Part Piracy

July 6, 2008 by
Filed under: Collision Repair Industry 

For years I have have wondered why auto manufacturers have allowed their designs to be copied and sold, depriving them of deserved income. Come to find out, most have not been patenting their designs. Lately, though, some manufacturers are challenging the unclear rules against making auto parts off limits to the band of pirates who simply copy other’s hard work. More and more they are applying for design patents on their body parts. And, boy, does this approach have the lazy pirates squealing.

It cost car makers billions of dollars to design and begin manufacturing a new model. Hundreds of talented people–artists, engineers, tool makers, computer programmers, etc–will sometime spend years working on one production model, and possibly, many concept models, before a new car ends up in your local show room. Every one of the thousands of parts used in that vehicle must be separately conceived, designed, engineered and manufactured before the vehicle can be built. When you spend some time to really think about everything that goes into bringing a new vehicle design to market the task seems overwhelming.

So billions of dollars and millions of man hours have been invested in producing a product by an auto manufacturer, when along comes some little pirate who simply purchases some parts, makes cheap copies and sells them for sometimes half of what the original manufacturer sells them for. Does that seem fair to you? Why is OK to steal an idea and design from automobile makers and not from, say, an author? Try printing and selling copies of another author’s book and see what happens. It can’t be done. Why then do some people think it is alright to simply make copies of car parts and sell them?

Insurance companies and aftermarket parts associations will tell you that consumers benefit by counterfeit parts because it forces competition with the OEM’s. If not for aftermarket parts, they say, repair costs and insurance rates would be much higher. Well so what? Why should repair costs and insurance rates be held down when book prices aren’t. Don’t readers have the same right to lower book prices?

When analyzed, arguments for aftermarket parts are plain asinine. Insurers have been using the fear of higher insurance premiums for decades to convince legislators that artificially controlling labor rates and repair costs, and allowing the piracy of crash parts is essential. But where is the argument for controlling the price of milk, bread, gasoline, electricity, heating oil, education cost and big screen televisions? Why are insurers so damned concerned with keeping insurance rates low? If insurers are so concerned with consumers’ financial well being, why don’t they lobby congress to help control the price of milk?

Auto manufacturers are finally getting fed up enough to fight for the right to profit from their hard work and investments. Like the collision repair industry, insurers have interfered with the natural marketplace of automobile parts, keeping costs artificially low for the sake of “consumers.” Your elected representatives suck this up knowing that the appearance of supporting higher prices for anything will get them thrown out at the next election. This is the effect of mob rule–of democracy. We are supposed to be a country governed by the rule of law. We are supposed to be a Republic. The term “Democracy” has been misused by certain people in this country since its birth. Our Republic was supposed to protect everyone equally through the rule of law, but over time we have allowed our Republic to deteriorate into a democracy. Democracies always favor the masses. In this case, the evil, rich corporations that bring us all the trappings of our indulgent lifestyles are those entities not being protected by the rule of law. The citizens’ pocketbooks are more important than the rights of the corporations.

Auto manufacturers have the right to patent their designs and hard work, just like every other company or person. The courts are helping the music industry to stop people from copying music and selling it. They’re putting people in jail for this. There are government task forces solely for stopping the importation of counterfeit clothing and electronics. Don’t Americans deserve cheaper Polo shirts and cheaper Ipods? Isn’t that an important consumer issue? Where is the insurance lobby on this issue? Are they hypocrites?

Insurance influence in our industry has led to the proliferation of counterfeit parts. But it has also led to the proliferation of body shops that should not exist. There are thousands of body shops in operation that wouldn’t be today if it weren’t for the interference of the insurance industry. Those of you who are feeding off the insurance nipple to survive are not contributing to the natural selection process of capitalism. You are not part of consumer choice or competition. You are part of the runaway power of political ambition that keeps insurers in power solely because of the insurers’ ability to fund political partnerships. Without the political power you have helped insurers achieve, counterfeit parts would not be an issue. The law would protect auto manufactures as much as authors. You would not be forced to install inferior parts on your customer’s vehicles.

Here’s an idea, the next time your monthly bill arrives for your estimating software, call your insurance partners and ask them if they can help you find some counterfeit software for less money. Tell them it will help you keep your labor rate down. See if they can recommend a supplier.

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5 Comments on Part Piracy

  1. Larry Lawrence on Sun, 6th Jul 2008 10:07 pm
  2. The last time a car was pulled from my shop and sent to a direct repair, I called my state representive who called the atty. gen (ins. com.) and they said: It helps keep ins. costs down for the consumer. Some how I can’t see where keeping me out of the competitive loop is good for the consumer. May be good for the ins. co. but not for the consumer! If they need help controlling costs, I’d be glad to go in a day a week for awhile and give them some advise. I’m pretty sure I could help them out!

  3. Roger Walling on Mon, 7th Jul 2008 7:00 am
  4. As with any well run company, automakers have a plan. It may be to keep the cost of the finish product down, so that they can sell many cars and then make their profit on the sale of parts.
    Would it make the consummer any better off to sell their cars at a higher cost and then sell the parts at cost?

  5. Jeremy on Wed, 9th Jul 2008 5:43 pm
  6. If car manufacturers really wanted to, they could lower thier prices to remain competitive but choose not to. They could patent thier designs but dont. The automobile industry is a dinosaur and slow to change. This is not the 1950’s anymore. Shop’s need to be more open to the use of A/M parts and in North Texas this is the case. Besides, they created thier own monster by using a/m parts first and taking the money from the ins companies for OEM parts.

    The A/M industry has come along way and the shop’s that are successful have embraced the change. I do hear the arguments but they are usually from Mr Joe Bob body shop owner who has not upgraded his shop since the 1950’s and thinks that since I am a white male that he can make racist comments to me in normal conversation. No wonder cars are pulled from your shop in favor of direct repair.

  7. Larry Lawrence on Wed, 9th Jul 2008 7:51 pm
  8. They can’t sell them cheaper because of the union payscale, which has always been out of line for unskilled labor, and they are slow to change because every time they do, they bump into the unions and don’t blame me because the world went flat! If the unions wanted to, they could work cheaper, and be more competitive, but choose not to.

  9. Dan Hassard on Thu, 24th Jul 2008 7:59 am
  10. It seems to me that using trademarks would be much more effective (and cheaper), than patents as it’s difficult to patent a “shape” absent some sort of engineered features in it. When I was an appraiser I was always able to avoid aftermarket headaches with shops on Mustangs and Bonnevilles simply by noting that the trademarks were stamped into the bumper covers and the aftermarket ones would leave the vehicle with a different appearance. There was no counter-argument to this.

    I’ve never understood why the manufacturers haven’t started stamping a trademark/emblem into every bumper cover they sell, particularly brands driven by the “frequent flyer” crowd. It would be fairly simple and un-obtrusive to stamp a logo on the exterior of the fenders down near the rocker panels, and even somwhere on the hood. (The stamped logos on some cars on the fender edges under the hood don’t really count since, (in the absence of a fit problem), the fender wouldn’t make any material change in the appearance of the vehicle. Visible exterior logos are a different story.

    The only explanation I can think of is that the absence of an abundant supply of aftermarket parts for a particular model does affect the insurance companies “experience” rating with the particular model and leads to higher premiums for that model which, over time, loses the vehicle manufacturer a small but measurable number of customers that purchase an equal model from another manufacturer solely because their premiums for the other car are lower due to lower repair costs. And so they tolerate it.

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