Mark 2

May 1, 08 - 9:02 PM

Nags Patterson

"“If there was no NAGS benchmark, the carrier would have to figure out a way to determine the pricing,” Patterson said."

Hey Mr Patterson, you mean the insurance carrier? So without NAGS they would have to use something like, what?? Invoices from shops, mabey?

Opus

May 1st, 2008 - 11:31 PM

Re: Nags Patterson

I wonder if he said that with a straight face???

Anybody watch to see how long his nose grew during his speech??

I also wonder if he wore an American Insurance Institute tee-shirt while addressing the audience??

I'm sure glad he's on my side because gosh darn if he worked for the dark side, it might affect my bottom line

Mark1

May 2nd, 2008 - 9:23 AM

Re: Nags Patterson

"Oliver explained that the numbers are generated by much research, much of which comes from shops who share their retail acquisition costs for glass."

Thinking about this quote from Mr. Oliver of Nags, I would question exactly why ANY shop would "share" acquisition costs with Nags? What purpose could this possibly serve them?

Who are they? Where are they? How many of "them" are there? How often is the data updated? How is it validated and quantified as being actual and factual? What parts and what kind of parts were the acquisition costs "for", exactly? How many total part numbers were actually checked? In what quantities were these acquisition costs arrived at?

And finally, (here's another "I've said this before...") if this is actually taking place to any reasonable extent or legitimate effort, WHY are there thousands of net priced parts in Nags?

Same questions, different day, about the Colonel's secret recipie.

To other discussion/questions that took place in that seminar, the answer is simple. Nags won't make changes that they can't sell to insurers. If insurers won't buy it, they can't make us buy it, and they know it.

It's a good thing we have choices other than Nags to use, otherwise, someone might think a monopolistic situation was in play.

JMHO

Opus

May 2nd, 2008 - 9:37 AM

Re: Nags Patterson

Thanks Mark 1

Nice to hear a cogent observation about the meeting.

Hey !! Why are there so many net-priced parts??

Tothepoint

May 2nd, 2008 - 9:56 AM

Re: Nags Patterson

First of all, what doesn't make sense to me is his statement,"RETAIL acquisition costs". If I sell at retail, and I buy or acquire at another price, how can you combine the two? Retail is not how I acquire, retail is where I sell. Did he mean wholesale acquisition? This statement makes me scratch my head, someone please explain. And like Mark1 said, who would be so stupid to share thier propritory information? How does that guy sleep at night,,,,, oh yea,,,, his bank book covers him! And why does the carrier, or ins co, need to DETERMINE pricing, maybe validate pricing or compare pricing, but he states right out they determine pricing,,, sound like price fixing,,,, hmmm

Opus

May 2nd, 2008 - 10:08 AM

Re: Nags Patterson

If I remember correctly, NAGS once replied that without a national pricing system like they promote there would be a pricing system for every glass shop. That would mean chaos (for whom???)

What Mr Patterson appears to have done is to model his speech with something one would say if appearing before Congress. Say something while saying nothing. He uses NAGS-speak. An internal pseudo-science jargon that masks the fact that it enjoys a pricing monopoly which benefits insurers far more than most common sized shops and distributors.

LArry

May 2nd, 2008 - 11:48 AM

Re: Nags Patterson

Mark2,

I am sorry guy, but you have lost your mind, if your paying lets say 190$ for a chevy windshield and somone else is paying $2 why would you not want NAGS to have your data? do you not understand how a weighed average works??? Its simple economics... If your really paying super high prices and the low baller $2 guy is paying $2 your amount your paying will mix in with the low price creating a higher weighed average.. I have met 3-4 people at shows who submit their data, one of them publicly said it in florida at a show.. so you just dont get it, but thats ok, the only reason I get it is because i have dealt with weighed averages on things before not in this industry.

Mark1

May 2nd, 2008 - 12:24 PM

Re: Nags Patterson

Larry, to your reply to Mark 2:

Please show me one example of how your "weighted average" figures are used to manipulate any industry's pricing in the open marketplace, less any industry that has insurance industry influence, or government oversight such as liquor and tobacco, where taxing of those products is the point of the regulation.

One example will do, then we'll disect that.

To this point, when any consumer with an insured loss presents proof of loss to an insurer, the reciepts of purchase from any vendor, furniture, fixtures, improvements, building contractors, ect. etc. are honored by insurers as valid proof of loss, for indemnification purposes. While they may enter "depreciation" into the calculation, this is not relevant to our discussion.

The point is, this is not happening in the collision or glass industry, and one of the reasons is the influence the insurers have with the data providers.

Who owns Mitchell? Who owns ADP? Who are the investors behind the private equity firms?

Armstead, please help me enlighten Larry, who plays the insurer's game daily, and finds ways to profit in the system, by working within their "allowed" pricing, then chastising customers that want OEM parts in their vehicles.

Larry, to quote you from memory as best possible: "It's just a PICKUP for Christ's sake!", though it may have been a pickup they paid $35,000 hard earned dollars for. Why shouldn't the owner of a Chevy or Ford be entitled to OEM parts just as the owner of a Lexus or Beemer?

Why were there never any "Premium" Domestic parts as there were Foreign parts? We all know they cost as much as triple as these AM parts do, yet.......

Enough...my dander is rising.

Mark1

May 2nd, 2008 - 12:35 PM

Re: Nags Patterson

What timing! Check this out.

"San Diego, CA – April 3rd, 2008 – Mitchell International, Inc., a leading provider of .... solutions to the property and casualty claims and collision repair industries, today announced......acquire(d) the workers compensation medical cost containment business of Fair Isaac Corporation."

"COST CONTAINMENT BUSINESS"?

Ok.....let the speculation begin.

https://www.mitchell.com/mitch/company/mediacenter.asp?range=9/1/2007&pr=158

GlassWoman

May 2nd, 2008 - 3:19 PM

Re: Nags Patterson

Patterson noted that when NAGS develops its benchmarks, a profit margin is included.

“We don’t take that profit margin away,” Patterson said. “The market does.”

What I think is messed up about his statement is how he said a profit margin was figured into the list price. What gives them the right to make up what our profit margin is? Thanks for low balling our profit... jeese

howie

May 2nd, 2008 - 3:41 PM

Re: Nags Patterson

For a comprehensive view of this go to MITCHELL INTERNATIONAL, Then "press releases" Then April 08.
It is very interesting. No speculation needed. It spells out their intentions very clearly.

xs

May 2nd, 2008 - 6:33 PM

Re: Nags Patterson

Its very intresting that OUR SUPPLIERS dont even sells to us off NAGS list...they have there own table to use....hhhhhhmmmmmmmmmm...Why is that????

Larry

May 2nd, 2008 - 8:30 PM

Re: Nags Patterson

Whatever. I am not here to argue with you.

Mark 2

May 2nd, 2008 - 9:58 PM

Re: Nags Patterson

Gosh Larry thanks for setting me straight. I'll send NAGS a thank you right away. I had no idea.

I supposse that if we were all selling the cheapest stuff out there then I would understand the idea of using a weighted average but being that we arent doing that I don't.

That's Ok, we worked half of today fixing other peoples screw ups and made better money on them than if we had done the job in the ifrst place.

Seems the customers wouldnt go back to the approved shop the third time around on any of them and we billed them all out without NAGS.

I just dont know how we managed to bill without them. Mabey it will come to me tomorrow. I'll let you know.

..know it

May 2nd, 2008 - 10:16 PM

Re: Nags Patterson

Larry is right, although it isn't a "weighted" average. Trouble is, there will never be enough data gathered to comprise a statistically relevant starting point across the universe of parts using this method. Everyone involved knows this and don't really care.

Mark is right as well.

There is too much variance in retailers acq. cost and too many other factors to consider to make it a viable option.

The system exists because people pay to use it. Stop paying, stop using it, and it will go away.

the statement that NAGS "includes a profit margin" makes it an unreliable method as profit margin is open to many definitions and thus must include qualitative analysis (opinion) in any method to determine what to apply where. What "margin" is right to start with? Does it change by region (no), does it change by part value? Does it change by business model?

NAGS doesn't (cannot) provide a statistically valid model so they leverage the monopoly status the industry has granted over the last several decades to essentially publish whatever price they choose. This is not new. It has been the case since the first rebalance.

Many people have been saying the same thing for years. The industry continues to use the number. You get what you get unless you do something else.

The industry pricing system is broken, arcane, and rests in the hands of a company that has been a poor steward of it. By the same token, all seems well in San Diego, so why not?

Too bad there are a handful of people posting that on a board where there is 5x more name calling and simple garbage than insightful content. When a group tries to address it, they get some response, but at the end of the day, the same name callers turn around and claim self promotional underpinnings (typical response) and tell the world why it won't work...or simply ignore it and wait for someone else to fix it.

It is a lot more popular and less scary to scream about purported steering and make arcane comments about businesses some aren't even in than it is to face the one thing that has contributed more to "true" margin erosion EVERY DAY than every other issue in the industry combined x 10.

Next NAGS publication, repeat same thing, change nothing, get same result. Type another post. Send in your NAGS check.

Opus

May 3rd, 2008 - 12:55 AM

Re: Nags Patterson

Know it,

Step on up and I'll join you dumping NAGS. Not sure if you referring to my comments but this system is so broken, it should be laid to rest.

I bet that most shops in creating their pricing models do not even consider using NAGS's numbers when bidding jobs other than insurance.

Name any major distributor that is using of have used a "re balanced" NAGs list for parts pricing. I don't believe there are any. Further proof that NAGS in the real world has become passe

It remains in existence because insurers need it for level national pricing and because large glass chains accomodate that fact.
Because of the fact that we are so "Balkanized" working alone in competition against the other, generally in a local regional market, most shops have become powerless or at least have conceded their power over priority or accomodation to receive scraps of insurance work that falls through network cracks.
Looking at Mitchell International website and viewing the type of services offered, any fool can see the niche that Mitchell feels it can fill. It wants to be the information interface between insurers and certain industries.

The ownership of Mitchells has been sarcastically questioned for some time. Whether there is any truth that the insurance industry is a silent partner has been steadfastly denied by employees of Mitchells.

I wonder if Mitchells has ever done a study of acquistion costs and profit margins of insurance premiums.

potato*

May 3rd, 2008 - 8:11 AM

Re: NIX NAGS

For the auto glass industry, by the auto glass industry. The alternative to NAGS. A Website, Maintained ,Not for profit, by Industry PARTICIPANTS, like those around you, a broad cross-section of low-ballers, old timers ,professionals, newbies, agrss, NGA, IGA, ABC, ETC. Very simple, Start over and Keep It Simple. So.......What am I smokin'.....?

Mark1

May 3rd, 2008 - 9:30 AM

Re: Nags Patterson

My apologies Larry, I have no wish to argue either.

However, I am subscribing to the cliche "The first step to a cure is admitting that we have a problem."

I understand that there are "ways" to work within the system. Unfortunately, I believe this endorses what we see clearly as a broken, obsolete, arcane, unrealistic, and possibly baseless database to the majority of the real market. (borrowing a few others words, there)

To the solution, in that we all seem to accept Nags Numbering and application data, then I would submit that unless the monopoly that seems to exist ends and we are proivded something other than a simple cost-plus system, which every other business operates on but we seem determined not to use, then we have only to force Nags to listen to its customers. (No, not the insurers, their OTHER customers, repairers)

To Know it: I'm all ears to a potential solution/alternative. In the meantime, I will encourage others to see the flaws and the long term ramifications of the current model, and hope that others will speak up, and that Nags will listen.

JMHO, and as always, HTH

Mark1

May 3rd, 2008 - 9:58 AM

Re: Nags Patterson

In that Allstate is in the news this AM, let's listen in to a few blurbs about claims management from the link below, and wonder if the similarities to what we see daily are coincidence, or one of the reasons why PPG may be trying to dump its autoglass biz including Lynx. Meanwhile, one can wonder how they can do these things below without "tools" such as Nags, and where Nags motives may lie. (lie as in "lay", not as in "untruth".

************************************************

http://www.informationweek.com/news/internet/webdev/showArticle.jhtml;jsessionid=V2QLR01WKIJWWQSNDLRSKHSCJUNN2JVN?articleID=199200177&cid=tab_art_busint

The Good Hands People Want Better Hands

Allstate's new claims processing system aims to cut costs while keeping customers happy.

Claims processing is the center of everything for insurance companies. Done well, it cuts costs and keeps customers happy. Done poorly, it bloats the business and provides grist to those who claim insurance companies rip off their customers.

Allstate, the country's second largest provider of personal insurance, is halfway through a $125 million claims-processing system overhaul designed to strengthen its "you're in good hands" motto, shorten claims-processing time, and produce more consistent payouts. The company even hopes that it will be able to settle uncomplicated claims, like fender benders, with one phone call.

One of Allstate's goals with the new system is to bolster its reputation as a company that consistently pays out the "right" amount to every claimant. In the tug-of-war between insurance companies and their customers, the right amount often depends on who's doing the tallying.

Next Gen also lets Allstate more easily analyze claims to ensure consistency among similar cases. That may result in lower payouts for some customers, Newsome says, but it's balanced out by faster service. "People seem to be happier with less money right away, than more money after a lot of hassle," he says.

lawrence

May 3rd, 2008 - 5:09 PM

Re: Nags Patterson

the larch

lawrence

May 4th, 2008 - 3:31 PM

Re: Nags Patterson

Larch
The Larch Project develops aids for formal specifications. Each Larch specification has two components: an interface containing predicates written in the LIL (Larch Interface Language) designed for the target language and a 'trait' containing assertions about the predicates written in LSL, the Larch Shared Language common to all.
["The Larch Family of Specification Languages", J. Guttag et al, IEEE Trans Soft Eng 2(5):24-365 (Sep 1985)].

J Armstead

May 5th, 2008 - 2:24 PM

Re: Nags Patterson

Mark1... I wish I could explain it to more people than just Larry... but Larry is the consummate politician of this industry.

Larry will only say nice things about everybody... regardless of the grave danger of ignoring the obvious. Larry reminds me of the reason that nothing will ever change in the US Senate or Congress; he's too busy patting everyone's back (like they do at the Collision CIC meetings) to defend and protect his business.

He's not a leader of his industry (in the sense that this industry is in need of a "renaissance" leader), he's an entrepreneur whose perception of loss is so great that he's afraid to do anything other than patronize the networks, insurance companies, info. providers, associations, suppliers, etc...

While he is undoubtedly a likeable fellow, he does not feel he needs to be educated... unless it fits into his business model. What is needed by this industry (and the collision industry) is new leadership in the vein of what the SCRS is now finally addressing.

See the new thread that I am starting on the “Position Paper” that the SCRS has published in the latest edition of Hammer and Dolly. Hammer and Dolly, whose previous editor of 20 plus years Sheila Loftus, was shoved out of the way for creating too many waves with the “Larry’s” of her local political base; the Washington Metropolitan Auto Body Association. The link to that is:

http://www.beyondparts.com/sloftus082106.htm

The title to the new thread is:

“SCRS: What the Glass Industry Already Knows Too Well”

Tothepoint

May 5th, 2008 - 5:12 PM

Re: Nags Patterson

Here's a bit more. Readers digest June 08 pg.#47 "OUTRAGEOUS, YOUR TAXES AT PLAY". "Lobbyists spend more than 1 BILLION a year cajoling state governments to pass this bill or that". It is a great read. maybe some smarter than me can get the link to it. Also Michael Crowly, the author or writer at rd, is looking for,,, OUTRAGEOUS. HIS E-MAIL IS rd.com/crowley. And J.A. I'll e-mail you!

ccc

May 5th, 2008 - 5:59 PM

Re: Nags Patterson

You all may find it interesting that a question was asked "why doesn't NAGS just stop publishing the PRICE list, but continue with the other parts (labor times, service codes, etc.)of their data?"

There was no real answer to follow. It was asked by Mr. Oliver "would you be happy if you were getting FULL NAGS LIST?" I must say that was a good point. It was also pointed out that the AGR industry is the one that allows NAGS discounts to continue, not NAGS.

It was also asked of NAGS why they do not simply publish each manufacturers LIST price, an MSRP you could say, much like the moulding suppliers have, that is why we now see many different moulding prices listed in NAGS. Mr. Oliver did mention that the Glass Manufacturers would have to release this data to NAGS, like moulding suppliers do.

So the question might be, would it be in the glass manufacturers best interest to release their LIST (MSRP) prices to NAGS, and would be in our best interest?

j

May 6th, 2008 - 1:18 PM

Re: Nags Patterson

If there is a built in profit margin whose's is it.

J Armstead

May 6th, 2008 - 1:23 PM

Re: Nags Patterson

Great thread... This is another example of what ails this industry.

Howie…. Re: Price Fixing

It is price fixing. It is illegal. It is gaining momentum. It's going to take a miracle, a tragedy, a great mind or movement to make some kind of correction. The computer is always watching, storing, calculating, and with the input from TPA's, Ins Cos., Nags, Wall St. etc., ... scheming.

I don’t believe nags was evil at the outset, on the contrary, it was necessary and useful. Big business figured out if you want to beat them, buy them, for everyone else it’s if you can’t beat them join them and take a beating.

There are no checks and balances now. These "ENTITIES" will find a way to concentrate their power and wring every dime and dollop of good will from all of us, one way or the other. Yes you can emulate their scheme and achieve some success or perhaps rise above the masses and gain some ground.

Those are the "choices" we have today.

So good luck, hard work will still pay to some degree but know the bar will be raised for those who have a vested interest in their future and the future of those around them.

PAG…. Re: Price Fixing

I agree Howie but I also think if we band together their party would be over!

AHAG…. Re: Price Fixing
It don't matter what you do, the government will not help because the insurance companies own them. AGRSS will not help because State Farm owns them. NGA will not help because to many corporate giants own them.

The only ones that could come close to help are keeping the true independent from joining because they don’t have a store front location and all the member fees are to dam* high for some independents to pay now because of fuel and insurance and food prices going up.

support the ones that truly care about our industry (independents) screw the TPA's, Insurance and any one that supports them or the people the insurance industry is supporting and watch the changes take place.

Without the independents on the networks Belsafe and the other big boys would have a hard time handling the work load. This would then cause our industry and local markets to change.

* * * * * * * * * * * * * * * * * * * * * * * * * *

Howie, PAG, and AHAG…. Great points of discussion and all of your comments are TRUE and right to the point and the heart of the matter. Howie, you appear to be especially psychic... "It's going to take a miracle, a tragedy, a great mind or movement to make some kind of correction. The computer is always watching, storing, calculating, and with the input..." You should probably go out and buy a lottery ticket.

Thanks for all the interest that's been shown from my thread on the SCRS position paper. I appreciate the 36 e-mails within 4 hours and the high level of interest and the un-censored telephone discussions with those that have demonstrated the ability to think out of the box.

If you want to discuss real solutions to change our industry, I have developed a 3 Part Plan that will work. I will not ask for your money, only your participation and commitment. I have years of experience that have prepared me to successfully address and correct these abuses.

You must be willing to accept the fact that the changes we seek will take time to effectuate and that others may benefit from your sacrifice and commitment. I will only divulge information to shop owners and you must leave your name and phone number in an e-mail at the address below.

I will personally reply to each and every inquiry.

Enough is enough; it's time to "MAKE CHANGES."

For confidential offline discussion, contact me at:

j_armstead_glass@yahoo.com

liljohn

May 8th, 2008 - 8:46 AM

Re: Nags Patterson

To answer Mr. Olivers question we, the glass industry, would like to charge nags list on nags part numbers. The nags list need to be correct not just a shot in the dark. Pricing must be correct and used by everyone, shops, wholesalers, body shops, tpa's, insurance companys. Nags it is your responsibility to fix your problem, that is your pricing so everyone can use it.
I don't know maybe I am just a genius but, it seems simple to me. First work with the wholesalers to get there priceing, why, because they sell to EVERY GLASS SHOP IN THE WORLD. Forget about the little manufacturer who makes a junk part that very few wholesalers or glass shop will use. Quit pricing parts that most companys will not use, parts that must have attachments but some companys manufacturer without, we cannot use these parts, why, because they must have attachments. Quality companys will not hack off the old attachments and glue them onto the new glass when a gty or ypy part is the correct way to replace the glass. Nags, don't complicate your job, the main manufacturers prices do not change that much, work with them to make your job easier. Each wholesaler knows EXACTLY how much to charge my company, so it can't be that complicated.
Everyone understands that the small companys cannot buy at the same price as a large companys, but that is just the tier pricing of business.
The labor rates are not correct either. Labor rates start with the ring of the phone. It needs to include csr time to take infomation and deal with tpa's, part ordering time, part stocking or pulling time, drive time, installing time, clean up broken glass time, and accounting time. There is not a job out there that can be done in less that 2.5 hours, especially tempered parts!
Nags can fix the problem, the question is will they. If our companys have a problem we fix the problem or go out of business. Nags you are putting yourself out of business by not fixing the problem. Wholesalers don't use you, glass companys don't use you, I don't use you. It is your job to fix the problem, so fix it!

potato*

May 8th, 2008 - 10:27 AM

Re: Nags Patterson

Touche'

Opus

May 8th, 2008 - 11:01 AM

Re: Nags Patterson

I have a question:

How can we put the genie back in the bottle??

It's been running free for over a decade, how can one return it? and do it legally without breaking the anti-trust laws??

NAGS has been "re-balanced" twice and net price parts lists continue to grow. We have a mixed lot of either glass manufacturers (PPG and Pilk) and independents like Mygrant who distribute. How are you going to get them to assimilate lists again and agree on a single retail list price for every part??

To me NAGS has been a figment of their own imagination as distributors went to sell off their own lists ignoring NAGS simply because the posted NAGS price did not reflect a consistent wholesale profit for them.
Just having a single price list that I know I can buy off from whaterver price tier assigned me would be nice. Ahhh the good old days.

I do think NAGS is both arrogant and tipped well on the side of insurers. Little that they say (because they do very little) changes those personal opinions.