Fixed operation stress levels increasing

[Michael White]

Talking with a number of service directors accross the country in GM stores, the department stress levels seem to be increasing significantly. Major metropolitan areas I think are being hit the worse. We are in northern California and it is getting rough here. Case in point, I put a add in the paper for experienced service advisors and recieved 42 applications. I talked to eveyone of them. The pressure for performance due to bottom line stuff is becoming emence. Chrysler/Dodge stores, especially those owned by publicly held corporations seem to have the mose unhappy advisors. In some case, they also have the best paid advisors. Too many hours, not enough help, service managers changing every other month (there is a Chevy dealer here that has gone thru 28 service managers in 24 months. do you think there is a owner problem???). I spent some time in Wisconsin this summer. I was hard pressed to find a non domestic vehicle in a shopping mall. In California, you are hard pressed to find a domestic passenger car in a shopping mall. California is almost totally foreign cars. With a significantly declining market share, and facing an even more aggressive Asian car producers that can promise and deliver high quality and customer service since they do not have to deal with all the negative warranty repairs as the domestics do, the push for more gross profit is beginning to exceed the push for customer satisfaction. The 2 go hand in hand, but when it gets down to brass tacks, gross is where it's at.
Probably next year when GM takes away the gross profit from their service departments for parts and gives it all to the parts department, this is going to stress the department and its people even more. I believe ASC has a definition of a successful service department that has good CSI and has a 10% net on the bottom line (without parts). I think you will be hard pressed to find a GM dealership in California, especially one that has changed ownerships in the last 3 years that can come even close to this. Many Honda, Toyota, Acura, Lexus service managers tell me they are at this level now. It is the opinion of some I have talked to that list the following reasons many foreign lines are at this level now and domestics are not:
1. Too many warranty failures for the domestics, which interferes with gross profit generation, and reduces the flat rate hours a good tech can produce.
2. Domestic dealers do not pay an equivelant amount of appropriate time as many of the foreign car lines do.
3. Domestic manufacturers take an active role in keeping their warranty dollars per hour unreasonably lower than the big players in the foreign car market. In our case, the foreign car lines get an average of almost $3.00 per hour warranty more than we do.
4. Domestics, not only keep their hourly rate low, but the manufacturer, especially Ford, focuses on lowering the flat rate hours it pays to make warranty repairs.
5. GM recently stressed the heck out of its dealers by shipping several extra months of allocation to their dealers during the prime months of summer business. This created an unbelievable stress on our dealership due to parking, and not being able to get to all the PDI's as fast as the sales departments wanted, which significantly interfered with our customer pay and warranty repairs. I know of a dealership that lost its flooring from their bank due to the amount of cars they recieved. (there is a lot more to this story but getting the extra cars really stressed them). GM did this for window dressing for their stock holders to report higher sales.
6. In our area, where fixed operation employees are getting scarse, lots of the highest quality techs are leaving domestics and going foreign, where they can make more money due to higher flat rate hours and more maintenance mix. There is a Mercedes dealer in our area that hired a airplane to fly all over the Auto rows in the area at quiting time displaying a banner to attract techs. This same dealer can pay their advisors upwards of $150K a year and lots of techs making well over $100K a year. This is due to Mercedes paying a huge amount of money for warranty repairs, and advisors getting 7% of the gross and writing 5 hours per RO with labor rates over $120 per hour. I have been told this one dealer has taken away over 35 techs from other dealerhsips in their area. This really hurts because the ones they took were the best of the best in those dealerships.
7. Domestic Manufactures, with the possible exception of ford, are not as aggressive in attracting new apprentices as many of the many of the foreign car techs. Case in point, Honda has done a great job at one of the high schools giving vehicles, books, training equipment, etc, and paying for programs to bring high school techs into their dealerships. At this school, GM donations for current products is almost nothing in comparison This school is a AYES school as well. GM was one of the major sponsors of this program, but does not spend the money it takes to support the student aquisitions necessary.
8. Long time GM people remember every time GM has made a major parts policy change, the dealerhsips suffer. Case in point, GM raised the parts transfer from 30% to 50% so their parts departments do not suffer from the take-a-ways they did. What will they take away from parts when they get 100% of customer pay parts gross??
9. Shop productivity is reducing due to finding qualified techs, in a radicially increasing technically challenging vehicle. And on top of this, dealerships are paying more for techs that are marginal in abilites than ever before out of shear desparation
10. lots of the publicly held ownerships in dealerships are really failing. due to the market conditons and increasing costs.
11. Changes in ownerships creates stress, and many times has radically negative consequences. Case in point, I knowof a Ford dealer that had upwards of 50 techs, sold to Ford because Ford was concerned about the public entrperises dominating their franchises. Ford, like GM has not learned to operate a retail dealership. Ford sold this dealership to another owner, who made so many changes, I hear they have 10-15 total techs, and all their advisors left them leaving just 1 advisor. this was a delar that could sell 300-400 Fords a month 2 years ago.

I guess the bottom line is increasing faster than many dealerships can produce gross. As domestic market share slides into single digit penatration in 5-10 years, what will happen.

I will close and ask for your opinion if this is going on in your area. Many of these problems are out of our control, which is altille frustrating .
Mike

[gman]

Michael,

I read your post a couple of hours ago (5:30am) as I sat here in a metro GM dealership in the southeast trying to get caught up before the day starts. My presence here at this hour can only serve to validate a lot of your opinions. We too suffer from a host of time, gross, and sanity draining factors, all of which seem to increase every year. As demands of both the bottom line and customer satisfaction escalate, we see our available experienced labor pool rapidly disappearing. The inexperience coupled with the stress of "rabid consumerism", places unbelieveable stress loads on service management. Most dealers willingness to simply keep a revolving door on the service manager's office doesn't exactly help either. Do you ever get the feeling that you and maybe one or two of your best support employees are the only ones that truly understand what you go through on a daily basis to get the job done?
I think that all dealer candidates and manufacturer field personnel should spend a minimum of 30 days as a service advisor. (In July!)

Yes, Michael, we are losing some of our best and most productive individuals to the import franchises. We are also losing techs to aftermarket shops. The reason is the same in both instances - warranty pay. We are also seeing some of our best support and management people simply finding other lines of work. Money can only go so far as a motivator to remain in this profession.

Where does it end? How do we continue to manage and improve this monster while giving all parties concerned what they desire? How far backwards will we continue to bend over to satisfy that customer who bought their vehicle from a rental lot and was sent to you from Goodyear for an engine noise, in the hope that they will buy the next car from you? I surely don't have the answers. One thing I do know is that it is not going to get any easier. Are you ready???

[flyboy]

All that's been said is pretty accurate, not much more can be added.

Therefore, I plan on doing what so many have done, and most likely will continue doing. That is, look for another means of making a living. Which is disappointing to some degree, I have spent the better part of 40 years watching the manufacturers whittle away at my profits and my desire to continue in this industry.

Ironically, I just spoke to a good friend of mine who bought a quick lube several years ago, who pokes fun of me working my tail off while my stress level escalates dramatically. I remember when he told me he was going to buy his first station, I told him he was an idiot.... ooops. He owns 7 today, and we won't even go into the dollars and more importantly, his lack of stress in ownng them. Today my factory rep told me he wishes he too had bought one years ago, and plans on purchasing his first by the end of next year.

Perhaps there is plenty of room for profit in those types of markets, lord knows we have lost alot of business to them. however, I think I am going to get completely out of the automitive business altogether.

There, take that GM!! (Sounds like a lot of whineing, eh?)

Regards!

[Michael White]

Gman and floyboy, thanks for responding. It was interesting to read your responses. When I wrote the above, I did not even think about my issues as a manager. It was more global in nature. I am currently so very fortunate to have a very understanding, and involved general manager. The tone the general manager gives, absolutely sets the tone for the hole store. He truly has made a lot of efforts to learn fixed ops and the ins and outs of it. He significantly helps me make my job servivable.
Our jobs are pretty tough. You can go from hero to zero in days. The biggest thing that has helped me during my years of being a manager is self motivation. Putting it all together and completing a good month can be a rush. God knows a service manager is under-appreciated. Flyboy, hang in there. Find the things that motivate you in this job. A good service service manager is hard to find, especially one that is committed to doing the right job, even if it takes a 60-65 hour week. You are bless if you have a knowledgable and understanding boss. I have one now for the first time in 17 years. It is a great feeling. It is predictable that our jobs are only going to get harder. But we all have to be smarter every day and stay on top of all the changes. Granted all my brother in laws work hard in the electronic/computer world and make more money than I do. But most of us in the car business truly do have a passion for the business. We just need help in keeping the balance in our lives, and find the things in our business that we truly like to do, and capture those moments and live them to the max. So hang in there flyboy, service managers are tough, and the most loyal and hard working members of a dealership team. It is only a pipe dream to think GM can change. They are too big and still are paralyzed by their own systems and stock holders. So we need to keep plugging along on our own self motivations. Good luck to both of you
Mike