Volume 14, Issue 4 - May/June 2012
Thing One and Thing Two
It’s a fitting title but so relevant to our industry today. I am talking about that famous Dr. Seuss children’s book, The Cat in the Hat. There is no doubt that the North American automotive glass repair and replacement industry is under siege by the chaos created by third-party administrators (TPAs). Just as in The Cat in the Hat, these TPAs have taken advantage of the inattention of the independents who still happen to be the service leaders in the automotive glass repair and replacement industry.
As I write this article, independent glass retailers in four states are waging an all-out offensive, through legislative efforts, to get this “cat” under control. While progress is being made in these states, the cat in our story has summoned some help to “steer” public perception in favor of its own exotic and exuberant form of chaos.
For example, Tom Feeney, president and CEO of Safelite, recently gave an interview for the March 2012 AGRR™ magazine/glassBYTEs.com™ newscast about the recent anti-steering bills in Michigan and North Carolina. In this interview, Mr. Feeney said, “The legislation should be to regulate competition, not competitors.” This statement is another example of the fear, uncertainty and doubt being spread to mask a real agenda. The reason the legislation was introduced in the first place was to put all on an equal level and give no single business an unfair competitive advantage. All automotive glass retailers share the freedom to compete in their respective markets on a cash basis, but the tables turn against them when they’re dealing with insurance claims. The unique aspect of Safelite that Mr. Feeney seems to forget is that in addition to acting as a TPA, it also operates automotive glass repair and replacement locations, something other TPAs do not do. On this basis, its ability to compete relies heavily on the ability to convert the insured who contacts its claims services side.
Steering of Reported Claims Quite Frequent
If there wasn’t such a big need for Safelite to convert these claims to its own service centers, then why is the company spending so much time and financial resources to see that these fair legislative issues are killed? And why haven’t the other TPAs backed Safelite’s efforts if the legislation is harmful to “competitors?” The answer is obvious, but just in case it is too obvious, the answer is: it isn’t harmful to anyone except TPAs that also operate automotive repair and replacement centers. Those who act as gatekeepers for automotive glass-related insurance claims are in an undeniable financial conflict-of-interest position of influencing consumers toward their own installation and repair businesses. This fact is what is harming consumer choice and competition, not our legislative efforts.
Mr. Feeney and his associates make claims that they are trying to preserve quality of service and that these legislative efforts will diminish this aspect. “It’s the legislature picking winners and losers regardless of quality of service,” said Barbara Meaney, a lobbyist for Safelite, in a recent article in The Arizona Republic. The issues at hand don’t stem from a lack of quality of service. The reality is that the independent segment of the industry continues to support and dedicate itself to the safe repair and replacement of automotive glass through organizations such as the Auto Glass Safety Council™ (formerly the AGRSS® Council Inc.) and the ANSI/AGRSS 002-2002 Automotive Glass Replacement Safety Standard.
In The Cat in the Hat, the cat puts everything back in order as penance for the chaos he has created and departs just seconds before the children’s mother returns home. At this point, independent auto glass retailers can only wish that their story could have the same immediate ending, but, unfortunately, it has only just begun. Citing the same interview earlier, Mr. Feeney went on to conclude, “The current environment we’re finding ourselves in has everyone worked up in thinking it is one thing when in fact it’s entirely another thing.” Alas, Thing One and Thing Two. It is this same vague commentary that has allowed Safelite to cloud the ongoing legislative processes through its lobbying efforts.
Thanks to the hard work of many independents across the U.S. and Canada, the fight continues. I feel very optimistic that the marketplace will prevail in favor of the independent automotive glass retailer, but only if we can get the continued support needed to keep up the pace. I urge every retailer to consider joining the IGA and report steering on its website. With your help, we can get Thing One and Thing Two back in their box.
Alan Epley is president of the Independent Glass Association (IGA). He also serves as president of Southern Glass & Plastics in Columbia, S.C.