oil change employee - parts or service?

[ladihawke]

Does any other parts departments have to pay for half of the oil tech's wages? If so, do you get a say in who is hired?

[MBailey]

I don't see any logic at all in having the Parts Dept. be responsible for any portion of technicians pay, unless your Parts and Service Depts. are totally combined, i.e. all Gross Profit thrown into one pot and all expenses being paid out of same. I doubt that you are on such an arrangement, but that would be the only reason to be subsidizing tech pay. Perhaps the Dealer's reasoning is that if the lube tech is paid partially out of Parts he will get better service at the back counter(?). There are much better ways to achieve that that making him a partial employee of the Parts Dept. Besides, who will he really report too? Who will hire/fire these employees? Sounds like a mess to me!

[Chuck Hartle]

Hi Ladihawke,

Rather than speculate about this, what is the reasoning behind this issue in your dealership? Why is a portion of the lube tech's pay coming from parts?

Chuck Hartle'

[ladihawke]

Well, I just took over about 2 years ago and still have not gotten a straight answer as to why I must pay for an oil tech. My main problem now is that the service manager hired a person that I had turned down for hire in my dept. and feel as if I should have had some say in whether he was hired as a lube guy or not. Also, the service dept. is talking about adding another lube man and are expecting me to pay for half of that one when I am fighting for pay for my own employees and trying to hire for my own dept. at the same time. This makes it very hard to manage my expenses.

[Chuck Hartle]

Well, now that you have partially explained your position I must say this might be a first! I have never heard of anyone who charges the parts department for a lube person's salary.

My own opinion is that this is nothing more than cost shifting service department expenses and salary at the parts department's
expense. Wow!

I really don't have an answer for you except that it makes absolutely no sense to do this. One question. Does the dealer agree with this and why?

Chuck Hartle'

[d cleveland]

hey chuck, thats a new one on me too. As a side bar, my department has to pay half of the warranty clerks salary. The office mgr/dealers wife/partner says parts would not get paid for parts on warranty tickets w/out him so I should share the burden of his salary. Not bad if he took care of returns to wpc nad scrapped parts, but that falls on my counterman. D cleveland

[Chuck Hartle]

Another first! Wowzee Wowzee! Now we have a warranty clerk charged to parts??? Is there anyone out there who can pour it on even more????

Let's see, now we are looking for the GM dealer that goes through the GM Gross Profit Transfer, pays half the lube technicians pay, and half the warranty clerk's pay. Any takers?

Seriously, this could be an endless "black hole" of expense structuring. I brought this up in an article a year or so ago. When does the service department begin to pay half of the service counter parts advisor's pay and send back their own warranty parts. As for the warranty clerk, if you didn't sell any parts they wouldn't have a job to book the repair!

If it looks like a duck, and it walks like a duck, and it quacks like a duck, chances are it is a DUCK! All of these "cost-shifting" measures between service and parts (and visa-versa) are nothing more than shifting money from the left pocket to the right pocket.

PAY PLANS FOR SERVICE AND PARTS MANAGERS NEED TO BE OFF THE NET OF BOTH DEPARTMENTS!

It is going to be the only way to promote any type of harmony and begin to get the fixed operations thinking as a team instead of individual profit centers!

Thanks Cleveland, you made my day. Keep the faith and work toward that goal!

Chuck Hartle'

[warr_wiz]

No chance on me taking part in this one. It makes absolutely no sense whatsoever to me why parts should be paying any part of a lube tech's pay. If that was the case, why not have parts pay part of my A-Tech's pay? Sounds good to me but I am the one to benefit from that arrangement. And how about paying for part of the advisors pay? And what about me? I could use a raise. Parts..what do you say..another 10K/year for me?

[roytunno]

Warranty Wiz brings up a good point...Service advisors are the best retail saleman a dealership has. For a long time I have thought of placing a portion of the advisors pay into the parts dept. If you think about it, more profit is generated because the cost is really lower on the parts that are sold by an advisor vs a counterman. It makes sense to charge the correct departments accordingly. I think charging a lube tech to the parts department is like charging a outside parts saleman to the business office, but I have seen some very creative accounting over the years. What do you guys think about the service advisors?

[Gary J. Naples]

I've helped and worked with a lot of different businesses and seen a lot of wierd and quirky stuff when it comes to management.

Remember, the owner can do anything he, she or they please as long as it conforms to the franchise agreement, GAAP (Generally Accepted Accounting Principles), and IRS (Internal Revenue Service) rules. Decisions of this nature don't have to conform to industry practice they simply have to make sense (for whatever reason) to the owner or owners and meet their business operational needs.

Unfortunately, where your parts department is concerned it distorts performance and creates conflict.

Is the decision to expense a portion of service personnel pay to the parts department dealer principal mandated or is it a GM decision? If the dealer principal was not involved in this decision it may give you an edge. The best you can do is present the facts and hope for the best.

I, as you, do not agree with the logic of this type pay arrangement. If you can't change it, you have to deal with it as best you can and make the most of an unfortunate situation.

Gary J. Naples
GNA