Dealer Service Lowdow

I will start another thread, since the other is getting down on the page. This is the low down on dealership service and why it is what it is. I was a GM dealer tech for 11 years and attained the level of World Class Technician, one of 1500 at the time (2005). Most dealer techs are paid flat rate, which is similar to piece work at a factory. The public is clueless about how this works, and most dealer owners now do not understand how it was intended to work, so it turns into a giant cluster. Each and every job on a vehicle has a flat rate time attached to it, expressed in hours and tenths of hours. This is the amount of time a mechanic is paid. So, if job a pays 1 hour, that is what the technician gets paid, whether it took 30 minutes, or 3 days, they get the same hour. Let's move on to the LOF situation below. The time assigned to a simple LOF has been dropping steadily for the last 15 years. At my last dealer, the basic LOF paid 3 tenths. This was the time paid for pulling the ticket, finding the car, pulling car in, racking car, perform LOF, unrack car, take car to car wash, run car through wash, repark car, and return ticket to counter. At my rate at the time, this work paid the princely sum of $7.20 and took way more than 3 tenths to perform properly. I was the highest paid at the time, so everyone else got less than that. I have a moral compass that forces me to do the job right, but how many others did the same as me? I have no clue. I held some sway due to the dealer needing my certifications for warranty reimbursement, so I refused to do the car wash, the writer would do it. Then GM decided we needed to do the 27 point check sheets on every car. Guess how much that paid? That's right, 0. Goose egg, nada. GM wanted wheels pulled and all. I argued for payment, to no avail, so I would check fluids and look through wheels at the brakes while on the lift because I refused to work for free. Dealers have now started to hire cheaper help because they are being forced by the companies to compete with Wal-Mart prices. The "free" maintenance that comes with new GM cars is even worse, GM's labor reimbursement to dealers is in the neighborhood of $5. How good of help are they going to hire to do that work?

I left the dealer world, even though I loved the cutting edge, because it was becoming impossible to make a living without cutting corners or outright lying. Dealers are losing the good techs in droves because of this fact. Flat rate was setup to standardize repair estimating and most mechanics got 50% of the door rate up until the '80s, when consultants convinced shops to disconnect the mechanics pay from the door rate. Most dealer techs are making a third or less of the door rate now. The good mechanics are leaving in disgust and being replaced with tech school "graduates" who don't know any better. This is going to make dealer service in the future even more suspect.

This goes to show me that when I bought a certified used car that not all items had been checked and that I had to take it back to get repaired the right way.

One of the reasons I quit the automotive field 18 years ago. The skills of a mechanic are in demand other industries. I went straight into the medical products manufacturing industry and the dirtiest I got was eating lunch. There is also another part of the 'flat rate' process. There are some jobs that are considerably more profitable than others. The shop foreman works for the dealer and if he can't keep labor costs down they will find someone else that can. If a mechanic makes 40 hours only half way through the week the foreman will assign jobs that lose money to even things out. The only good thing about the auto mechanic business is that it is recession proof. The worst of times were my best of times.

Please define LOF Laugh off faney?? I reread post below and never found LOF.

Just guessing that it stands for "Lube, Oil, Filter"

Yep. been that way since the dawn of time . I remember when i was wrench twisten labor rate to the customer was 7.50 and hour on the flat rate and we got half , warranty was six bucks . Then it jumped to 10 for the customer and 9 on warranty . And it was tough to make flat rate . Myself i did a little better as i only worked on performance cars and heavy trucks and that rate was higher . Then there was the fact that ya never stopped having to buy new tools . If you were really good your home phone never stopped ringing with offers to go to another dealership with all kinds of offers . Then there was the home work the schools and with me having to be at every drag race with the dealerships cars the late nights at the dealership getting ready for the next race . Then there was the waiting on parts to fix what you were working on that may not come for a week or more . That job did not get paid for till it was out the door. A poorly run parts dept will run a good man out the door if he is always waiting on parts. That is why i left . Then the next move in the auto bizz was i moved up the food chain in the car dealerships as a parts manager . Sort put me more in the drivers seat to help the guys out on the line get them in and get them out with the parts they needed when they needed them . I ran one of the best parts dept. around . The only this that i did not carry a lot of was body moldings but had the hard parts to keep even the body shop moving while i got the odd ball stuff with in three days. Now today i do not think that there are any real mechanics or tech out there . As if there scan tool does not tell them what is wrong they can't fix it , lets just swap part till we hit it .

You are not alone. I spent 30 years as an elevator field tech. In the elevator industry the maintenance and inspection times have been cut to the point middle managers admit they are asking the impossible. They demand 80 item check charts be filled out for jobs that have been visited only for a repair. What they are saying is please lie about what has been done so they can assure the customer they are meeting their contractual obligations. The older techs refuse to falsify records, but the youngsters are a lot easier to intimidate. There is no honor in American board rooms.

That was a very good description of how the "system" works. I was also in your situation. I also reached a similar level of expertise within the Ford organization of dealers. However, you only scratched the surface of the corruption that infects the "system."
First, there was an "experiment" of having different levels of technician pay based on level of experience and certification. This was coupled up with a division of work based on the required levels of experience and qualification. Enter the crooked dealer thinking to make some extra money without paying the rate for the more experienced technicians. They began giving high tech work to unqualified "trainees" to "figure out" with the trained techs standing by to "help out" if the trainees got stuck. For FREE. First time they tried that on me, I figured out the scam quickly. Next time, I clocked on the job. Service manager had a hissy fit. I informed him that I had bills to pay and a family to support, and I was not here to work for free. At the same time, the customer was not getting what they were paying for.
Then there was the time cutting. When I first started encountered the front wheel drive overdrive transmissions, the flat rate to R&R and overhaul one was nearly 17 hours. This was in the mid to late '80s. By '93, it was cut to just over 11. Same job, same operations, just less time.

I am totally in agreement with what you say here. I left the business for similar reasons to yours.

Almost forgot..... Ford started a program in the late '80s called ASSET. They offered a training program for new techs that involved interning at a dealership combined with classroom time. Completion of this course resulted in the equivalent of an Associates college degree. (I could have passed that one blindfolded and hog tied). They promised high starting wages in the vicinity of $50,000 annually to the graduates of this program. HA!! Not at today's flat rate!!!

One thing to consider, though. EACH DEALERSHIP is a SMALL BUSINESS!! Mom and Pop so to speak. As such, they do not have the power or resources of a big business behind them. While there are some that get bigger than average, and acquire several dealerships under one organizational banner, they are still small businesses. As such, most are SALES organizations. Most dealership owners are SALESMEN. To them, we technicians are a necessary part of overhead.

How are redo's paid out? If work you completed fails, and the car comes back in to be repaired again, are you working free to complete that repair?

I think many dealers do like the one I worked at. They hire minimum wage with little experience to do the oil changes. The flat rate and more experienced techs do not usually do an oil change because like you stated it does not pay enough.

I never liked the flat rate system. I always said flat rate = cut rate. Many times corners are cut to meet or beat the system.

Sometimes it goes the other way and the techs make out better if the job goes good. Like the time I remember a body tech was whining and crying about how little on this certain job they wanted to pay to remove a dent on a GM truck door. I watched him as he started the repair. Had to pull off the body side molding first. Well pulling on that molding pretty much got the dent popped back out ! LOL. He spent more time whining than it did to pull the dent !

Hi
The sad thing is it's not only car and truck dealerships that are like this, The ag and construction world shops from the big brands are getting just as bad. Mom and pop family businesses that respect customers are being shut down, and the big guys are getting more greedy due to lower sales and service. I'm guessing warranty doesn't pay bills!. Some will bill the $10 an hour wash boy out for full mechanics hour rate to. That helps the bottom line profit no end when he makes them 110, profit an hour with jd rate at $120 round here.
For anybody thats never worked in a dealership or doesn't know how they work It would be a real eye opener the lies and deception that goes on behind the scenes. I left 2 dealer shops because of it. I'm now self employed like a few more round here. My customers say they may not like a total blunt answer about the health of there machine, or the fact maintenance is cheap when $12 of oil would of saved $6000 in repairs. But they know if I tell them it's not worth fixing, or I do fix it it is done right the first time.
Regards Robert

I also was in that game for many years. I got fed up with declining pay and benefits but more workload. The 80s and 90s were good years and a guy could make a nice living. I am now on my own and love it, just passed my 10 year mark . I am booked out 2 weeks most of the time . As the dealers price goes up and service goes down, guys like me will only get busier. I find if I do quality work at a fair price , people will find me , and even be willing to wait 2 weeks for me, rather than go somewhere else unknown.

But look at the money they rake in on the "27 point checklist"!

Last place I worked, the business owner finally started letting me do the work on his Toyota SUV. I got to looking through the repair tickets in the glove box, that truck (supposedly) got a new air filter every oil change, a new serpentine belt (@ $90 labor) every other oil change, 2 new timing belts within 40,000 miles, 2 sets of brake pads in 40,000, coolant flush, transmission flush, power steering flush, new battery (just in case)... The list goes on, not counting the "recommended" items that he finally began to decline once the new wore off.

I have no pity for any dealership, avoid them at all cost!

seems like i heard the big 3 (and others) are trying to push dealer only service on cars even more. Like special proprietary software that can only be checked at the dealer.

my Chrysler 2012 200 6spd does not have a transmission dipstick. You can buy one from a tool shop (Matco/snap on) but you need to run the transmission thru some routines to check the level properly. $40 at our dealer for that.

This it seems to me, will make matters worse. More work that must go to the dealers with low wage low experience staff and not enough dealers/techs to service everything out there. Hang on to the old cars i guess.

Rechecks, as they are called, are done for free.

One thing I can add. Raised on a farm and I am a mechanic at one of the casinos. End up being an all trade if you get the drift. Working on my Expiditon and had the Whooooo sound from the air chest. First thing is change the air filter. Next thing is clean the throttle body with the correct cleaner. Last is the air idle motor is bad. These buggers cost just south of $100.oo a pop now. Bought one and put it on. Vehicle tried to stay at high idle and drivability was awful. Got another the next day and perfect. The first one kept hanging up right out of the box. These were from NAPA and Auto Zone. There are a lot of bogus parts too. With so much stuff made in Mexico and china many times it is the same part with a name change. I do mean dealer and after market being the same part. Only a different box. Both of the motors side by side there was NO difference. Same cast marks, same crimp on the body, same little number stamped up under the lip of the motor can. What have you guys seen.

They were not candy coated in my day by calling them "rechecks" or some other euphemism. They called then comebacks. Mechanic got to do the job over again for free.

It is sometimes called " Flat Rape " by the Techs, but could apply for the customer as well I guess.

My last job was with an independent shop that paid commission ONLY , no hourly or guarantee at all. There were plenty of days that I drove to work 30 miles one way and they had NO work for me all day , so 8 hours of waiting around and 30 miles back home without making a single penny....that gets old.

A little more "insight" on dealerships.........

Flat rate. This is a system by which each job is assigned a time allotment. This is the time that the factory has determined to be the AVERAGE time that the job should take on a NEW CAR. One with no rust, frozen fasteners, or other issues. This is generally the WARRANTY pay for a job. Older vehicles that start to have issues like corrosion, worn fasteners, and the like will require more time. This is reflected in aftermarket flat rate manuals. This system benefits no one but the business owner. Why? Because it removes his expense of paying you for time spent. It also allows a price to be quoted to a customer before work is started.

Flat Rate Hour: This is the rate at which the mechanic is paid - per flat rate hour of billable labor produced. So, if a mechanic tells you that he is making $30 or $40 an hour, temper that with the fact that he gets paid for book time - not actual time spent. The REAL truth happens at the end of the pay period when the checks are issued.

Dealer labor rates: A complete RIPOFF!!! There is NO justification for charging a customer over $100 per hour to service their car. Rates like this are just plain GREED in my opinion. Especially when the dealer pockets 70% or more of the labor costs collected - and the mechanics get treated like red-headed step children.

Another note: Making par on flat rate: At today's rates of pay, a decent, HONEST mechanic can expect to make 32 to 38 hours pay in any given week, Cutting corners and shoddy workmanship will raise that number significantly. It has become a real jungle in the auto repair business.

I am glad that I am out of the mainstream. I still do repairs for friends and family. I cannot stand to see folks getting robbed for relatively minor repairs.

I work for a Deere dealer and they're called a redo here. I've also heard a few guys call them comebacks as well. There's nothing sugar coated about the word redo. You get to re-do the work. There's no mistaking why you're doing it over again either. You screwed up, and now you get to do it over again. Ag side is actually pretty fair compared to the automotive side. You get paid for comebacks, but it goes into your efficiency numbers through, so when it comes raise time, redo's don't help you any. In this specific Deere dealer organization, there's no flat rate either. Warranty is flat rate in that the dealer only gets paid so many hours by Deere, but the tech gets paid what ever he/she worked. It's also not cut and dried. If you can justify the hours to Deere, the dealer will likely get paid for them. Each tech is also x percent efficient, based on what the dealer gets paid for,(whether customer or warranty paid) and how many hours the tech gets paid for. They expect at least 100% efficiency, and are ideally looking for 110-115%

...and a little more insight yet..parts this time.. Chrysler dealership I ran body shop at back in late '80,s...Managers meeting, owner made decision and announced to service manager that from now on whenever a part was installed on a car/truck it STAYED on whether it was the culprit or not. Diagnostics are still just a guide and any one fault could be three diff. parts , sometimes even ecu. You can't leave that on car and charge customer when a $ 50 sensor is all it needed. Back then diagnostics were in there infantcy and sometimes this is what needed done. Service manager brought a lot of customers with him from last job and has now been told to screw them. He flipped off owner and continued to run it the RIGHT way..was replaced by robot/puppet within year. That's what they are all run by now.

This is a tough thread for a customer tho.

We are paying over $100 an hour for shop time. Or travel time.

Then we hear the poor top level super trained highest paid mechanic had to quit because he couldn't keep soup on the table?

I get it, I understand.

But, where does that leave us?

I needed a hard control block on the combine, was $2300 for a two pound lump of iron with some holes in it. That was a few years ago before the labor rates really went up. Trip to figure out what was wrong, trip to reinstall it. Bench time to assemble it.

Where does that leave the consumer too?

We are entering a period of endless lease roll programs, no one can afford to outright own anything that can't be fixed. What kind of a repair nightmare will the new driverless cars be to keep rolling?

Combines, planters, tractors are already there.

Again, I understand the point being made, the mechanic doesn't get the $200 an hour I know that. Or the towel fee, the EPA fee, the disposal fee, the coffee fee, the - whatever other fees I forgot.

And the dealer, they get messed over by the manufaturer er, they get crazy stupid demands from the franchise and fees and costs up the ting yang that make no sense.

Its all crazy.

Paul

Couldn't agree more. I worked at two Case IH dealers over a twelve year period. We never had flat rate on anything but any unbillable time was counted aginst your performance evaluation. The hourly pay was always lower that of any other business around so you got a portion of what you billed out after you hit 90% efficentcy. First dealer was pretty fair and honest, the second(the local mega dealer) was the most unethical business I have ever seen. If the salesmen put to much into a trade and needed big $ repairs the work was done and the labor was written off which counted aginst the tech. Required training hours counted aginst the tech. The end result was that you could bust your butt and be looking at a $500 bonus at the end of the month and loose it because the salesmen traded in a tractor that had a blown engine and you drew the short straw. The result I saw was techs making up that time by cutting corners and billing customers what it would have cost to do the job correctly. I had one co worker that would perform pre season check overs at his toolbox while the tractor sat in the parking lot with out ever looking at it. Worked 3 min and billed an hour. After he did a few of those he could make up the time the sales department nailed him for. Management knew it was happening and didn't care as long as the numbers looked good at the end of the month.

I never upsold a dime off of the 27 point check lists. I kept a tally board to tick off the management, number done vs. upsells. Upsell column always had a giant red 0. Used to tick off the Service Manager something awful. They also decided we would no longer be paid to install "easy" parts, wipers, air filters, etc. Two weeks later, the Parts Manager is yelling he is selling no air filters or wiper blades. Duh! No pay, no selly.

I always made sure the used cars I did were right. But we got a few trades from east coast dealers that the only thing that made them "certified" was they had the stickers on them.

(reply to post at 17:04:12 12/02/15)

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We have two private farm machinery mechanics in this area. They both do top notch work at fair prices. Both of them have more work than they can keep up with. We have one top notch machinist in the area specializing in engine work. He also has more work than he can keep up with.

Can't comment on the quality of work from the local JD and IH dealers. I do remember when Pop sold tractors we ALWAYS lost our shirt on warranty work.

This stuff is funny, could swear you worked the same place I did. I never sold anything off those check lists either. Before all the check list stuff started and I had a hood open or one on a hoist, I'd give them a quick look over, leave a note in the car or grab them out of the lounge and show them, sold a lot of stuff, they could see it and make up there mind, screw the ck list, and I figured we were the only ones doing the free labor on the so called easy parts too, and then the service writers that didn't have nerve to charge an hour or so to replace a headlight on some of the new junk so they'd try to cut your time. Flat rate was fun in the 70s, 80s and 90s, most I got was over 70 hrs. a week once but that was way the exception to the rule. They kept cutting and cutting and in the last 5 or so years before I retired there was at least two guys fired for some cheating, one of the guys was a shock to everybody. Glad I'm done with it.

First couple certified cars I did I rejected and was soon told to check all the boxes favorably and write any complaints on a separate sheet of paper and go over it with a manager, we repaired anything warranty and any thing safety related. We used to get in a lot of cars traded from other dealers with the cert. stickers, plates and paper work that were never touched. If a guy was just a little bit fussy I don't think half the new cars would pass that cert. car ck list.

I was a tech at a Ford dealership and I can agree with everything you said 100%.
What finally got me to leave was the "safety inspection" that we had to give every car. It didn't matter if the car was 2 months old or 25 years old, they ALL had to get the friggin' safety inspection. The owner of the dealer said that "anything you find wrong, you will get to make money on repairs." WRONG. Most people would come in for the $19.95 oil change special and they wouldn't bring them back for repairs, especially if the car is an older car. Then if you DID find something wrong to fix, it might get assigned to somebody else.
I'm a big believer in giving a two-week notice, but that was one job that I walked away from on the spot. I stopped back there about a year later and there was only one tech there that I recognized and it was only because the dealer had purchased the tech's tools and he had to work there because of indentured servitude.
I wouldn't work for a dealer again ever. I wouldn't recommend any kid to go to auto technician school either.

Makes you wounder why anyone would be a mechanic don't it... If you survive the ware and tear and can fetch top pay your body is worn on and you can not meet production

No its not what it use to be but what is... I meet allot of mechanics in there mid 40's that are thinking about a career change I tell them to do it don't look back you are only in your mid 40's one time the trade will take you back if it does not work out you have lost nutti'N... I passed on a government job at 45 damm I could have my 20 in, in a few years and be suck'N on the tet...

I wanted to be a mechanic and got there no one told me I would have to be one till the day I die there is no retirement in it...

All of the comments in this thread about automotive techs pay is correct in my opinion. I had the same things happen to me at a Chrysler dealer. As far as the check sheets done for free, I simply refused to do them at the dealership and at one independent shop that I worked. By the way, I did get fired at the independent shop. The owner's wife said that I was disrespectful.

It's a curse ! lol Add being shop owner on top of that . While my sister just turned 45 , works from home ,makes close to $180,000 . Where is that time machine ?