AAA Michigan says it will lay off 146 workers

AAA will announce layoffs of 200 employees today in a six-state region that includes Michigan, primarily because more members are conducting their business through the Internet and avoiding the trip into branch offices, said an AAA Michigan official.

Some 146 of those layoffs will be in Michigan, including 75 in Southeast Michigan, said Nancy Cain, AAA Michigan public relations director.

The layoffs will be effective over the next month.

“More people are using the 1-800 number and going online to purchase auto insurance, make claims and contact us for travel information,” Cain said. “We are seeing less traffic coming through our branches.”

Over the past seven years, branch visits have declined 5 percent each year, Cain said.

AAA also will close 14 branch offices in Michigan, including three full-service centers and 11 insurance sales offices, Cain said.

In Southeast Michigan, two full-service centers will close in Royal Oak and Roseville, and two sales offices will close in Detroit and Warren.

Still, 35 full-service branches will be open in Michigan, including 18 in Southeast Michigan.

The layoffs and office closures will save AAA $25 million this year, Cain said. In 2008, AAA Michigan reported total revenue of $1.2 billion, down some $50 million from 2007, she said.

A four-year decline in auto insurance premiums also contributed to the downsizing, she said. AAA also sells home owner and life insurance policies.

“Since 2004 the average premium for car and home insurance has declined by $100 in Michigan,” she said. “Financially, we are strong. (The industry) is much more competitive on rates.”

Cain said while AAA has sold more auto policies, prices have gone down because of competition with other insurers.

“Revenue is down because of a lot of claims’ losses because of the weather, wind and snow storms,” Cain said. “AAA travel is also down because fewer people have money to travel.”

In addition, while still profitable, AAA has seen investment income decline because of the stock market, she said.

The six-state region of AAA, called the Auto Club Group, is composed of clubs in Michigan, Chicago, Minnesota-Iowa, Nebraska, North Dakota and Wisconsin.

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