more than swirls of smoke and nervous chatter. Unfortunately, as it stands right now there is no showing of State Farm coming off its course to see this pilot into finality.
Regrettably, the real issue is that State Farm won’t find a shortage of shops that are willing to get on [or back on] the Select Service program in spite of the potential ramifications they may face using the PartsTrader program. Because of the economic pressures and over capacity in our industry, this is the [seemingly calculated] perfect time for the insurer to strike. Also, there are an overwhelming number of shops who cannot survive in a non-DRP model and are already so engrossed in the program that really have no choice but to participate.
There is rumor that some of the shops put on the program in the pilot market(s) to replace those who got off were previously removed because of shoddy work. If that is true, then it is a sad day for State Farm. The policyholders they claim to be protecting by implementing this program are now potentially subject to questionable repairs. I’m sure if they were given the choice of a few dollars in premium and premium repairs, it would be a no-brainer. Truly, they are not even aware that this is going on and are not given a choice in the matter.
I want you to use the tear-out on page 50-51 to inform yourself and anyone you work with about what the potential issues with this program could be. It is your choice when the program gets here whether or not you participate. My hope is that you make the decision knowing all the options and problems you could face down the road.
The biggest concern I have is not whether or not a single repairer participates. It is when there becomes a majority in a market. That’s when State Farm will look at us, as they always have, and say that then ALL repairers in that market are expected to participate because it would be “fair and reasonable” to expect them to do what a majority has already been doing.
I’ve used the example of body labor prices for mechanical operations. Even though the guides say that certain operations are mechanical, the insurer has often mandated non-Select Service shops to only charge body labor because the majority in their market (mainly Select Service shops) are only charging that much. Taking advantage of paying less money to their program shops and pushing it on the others is something this company has already been doing in our area.
Why do you think they’re doing this? If you think it’s to improve the repairer efficiency, then you need to put the red Kool-Aid down and ask yourself one question: Why would you implement a program in your business? The answer is clearly, to save money [or make more on existing work].
Just remember that through all of this turmoil, you are in business to make a profit. Otherwise, what reason do you have to do all of it? Profit is not a dirty word and it shouldn’t be used to browbeat our industry into using an inefficient, unnecessary program that will likely cause the degradation of the only remaining profit center left. When that is reduced to rubble, what would you have left?
– Jordan Hendler, Executive Director