NAGS – Déjà Vu
I just finished reading the feature article in the March/April 2004 issue of AGRR about the upcoming NAGS “Rebalancing” and I’m in utter disbelief. Does Jesse Herrera know what’s going on here? Does anyone at NAGS remember the last go around, or do they just think we forgot?
Let me take you back to 1998. At the time Catherine Howard was coming up against some heated opposition regarding the proposed “Revaluation.” The criticism was that NAGS was in bed with the insurance companies and was, in effect, price setting with its “secret formula” for determining NAGS List Prices®. No longer would it be based solely on truckload prices. It would also include various acquisition sources as well.
Howard explained how this was going to be good for the industry and that it would restore credibility and stable pricing. Shops would ultimately get fair labor rates resulting in better margins overall. The answer to all the fear and confusion, Howard said, was communication. Once NAGS made everyone fully aware of what the changes would be and when they would occur, shops would have the time to prepare for the change and all would be fine. She was confident the insurance companies would buy into this new pricing structure.
Needless to say, no one believed her then any more than anyone believes Jesse Herrera today. In fact, a group of IGA members formed a committee and met with Catherine in Columbus, Ohio to get some answers. I was one of those members and I remember vividly how convinced Howard was that this was the answer. When asked how they would arrive at the new List Prices, Howard could only explain that it was based on a formula and although she couldn’t tell us what that was, she said it was going to be fair. We told her that by calculating list prices using various acquisition sources in addition to manufacturer truckload prices, NAGS would effectively be price setting. She made it very clear that NAGS was merely a publishing company and they did not set prices. Believe it or not, both comments came out of the same side of her mouth.
She went on to amaze us by making the statement that if this did not work, NAGS would get out of the business and let the industry decide for itself how to price parts. As we all can see, that hasn’t happened and now we’re right back where we were in 1998 only with smaller margins, flat labor rates and non-existent profits. All entirely our fault, per Catherine Howard, because we failed to stand up to the insurance companies and demand fair labor rates.
So here we are in 2004 and what is Jesse Herrera saying? He says that the answer for the new “Rebalanc-ing” fix is for everyone to be fully aware of what the changes will be, when they will occur and what they need to do to prepare for the change. Unbelievable! Like Yogi Berra said, “It’s Déjà vu all over again.”
Cindy Ketcherside of JC’s Glass said it well when she told AGRR that “we still don’t understand how they are getting their benchmark. Until they get past this mystique of how it’s done and calculated, I think we will end up with the same problems we have always had.” I agree. No one is going to be happy with NAGS messing with glass prices until we can get the insurance carriers to weigh in and commit to some kind of a reasonable labor structure first.
In the words of George Santayana, “Those that fail to remember the past are condemned to repeat it.”
This is the first time I have addressed a situation posted on GlassBytes (see “Chicago Group” Begins Unveiling New Pricing System, posted on GlassBytes April 26, 2004). I am appalled at the pompous attitude of Mr. Herrera with his statements that cannot be supported with facts. He insinuates that the Chicago group is less informed than he.
I do not belong to the Chicago Group, however I have looked at their approach and program and I believe there is validity to their proposal. Mr. Herrera appears to be fighting for his job and not the programs that will allow the independent glass shops to prosper. I am the president and chief executive officer of a group of 26 stores located in four states, Glass 1.
I will cast my support for the Chicago Group and hope to eliminate unfair business practices as I see them presented by NAGS. For the life of me, I cannot understand the role of NAGS in telling independent glass companies what to sell their products and services for. Whatever happened to a “free enterprise system?” How did the insurance companies get our cost and then determine what they are willing to pay? What other industry can you name that lets the customer control the pricing even if the company cannot profit at that level? Name another business where the customer is invited to participate in pricing.
As previously stated I support the Chicago Groups efforts to right a wrong and let us do business the old fashioned way using a “free enterprise system.”
president & CEO
Talk about Safety
In Volume 6, Issue 3 Leslie Shaver writes an article titled Safety Stand.
The photos that accompany the story show two different techs performing installations. Are the techs pictured employees of the featured companies in the story? I noticed that both the techs are not using safety glasses, yet the articles main concern is safety.
AGRSS requires “technicians installing replacement automotive glass shall be fully qualified for the tasks they are required to perform. Such qualifications shall include, at a minimum, completion of a comprehensive training program with a final exam and continuing education component.”
All training programs require the use of safety glasses when removing auto glass. Just an observation.
Editor’s Note: The pictures accompanying the article in question were for illustration purposes only, and should not be taken literally.
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