Originally posted by rpm
I have a close friend that is a mechanic for a large GM dealer and he tells me different. Maybe I have bad intel.
Technicians always whine this tune. You have to understand both sides of the issue to understand.
Manufacturers invest a ton of money in time studies to determine just how long it takes to do repairs, then publish a time standard manual (commonly called "flat rate book"). They pay the dealer at the dealer's cash customer hourly rate. If you're in Podunk Mississippi and charge the locals $50 an hour, Ford etc pays you $50 by their time standard. If you're in NYC and charge $125, that's what you get from GM etc.
Now, the usual way dealers compensate technicians is a straight percentage of the labor they generate. Hence the rub here. There are a couple of factors involved.
1) Knowing how to use the pencil. There are usually combinations of individual labor operations in the time standard that may be applied to any particular job. It may only pay 3 tenths of an hour to replace a part, and the people writing the warranty ticket up need to know where to look up an applicable time for diagnosis, associated "add-on" times (for associated adjustments and post-repair testing regimes etc) that may be applied because of the vehicle having optional equipment, etc.
There's also a certain amount of fudging that may be done with creative use of unrelated labor-only additions to the ticket to help a technician recoup time over and above what any particular repair pays if that job's "factory time" is unfairly tight. I know because I've written thousands of hours of warranty tickets and had all of them approved by the factory reps (yeap, never lost a tenth of an hour, its all in knowing how) and I always kept my wrenches happy with their compensation. It can be done.
2) Aftermarket time standards and just plain outrageous clock-estimation. Since nobody looks out for the consumer like the vehicle manufacturers look out for themselves, there is a tendency in the repair industry, both at dealers and indies, to abuse customers in terms of what hours are written on tickets versus what hours are actually expended by the technicians to do the jobs.
Companies like Chilton, Motor, Mitchell, etc publish their own time standards, which they sell at a very lucrative profit to the industry. You buy one of these and use it to show customers why you're charging 3.7 hours to replace that Chevy water pump ("See, says so right here, that's how long it takes!"). No matter that anybody with air tools and experience that hustles can do it in 2.5 hours flat. Presto, what is sold to the customer as "$50 an hour" is really $75 in actuality. Guess what time standard book some dealers whip out when its a cash customer?
Also, with cash customers, its easy for a shop to just say "It took this long" and charge that, even if the "that long" was because the technician screwed around, took coffee breaks every ten minutes, blew the diagnosis and wasted time doing un-needed stuff, etc. Its harder to get away with that on warranty jobs because ~gasp~ the manufacturers spend millions on warranty and ain't stupid, so they actually AUDIT! Imagine that!
The fact is, when pay is variable and not clock-related, as in this case (technicians get a straight percentage of what's charged) every paycheck becomes a negotiation. Technicians are people, so they naturally prefer charging as much as possible on every ticket. Since dealers have to watch what they do closer on warranty tickets in order to not raise red flags and create intensive audits/chargebacks, warranty tickets tend to be very exact representations of actual time. Cash customers don't know whats up like manufacturers, so the tendency is for the commission folks to pencil whip them. But the fact is that there's no reason to get paid less hours for warranty work than it actually takes.
My
productive technicians at the dealers where I was service manager made more than I did in a year, in some cases time and a half. The lazy coffee-room slackers got barely better than minimum wage. There was a big crowd in between those extremes. The only difference between any of 'em was how productive they were.
And, no I wasn't a white collar manager type - I paid my dues working the line (on everything, cars, HD trucks, industrial equipment) and am an ASE certified Master technician. In addition to being a manager, I pulled wrenches myself for many years. I apply the same standard to my own performance as I do other techs and I always was a top performer vs the flat rate. Its all about professionalism and hustle.
culero
PS - there are differences between manufacturers in terms of turn-around on warranty claims approval, but it makes no difference. The technician gets paid immediately, and its all "on paper" for the dealer. The dealer owes for what cars and repair parts they've ordered, credit is applied to the dealer's account for the warranty repairs, there's delays both ways. That old saw is BS too. Warranty work is a lucrative element in a dealer's cashflow, all the dealer has to do is administrate it properly. Any dealer that doesn't solicit warranty work is mismanaged, period.
