Time for a Change
Every dealership understands that the technician shortage has brought into question, how we do business. Several states across the country have new laws that state the manufacturer must pay retail pricing on parts and labor for warranty claims. I strongly believe this is a good beginning however, there’s one additional item that we need to consider. The way the manufacturers compensate dealerships and technicians on warranty times is well below standards.
It isn’t the technician’s fault that a broken vehicle happens to be under warranty. It isn’t the dealership’s fault that a vehicle broke under warranty. Why then do both of these parties suffer financially from that experience?
A typical technician might have in excess of $50,000 investments in hand tools. The dealership needs to invest $50,000 in training to get a technician to master status. The manufacturer covers none of that, yet believes it reasonable to pay very low times to complete repairs under warranty. Today’s vehicles are very complicated and require time to diagnose properly. Imagine attempting to find an intermittent electrical concern, checking connectors under warranty with the knowledge that you’re not likely going to get compensated by the manufacturer for your time. The technician is more likely to turn the vehicle back over to the customer saying they could not duplicate the concern. Who does this help?
It’s time the manufacturers implement a better way to compensate dealerships and technicians to repair their vehicles. I suggest a more reasonable approach would be to take the average field repair times of each labor operation and use that as a baseline. When a technician is required to spend more time on a job it should be verified however should never go unpaid to the dealership for the technician.
I challenge the manufacturers to rethink calculating warranty times based on the way they have done it for the last hundred years. I also find it interesting that many times when a vehicle has a safety recall issued, the warranty time is reduced, as well as the parts pricing. If the manufacturers are willing to considered reasonable time to repair vehicles under warranty, this concept should be an added to the retail pricing laws that are being enacted across the country.
More technicians would be available if they were compensated for all of their efforts.
Rob Gehring, President
Fixed Performance Inc.
Rob is President and Founder of Fixed Performance Inc. which he began over 15 years ago. His passion for customer care and helping others has assisted hundreds of dealerships with their fixed operations performance. His common sense coaching and training lifts people up as individuals and team members. With over 30 years of dealership management experience, he understands and respects the daily challenges of fixed operations. Placing a strong value in people and best practice processes always provide growth. His articles have been published regularly in national publications and weekly newsletters are read by thousands.