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The Death of SB 1460… For Now by Ed Attanasio
Some legislative bills have more lives than cats. Usually, when any piece of proposed legislation gets defeated for one or more reasons, it is then re-written, re-packaged and amended, hopefully just enough to make it through in a different form that will appeal to more legislators the second or third time through. If it eventually becomes a law, it means it survived several rounds and reincarnations, in almost every case.
Recently, SB 1460, known as the “aftermarket crash parts bill,” died when it didn’t get enough support to go up for vote by the Senate Committee on Judiciary in Sacramento on April 24. Written by Senator Leland Yee, the bill would have basically allowed the use of certified aftermarket parts in repairs, as long as they “shall be presumed sufficient to return the motor vehicle to its pre-loss condition.” Although it looked fairly harmless when read by the untrained eye, See California SB 1460, Page 8
CCRE’s President Tony Lombardozzi talks with Autobody News about his organization’s vision for a truly independent collision industry
by Chasidy Rae Sisk see p. 14
IA L SP E C T ISSUE PAIN
REFINISH PAINT &
of 3 issues
OGIES TECHNOL
VOL. 30 ISSUE 5 JUNE 2012
State Farm’s PartsTrader Program Encounters Significant Opposition, Not Just From its DRPs State Farm’s forced implementation of its PartsTrader e-bidding process within its Select Service Program shops has ignited a firestorm of criticism from the industry, not just from its own DRPs. Usage of the PartsTrader software, developed in New Zealand, has been required by the insurer in several test markets nationwide, including Tucson, AZ, and Birmingham, AL, however several sources have reported shops dropping the Select Service Program as a result, up to 40% in some markets. The Alliance of Automotive Service Providers (AASP), the Society for Collision Repair Specialists (SCRS), and the Automotive Service Association (ASA) as and numerous independent industry observers have come out with strong statements cautioning their members against State Farm’s bidding process for parts procurement. AASP called it “an unprecedented and uninvited intrusion into the business of collision repair.” The AASP released the following statement, which reads in part: “Despite posturing from the largest national insurance carrier on what it believes to be positive attributes of the program, collision repair facilities, parts suppliers, parts manufacturers and interested parties around the country have been consistent in their perception that this type
of activity will ultimately harm their businesses and the customers they serve. “Collision repairers are in the business of selling parts, labor and materials at a retail level. Each of these revenue sources contributes to the overall success of the roughly 35,000 small businesses across the nation, allowing the business to provide employment opportunities to individuals within their community and invest in the necessary equipment and training needed to provide customers with safe, quality repairs. As is the case with all types of business—including the business of insurance—the pursuit of a return on investment (profit) is a core principle, and one that collision repairers should neither apologize for nor relinquish to the influence of other parties. “Insurers are in the business of insuring risk and then settling losses at market value when those losses occur. As the payer of claims, insurers should not be “market makers” for pricing of individual products and services that are components of final invoices. To date, insurance pressure and influence over collision repair market pricing has driven average profit margins to low single-digit figures, despite the fact that the business of collision repair has a high cost of entry and requires ongoing capital inSee PartsTrader, Page 4
Summit Software’s President and Head Sherpa Frank Terlep talks with Autobody News about the state of Digital Media for the Collision Industry
by Melanie Anderson see p. 50
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