GM Warranty Reimbursement

[RWillsin205]

Gerry,
Yes, we were aware of the labor rate change. At 102% our labor rate was lowered by 10.00 per hour. The increase from the parts markup was well beyond the loss in labor dollars. Our warranty labor rate went from 89.00 to 79.00 per hour.

[Fixed Ops Mgr]

I do know that when you apply for a warranty parts uplift the company doing the paperwork should be looking at the labor rate side of things also.
If a GM dealer is on option C warranty labor program the option C goes away when the dealer gets the authorization letter from GM to receive
retail pricing on parts. (after uplift is approved) The option C dealers now have to do the 100 RO review to prove their labor rates to GM. If the dealer was getting more
from GM warranty rate that what their effective labor rate is then GM will reduce the labor rate accordingly. This can happen with stores that were option C stores and they
get moved to option A because of the warranty parts uplift going to retail parts pricing.

I suspect that is what happened in RWillsin205's store.

[RWillsin205]

Yes, This is correct. We already had our 100 RO review and is the reason for the reduced labor rate.

[TimK]

While this is a huge gross profit increase for parts departments, I'm just letting you know upfront, don't get excited about your pay going up. While it was a huge increase from the great job parts employees are doing the increase of gross caused all parts employees pay plans to be changed. Didn't take pay cuts but didn't get increase either. At least my numbers on paper will look fabulous.

A pay cut is a nice incentive for parts employees to make more gross.

[preston705]

In north central West Virginia and we are at cost plus 81% on GM & Nissan warranty. We filed about a 1.5 years ago with both MFG's and rec'd this bump. We had an outside vendor preform the warranty adjustment and was worth every penny of it. They also did the service end at the same time and rec'd a modest bump at that time as well.