Dealers Say NO to GM Essential tool audit

[Michael White]

Recieved a E mail from a GM dealer in Lapeer, MI. Per his E mail, there are a group of GM dealers that hired a attorney to review the dealer agreement with respect to essential tools. These dealers are not letting GM come in and audit their tools because it is not a requirement of their sales and service agreement. Per their attorney, the agreement spells out that the dealers only have to purchase the essential tools, and not go through the audit procedure. Has anyone heard of this or doing this. I e mailed the dealer to see what he says about what GM says about it.

thanks,Mike

[Terry Tucker]

Michael -- Please post your findings on this as I am sure many of us would love to tell the "tool police" to stay away. The real trouble is not the lack of the tools as it is the lack of tool organization..

[Michael White]

he same day I posted this note, I e mailed the servcie manager. Did not hear back from him. Do not know if this is a attempt to be a "urban legend" or the real thing.I was hoping someone here would know the dealers doing this.
Mike

[sallen1]

If the sales and service agreement states that the dealer must have essential tools, then what is the path to accountability? The only thing the factory can do is an 'audit', if you will. Therefore, hiring an attorney to fight a 'tool audit' might be a waste of money...

I think this talk of 'essential tools' and audits might be alot of hot air. Why would the factory waste time on tools when they can perform a complete sales and service audit and pick up some real money?

scott

[robc]

Since my newsletter has been delayed, and since this article says everything I know I am just going to post the major points of my lead story in the current issue of Warranty Dollars & Sense for GM Dealers:

Tool audits under debate

While one can understand a dealer's apprehension, and we'll discuss the "cons" of these audits in a moment, these fears seem inconsistent with the actual results of the reviews. The vast majority of post-tool audit comments which I have heard have been positive. Several times I have heard managers say that the examiners were amicable and willing to work with the shop. The average charge, based on our anecdotal information, is approximately $500 - $1,000.
Many service managers also told me that the preparation time was less than they expected.
I don't think anyone can be against having the required tools, and using them to properly perform repairs. Similarly, all shops should have their own adequate tool inventory system and required use policies. If tools come up missing, not only would I recommend you replace them, but also try to use the information to discover if you have a thief in the shop. You can rest assured that someone who would steal tools will not stop there.

That being said, let's suppose you do decide to buck GM's plans and that you don't want to have your shop disrupted with these auditors. What, exactly, can you do? I think this depends entirely on how far you are willing to pursue the issue. Let me tell you what I have heard, and of situations that have been presented to me, before you decide.

It is my understanding that a Midwestern-metro dealer association banded together and kept GM out of their stores. I have heard similar stories out of other associations and 20-groups. Even individual dealers have told GM to "stay out!"
There is no agreement between GM and dealers for such an examination. It is way beyond the scope of the Sales and Service Agreement and the Policies and Procedures Manual. All dealers are obligated to do is purchase essential tools, which they do by forced shipments from GM. This fact, combined with the costs associated with the review (either your own employee's time or paying $87.50 per hour for SMI to reconcile the tool inventory), added to the potential liability for replacing tools should be the basis of your challenge.

Right now, again based on third-party reports, I have heard SMI has backed down when confronted by such protests. If this is true, I think it is mostly out of convenience. There are a lot of dealers to survey out there and why would they fight to force their way into one store, instead of just moving to the next. It's not their battle, why would they want to fight it.

A final word of advice, if the audit does occur and your shop is found to be missing tools, there is no requirement that you have to buy the tools from Kent-Moore if a quality replacement exists, say from Snap-On or Mac tools. Also, in this era of dealership realignments and consolidations, GM is required to repurchase tools from terminated dealers. I have been told that because of this, there are a number of used tools also available for purchase. Consider those options before buying all new replacement tools.



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** Rob, Editor WD&S **
Help is only a message post away!
robc@dealersedge.com

[slilly]

But maybe in some circumstances there is a silver lining in this "essential cloud".
We just had our tool audit yesterday, but we had worked hard beforehand to make sure that we were organized and ready. Our auditor was a reasonable and down to earth fellow.
Through his audit and our own inventory we did find that we had had a little over $2k was either missing or broken which isn't bad out of $40k worth of Chevrolet, Oldsmobile, and Cadillac tools.
But the silver lining is that we found that since we purchased Chevrolet and Cadillac two years ago we have some multiples too. So first we plan to contact Kent-Moore to return what we can and see if we can't sell the others to dealerships that knowingly, through their own inventories prior to the audit, are short these items. Becuase, after the audit he will ask you sign a tool order NOW!
By the way, some of my neighboring dealers have been down $1700-$2000 for "missing or broken" stuff which are single line dealerships or small multi-franchises.

[This message has been edited by slilly (edited 06-04-99).]

[David Henson]

As a reminder, many of Kent-Moore's tools are covered by a warranty similar to Snap-on, MAC, Craftsman and carry a lifetime warranty through Kent-Moore. I don't think this applies to most of their electrical equipment.

[Michael White]

I am curious as to what kind of missing tools did they find. Are they tools that you need or use daily, weekly, or once in a blue moon?? $k in tools is a lot. what do you techs do without the special tools needed if they are frequently needed tools
Mike White

[GreggT67]

One aspect I haven't seen mentioned about the whole tool audit controvery are the dealer franchise laws. Many of the states have mentions of special tools in the franchise laws.

As an example, take a look at this passage from the NY Franchised Motor Vehicle Dealer Act.

"It shall be unlawful for any franchisor to directly or indirectly coerce or attempt to coerce any franchised motor vehicle dealer: a) To order or accept delivery of any motor vehicle or vehicles, appliances, tools, machinery, equipment, parts or accessories therefor or any other commodity or commodities which shall not have been voluntarily ordered by said franchised motor vehicle dealer except any such items required by a recall campaign."

[robc]

And, unfortunately, telling a dealer you don't get the cars unless you buy the tools isn't considered coercing.

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** Rob, Editor WD&S **
Help is only a message post away!
robc@dealersedge.com