WARRANTY LABOR RATE INCREASE

[DER]

HAS ANYONE BEEN IN THIS SITUATION. I AM IN A LARGE METRO AREA WITH 4 OTHER CHEVROLET DEALERS WITHIN 20 MILES OF ME. WE ALL HAVE THE SAME AVM. I FOUND I HAVE THE LOWEST WARRANTY LABOR RATE OF THE FIVE DEALERS, YET THE HIGHEST CSI RATING, ALWAYS 100% TRAINING AND ONE OF THE LOWEST IN OUR AWARE REPORTS. MY AVM DOESN'T WANT TO INCREASE US TO THE EQUAL RATES IN THE AREA. WHAT NEXT? GO OVER HIS HEAD? THEN DO I RISK RETALIATION? IF ANYONE HAS IDEAS I WOULD SURE LIKE TO KNOW!

[Richard]

Find the process in the P&P manual: I think you have to pull 100 customer pay RO's and then do a local survey to find out what others are charging for CP, and what they get for warranty. It's a drawn-out process but well worth it in the end!!

[69mach1]

Thats because your AVM pay reflects your warranty rate the more you charge the less he/she makes

[GMFXDOPSMGR]

The section in P & P is 1.5. All the forms have to be filled out, the survey for your competition will have to include independent shops, ie, Midas, Pep Boys, Billy's Auto Repair, etc. Include your dealers both domestic and foreign. Get their customer and warranty rates. There is a form that GM wants filled out for this. Then you have to pull at least 100 ro's to get the work mix you are doing in your shop. This is easily done thru your DMS. I made reports to seperate our discounted, maintenance and repair work, click and had a list. E-mail if I can help. Just submitted mine. GM is not hard for 5-6% increase. More than that, good luck.

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Tom Edwards

[robc]

Doing the process is good, but since the AVM is the one to do the approval it can be an uphill batttle. How far off are you from your local peers?

== Rob ==

[jharkey]

Hi,

I am in the same type of place, except that we are still signed up on option c (I think that is what it is called) which allows for yearly cost of living type % raise in warranty rate. Was a good thing when I signed up but now am getting behind the curve again.

That hundred ro count is suppose to be in numerical order. Meaning your work mix includes maintance items and must have an ELR (effective labor rate) = or above what you are trying to get from GM.

just my 2 cents

jeff h

[This message has been edited by jharkey (edited 11-28-2006).]

[chrabo]

As a former DM for Chrysler, I can tell you that there was no merit pay increases based on warranty dollars saved. I will also tell you that the DM had nothing to do with deciding weather a dealer received a warranty labor rate increase or not. Chrysler switched over to auto increases years ago but the WPPM states that if a dealers labor rate is not in line, that a review would be in order. It is important to note that they grab 100 consecutive RO's to determine effective labor rate. There is usually a large variance between "door rate" and effective rate. You may as well calculate that yourself and see where you are at. If your door is $95 but your effective is $70 either your pricing structure is wrong, you do alot of oil changes, etc... and they'd never give you a warranty rate of greater than $70. 'nuff said.

[Gene]

I have recently got a $9.60 labor rate increase after DCX allowed dealers to back out tire rotations as well as state inspections and oil changes. Although we cannot count on warranty for a living it does force you to manage your effective rate. If your ELR is to low you may want to look at what you are paying you technicians per flat rate job. Get your ELR up and you are sure to get a rate increase.