Mutual & Federal will meet the National Guild of Independent Auto-Body Repairers to determine its concerns, the insurer’s CEO, Keith Kennedy, said on Friday.
This follows a panel beaters’ march to the short-term insurance company’s headquarters in Johannesburg on Thursday.
Panel beaters took to the streets accusing Mutual & Federal of using its dominant bargaining power to apply a ”divide and rule” strategy by negotiating with individual panel beaters to impose punishing contractual terms, which will compromise panel beaters’ ability to provide a proper service.
Chairperson of the guild Thaba Mufamadi said the strategy aims to close panel beaters down, as Mutual & Federal wants to outsource some of their core functions and only pay them for labour.
He said panel beaters would lose 22% of their income if the plan went ahead, and some of the functions in their workshops would be redundant.
He explained that panel beaters buy parts directly from the manufacturer, and if there is a third party, parts supplied to panel beaters might not be of a good quality.
Kennedy said the guild had not requested a meeting prior to the march. ”We will meet them to establish their concern, but we are not going there to talk about price fixing.”
He said the guild’s memorandum was not detailed enough to clarify its unhappiness. ”If they want to fix the price in the industry, we are not going to meet them over the issue.”
He said the insurer decided to assume the control over its parts supply, to ensure its policy holders get genuine parts, and only pay panel beaters for their labour, saying some of the panel beaters use parts from ”chop-shops”.
Though he could not give a specific case of a panel beater using illegally acquired parts, he said there is a strong possibility that parts from chop-shops might be from stolen cars.
Kennedy said the boycott did not have a major impact on the insurer. ”There are other panel beaters who are willing to repair our cars,” he said. ”If they impound our cars we have a court order to get them [cars] out.”
Members of the guild have vowed not to repair cars belonging to the insurer’s policy holders until the problem is resolved. They have not been repairing Mutual & Federal’s cars for six weeks. — Sapa