June 2001 Editor's Page
A New World?

With the recent announcement of Allstate's purchase of Sterling, is our industry about to embark upon a brave new world?

Our initial reaction to the insurance giant's purchase of the 39-store auto body repair specialist is that there is potential for much upside - both for the parties involved as well as for a number of peripheral parties.

Technicians, consumers, independent shops and a host of other factions on the sidelines of this deal may well see much up-side to the marriage. Much of this up-side is contingent upon Allstate and Sterling making a smooth transition, and then carrying the momentum of that transition into a new world of improved efficiency, service, and workplace conditions. The potential is huge.

Moreover, Allstate no doubt sees a large upside for itself. Our take is that this is just the first step in a planned expansion, as Allstate looks to increase the volume of work that it can now perform "in house," for lack of a better word.

Nevertheless, as is the case with all consolidation, there is also potential for increased inefficiencies and bureaucratic nightmares. Only Allstate and the other involved parties, therefore, will be able to determine if the new world into which our industry is venturing will be a "brave"one, or just more of the same. Will Allstate ultimately "Rob Peter to Pay Paul," so to speak?

Speaking of new worlds, check out this month's Under the Microscope, in which we flesh out the idea of dealerships and automakers putting a renewed focus on collision repair. In light of the Allstate deal, this piece discusses a number of issues that are sure to come to the forefront of our industry in the not too distant future.