Falling incomes and a dealer responds to Bob Greenwood

Dear Editor,

I would like to know what is wrong with auto repair industry! I started my automotive apprenticeship in January of 1989 at a General Motors dealership in southwestern Ontario. When that dealership closed in 1992 I was making $15.00 per hour. I opened my own business repairing all makes and models of automobiles. I ran the business successfully for seven years until I was force to sell it (because of marital imperfections). I immediately went to work for a friend of mine who had a maintenance contract at an automotive factory. From 1999 until 2004, I worked as a lift truck mechanic. I was able to see vehicles being built by a labour force that consisted mostly of semi-skilled, undereducated workers. These individuals, even the “light duty” workers, all made about 25.00 per hour plus benefits and pension plans.

Unfortunately for me, the maintenance contract no longer belongs to my friend. Consequently, I had to hit the road looking for work. My search for work landed me at a dealership. Having been on my own or on contract work, I thought I would give this another shot.

Well, it’s now 22 days into my new career and I will tell you this, it will be a short career. Flat rate is not and should never be synonymous with quality workmanship. Don’t get me wrong, at my current employer’s dealership, quality workmanship is not being compromised — but the pay at the end of the week surely is! Labour rates for certain jobs are gravy work. Warranty work on the other hand is not. It is ludicrous that an OEM can pay their employees $25-$30 per hour plus benefits and pensions to build these machines but offer this those who fix them far less. Even when customers pay, the time for diagnostics is poor and then having to jockey from parts counter to service counter to get a go-ahead is a big waster of time. And when you are getting paid a flat rate, time is money. So far, all 22 of my days have been less than 8-hour days and my rate works out to be less than it was in 1992! It costs me more to put gas in my truck than I am actually making. If all technicians could somehow band together and say “we are not going to tolerate this anymore”, perhaps something might change.

Unfortunately, they all seem to relegate to the fact of “at least I have a job”. Even if that job is one giant leap backwards!

An Ontario Technician

Name withheld by request

Jim Anderton Replies:

This situation is very common in our industry from coast-to-coast, and it it’s far more important than issues about the lack of apprentices, training and even business management. The question is, what is a decent income for a skilled worker in this country? We’re coming off a Federal election that debated everything except the one issue that matters: our standard of living. You’ve run into the same problem that thousands of Canadians are facing: falling real incomes. “Globalization” is normally what the mainstream media call it, but I think it’s really a slow deflation, like the Depression, only in slow motion. It’s a trend that has to be stopped, one way or another, because motorists that can’t afford to repair their cars mean downward pricing pressures and that means low wages. The other way for wages to rise is by closing many garages and letting market forces raise prices. Whether profitability could be maintained is another question. Not enough people can earn a decent living in this country, including our customers who buy repair services. A lot of wealth has been generated in Canada in the last couple of decades, but not enough is landing in the pockets of consumers. Why? My opinions alone could fill a magazine! If this continues, we’re all in trouble. Please check out my editorial on page 6 for more on this subject.

Dear Jim:

It seems to me that the article by Mr. Greenwood is indicative of his experience in a single sector of the automotive market. I was wondering if he is aware that many if not all automotive dealerships subscribe to your magazine. To make statements like: ignore their lousy grammar or do not repeat their mistake by countering this type of hype is both punitive and irresponsible.

He states that: “the dealerships are after your clients!” Actually they are all our clients, it has been through our own negligence and lack of customer care that has placed our customers at the hands of others. Dealerships as well as manufacturers have taken substantial strides to ensure their customers are supported by the dealership network on a national basis. I can assure you we are not targeting anyone, we are only ensuring that our customers are aware of the attributes of having services and repairs performed at their franchised dealership. There is no “war” as stated.

I believe that this article is irresponsible with the editor taking an active roll in allowing its content to be printed. I have been in the automotive business since 1969, I am a licensed mechanic and have represented many manufacturers as well as having my own repair shop and consulting business. I have seen a great deal on both sides of this equation pros and cons alike.

These are my personal thoughts and do not represent those of other dealerships.

Regards

Stephen L. Potts, General Manager Formula Honda Inc.

Editor Jim Anderton replies:

Dear Stephen:

Thanks for taking the time to respond to Bob’s column. There is no question that one of Bob’s goals is to help independent service businesses compete with dealership service departments, and his firm, E.K. Williams, offers consulting and training services to that end. As I read his columns, there is nothing that couldn’t be equally applied to an “all-makes” dealer service department that wants to compete with a powerful local independent. Bob’s column represents his views, which is why we identify him as independent of SSGM’s editorial staff by the biographical statement at the end of each piece. Our policy is to not censor his or any opinion, although obviously anything illegal or actionable (which Bob has never written, by the way) would get my attention in a hurry. Opinions representative of SSGM and the editor appear in “Jim’s Rant” on page 6 each month. Your rebuttal is valuable, and we’ll apply the same standards by printing your letter word-for-word.

Where I will self-censor is in a situation like the one I experienced last year, when a Toronto new car dealer service manager (not Formula Honda) and tech recommended that they remove the just-installed Moog balljoints and replace them with O.E. parts because the Moog products were unsafe! In that case, they’re identical parts, made by the same manufacturer. That kind of behavior is irresponsible, as are the common incidents where unscrupulous service managers claim that warranties are threatened by simple maintenance like oil changes performed at independent centres. I didn’t identify either the dealer that attempted to cheat me, or the manufacturer, because readers could draw conclusions about all of that manufacturer’s dealerships. That’s responsible, but printing Bob’s opinion as he wrote it is also responsible, as long as readers know what he does for a living and where his “bias” comes from, which they do. Would I run an article supporting dealer service versus independents with the same disclosure? Yes, and also word-for-word.

Something on your mind? Write SSGM Editor Jim Anderton directly at SSGM, 1450 Don Mills Road, Toronto, Ontario M3B 2X7, or better yet, E-mail to janderton@ssgm.com. We can’t promise to answer every message, personally, but we read every letter and E-mail. Drop us a line!