Court Ruling May Smash Aftermarket
Carstation.com Buys First Parts, Inc.
Federal Mogul to Sell Businesses

COURT RULING MAY SMASH AFTERMARKET

State Farm, one of the largest auto insurance companies in the country, has suspended use of automotive aftermarket replacement parts after losing a major lawsuit.

A $456 million judgement against State Farm was handed down on Oct. 7, claiming that the company was guilty of a breach of contract because they used aftermarket parts for crash repairs.

The class action lawsuit claimed that by not installing OEM replacement parts, State Farm did not restore its customers’ vehicles to their original pre-accident condition.

State Farm Chairman Edward Rust says following the judgement that the company’s "best course, for now, is to begin specifying only crash parts made by auto manufacturers." The company says it will use only original equipment or recycled parts for crash repairs.

"Not having lower-cost, high quality alternative parts available will be very bad for insurance consumers," Rust added.

CARSTATION.COM BUYS FIRST PARTS, INC.

Carstation.com, the San Francisco-based e-commerce company that services the automotive collision repair industry, has signed an agreement to acquire First Parts, Inc.

First Parts, Inc. provides outsourced sales and marketing services to OEM parts dealers. The new combination will offer Internet-based parts sales between thousands of OEM dealers and repair facilities.

Carstation officials say that the acquisition of First Parts supports the company’s "continued commitment to implement business solutions that make the collision repair industry more efficient and cost-effective."

FEDERAL MOGUL TO SELL BUSINESSES

Federal-Mogul Corporation has announced that it plans to sell its lighting, wiper blade and fuel businesses.

With sales of approximately $700 million, these operations manufacture and distribute the Wagner, Blazer, Zanxx and Signal-Stat lighting products, Anco wiper blades and Carter fuel system components.

"These businesses are known for their quality people, products and services but we are strengthening Federal-Mogul"s continued focus on our powertrain, sealing and brake system offerings," said Dick Snell, Federal Mogul chairman and CEO. "The potential sale of these businesses with their well-established reputation and brands represents a tremendous opportunity for the right buyer."

The sale will affect approximately 5,400 people employed at 14 manufacturing facilities for the brands Federal-Mogul is looking to divest.

Originally published in the December 1999/January 2000 issue of Automotive Booster Magazine.
Copyright 1999 by KAL Publications Inc.