Bright Side to the PPG-GM Agreement
The industry has been mulling over the new distribution agreement between General Motors and PPG Industries to offer a direct delivery program for genuine GM windshields that might result in the vehicle maker installing branded GM windshields at its dealerships.
If GM dealers do get into auto glass, their insistence on getting paid a good price could bode well for the auto glass industry, according to Scott Owens, owner of Excel Auto Glass in Lake Katrine, NY.
"If they [dealerships] do it [install more windshields for insurance], it will only be better for our industry," Owens said. "A dealership is not going to accept the rate of $35 an hour and have to prove to the insurance company or processor that its costs are at 10 percent of markup. That will create some turmoil. If a customer has an insurance claim and chooses to go back to a dealer, all the auto glass industry needs to see is that insurance companies are paying a better rate. If the insurance company pays the dealer rate at $92 an hour to GM then we have grounds to really cause trouble."
Hal Hare, corporate claim manager for State Auto, a regional insurer based in Columbus, Ohio, isn't so sure that dealerships won't lower their price demands for the insurance industry though.
"Most dealerships recognize the lucrative insurance segment, and are quite willing to work with us," Hare said. "Remember, insurers already have strong working relationships with the dealerships through the body shops. The dealership body shops are competitive in their markets, and I would expect their glass operations to be competitive as well."
For his part, Bob Bischoff, glass manager for State Farm, is taking a wait-and-see approach.
"It remains to be seen how the market reacts to it [GM dealerships doing auto glass] and whether there's influence there," Bischoff said. "Then we would have to see how it relates to the State farm policy and their claims. We have always have to look at any impacts on the market and make a decision on what that means to State Farm and their customers and the service they can get within the glass industry itself. It's tough to know what going to happen."
More industry discussion on this subject will appear in the March/April/May issue of AGRR magazine.
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