by Debra Levy
Interlite Glass Distributors of Bensalem, PA, has taken a leadership role in educating its customers. Its president, Dennis Farrell, has worked hard to gather and quickly disseminate to his customers information about things that might affect them. Farrell is also outspoken in his concern for independent glass companies, which he says account for 93 percent of his companys business.
Interlite organized one such educational program recently at its headquarters outside Philadelphia. I was honored to be part of a panel of presentations about the future of the auto glass industry. With me on the panel were Pete Gerharding of Carlite, who discussed his companys new program CARS, and Bill Hardt, assistant vice president for State Farm Insurance of Bloomington, IL.
Gerhardings presentation about the CARS program was most interesting and will be the subject of an article in an upcoming issue of USGlass. But it was Hardt who definitely ignited the passion of the audience.
As everyone who does any AGR business knows, State Farm recently decreased the amount of the offer in the offer and acceptance (O&A) program to 80 percent off the NAGS List Price in many areas. The insurer also links its offers to geographic areas (cities, suburbs, rural, etc.), and it changed the categories of some of those, as well. Most B areas became A areas, resulting in a lower offer from State Farm.
Hardt said the changes were a result of the large increases in NAGS prices that occurred with the release of the latest NAGS calculator. We weighted the NAGS increases against our book of business, said Hardt.
He said there were a number of other factors in his decision, and chief among them was a review of the prices being offered for cash sales. Theres an awful lot of cash discounting out there, he said, and this is a big issue for us. What the cash prices are doing is helping us decide what we offer, because we have an obligation to provide our policyholders with the lowest prices available.
In one particularly heated exchange, an extremely concerned AGR business owner accused State Farm of trying to put him out of business by offering prices at which he can not make a profit. I cant get my glass at the same prices as companies that manufacture it or who can purchase it for less.
Hardt responded by saying that while he understood the gentlemans concern, his company was not about to subsidize companies that, for whatever reason, were not as efficient as others. Anyone who reads this column occasionally knows that Mr. Hardt and I would disagree about the cash discount issue. And Ive talked with quite a number of people about the 80-off offer. Some have told me that to accept such an offer would do them in; others have said that they can still make a good profit at those rates. It seems clear that the rates at which you buy glass are just as important as the rates at which you sell it and since you can only sell it to State Farm at what they offer, you had better be able to buy it well.
This is one case where people may not like the message, but should respect the messenger. Mr. Hardt could be hiding behind his voice mail in Blooming-ton, or choosing just one large network provider instead of explaining his program and answering questions before independents as he has chosen to do.
In fact, he will be doing the same at our upcoming regional expos, the next to be held in Vancouver, BC, in August, where you can ask him your questions about State Farms programs yourself. For more info, see the supplement enclosed with this issue.
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