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FIXED OPS JOURNAL
inside
February 2016
12
features
20
12
20
26
32
39
46
50
52
55
Mobile mechanics: Do shop-free technicians threaten your business?
Mark Smith: A fixed-ops-focused dealer aims to change the industry
Adding capacity: Sales spur FCA, Subaru dealerships’ fixed-ops growth
Designed for service: A look at a Minnesota dealership’s makeover
Weekend work: Service extends to Saturday, even Sunday
Tech exodus: How outdated policies worsen the tech shortage
Before Xtime: The origins of widely used scheduling software
Older parts: Toyota, Ford respond to older cars on the road
5 minutes with: Ford’s Toney, Toyota’s Laukes
departments
32
4
6
8
29
56
58
Editor’s Letter: Welcome to Fixed Ops Journal
Service Counter: Tracking fixed-ops numbers
Legal Lane: Court cases that affect you
Richard Truett: Toolmaker targets new techs
Shop Talk: One question, multiple service directors
Fixed in Time: A look at service of yesteryear
ABOUT THE COVER
39
Fresh start: Mark Smith is
bringing decades of fixed ops
savvy to BMW of San Antonio
and its new owner, Principle
Auto. PAGE 20
COVER PHOTO: DIANA LOTT
Fixed Ops Journal Staff
● EDITOR: Dave Versical
● DEPUTY EDITOR: James B. Treece
● DESIGNER: Steve Massie
● REPORTERS: Diana T. Kurylko, Richard Truett, David
Undercoffler, Tom Worobec
● COPY EDITORS: Tom Fetters, Patricia C. Foley, Omari
Gardner, Elizabeth Hardy, Karen Faust O’Rourke
● CORRESPONDENTS: Eric Freedman, Jim Henry, Katie
Kerwin, Tim Moran, Nora Naughton
>>
Webinar on recalls
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● WHEN: Thursday, Feb. 25, at 2 p.m. EST
● SIGN UP: autonews.com/webinar02252016
● ADVERTISING: Rick Greer, Director of Sales, rgreer@crain.com
FEBRUARY 2016
PAGE 3
FIXED OPS JOURNAL
DEALERS & FIXED OPS
■ Considering blocked career paths and the rocky road ahead
W
hy, I asked Mark Smith,
aren’t more auto
dealerships run by
executives who have a rich
background in fixed operations?
The question was nagging at me as
Automotive News prepared to launch a
quarterly magazine devoted to helping
dealers and their fixed-ops managers do
better in this critical-to-profits operation.
As with most every question I posed to
DAVE
the 51-year-old Texan who appears on
the cover of this first issue of Fixed Ops
Fixed Ops Journal
Journal, Smith had a swift and clear
response.
As he sees it, high-potential employees in the parts, service and
collision departments of franchised dealerships often become
victims of their own success.
They may become fixed-ops chiefs at a number of stores. They
have unique skills, after all. And as dealers typically aren’t masters of
that universe, they can’t afford to lose anyone who is. So they pay
their fixed-ops directors very well.
Those directors then pay a price of their own: They are too valuable
in their roles to be shifted away from them.
It is different on the sales side. As Smith explained, ambitious
salespeople become successful sales managers. Dealers, who
typically have similar backgrounds and are often camped in the
same building, see them in action every day.
The best ones become general managers. Those general managers
are then first in line for all sorts of opportunities from there.
Smith himself is a rare exception to that pattern.
He made his initial mark on the fixed side of the business at Sewell
Automotive of Dallas, a company with a national reputation for
treating customers right. Since 2014, he’s been running his own
operation as co-owner of Principle Auto, a three-store-and-growing
group based in San Antonio.
Smith may well have ended up as one of those career-long fixedops guys if his boss and mentor, Carl Sewell, hadn’t pushed him out
of his comfort zone. Stops in used cars and then new were steps to
an eventual COO post at Sewell.
Nor would Smith have had the broad command of the industry he
showed during our morning-long meeting in December.
It didn’t take long for him to get stirred by the way this industry
treats its technicians.
That was one of many topics he feels strongly about. The
importance of continuing education. Ways to structure a parts
department. The value of being a company that encourages its
employees to read. Customers’ need for transparency. Processes for
weeding out waste and creating efficiency. The benefits of having
lots of women on staff. And, yes, his passion for this side of the
business — he actually at one point said, “I love fixed operations.”
These days, he’s gotta be lovin’ sales, too — especially as demand for
VERSICAL
PAGE 4
FEBRUARY 2016
Principle’s Volvos, Minis and BMWs rises under their new owners.
Yet, as everyone in this industry is keenly aware, this six-year U.S.
sales streak will someday sputter.
Those who don’t have the fixed side of their business in shape are
going to hit the rockiest road.
You can bet that Smith won’t be among them.
We hope this publication will help smooth your ride through the
next slump, too, as well as through all the peaks and valleys beyond.
Dave Versical
Editor
Fixed Ops Journal
P.S.: Thoughts on this first issue? Suggestions? Story ideas? Please
send them to me at dversical@crain.com.
Beauty
and Brains.
Know what customers want
before they arrive.
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FIXED OPS JOURNAL
SERVICE COUNTER
Our quarterly statistical snapshot of the fixed ops world
Top criteria given by consumers
for choosing a service provider
Total cost is reasonable
Vehicle is available when estimated
Vehicle fixed right the first time
Accurately informs me of total cost up front
Can get appointment quickly at convenient time
Has great reputation with others
Technicians are certified and highly qualified
Clearly explains what was done and why
73%
58%
55%
53%
51%
49%
46%
44%
Median job tenure
POSITION
NONLUXURY BRAND
Service manager
Parts manager
Service adviser/writer
Service technician
Parts consultant
General manager/operator
Sales manager
Sales consultant
6.5 years
11.8
2.1
3.8
5.3
8.6
3.9
1.4
LUXURY BRAND
7.7 years
12.8
3.5
4.2
7.3
10
4.2
2.1
Where the profits are
Service and Parts’ share of
AutoNation’s revenue, gross profit
REVENUE
2013
2014
2015
15%
15%
15%
GROSS PROFIT
40%
40%
41%
Source: Carlisle 2014 Technician/Service Advisor Survey; 2015 NADA Dealership
Workforce Study; Carlisle 2013 Automotive Technician Survey; AutoNation
PAGE 6
FEBRUARY 2016
30
33% 83%
Minutes per day
technicians spend
asking the service
adviser for clarification
Technicians’ estimate of
the proportion of
customers to whom
service advisers provide
unrealistic waiting times
Service advisers’ estimate
of the proportion of
customers to whom they
provide realistic waiting
times
20-25%
20-40%
-4.4%
4.4%
Percentage of their time technicians spend on
routine maintenance
Percentage of their time technicians spend on diagnostic work
Year-over-year
earnings decline for
service technicians
in 2014
Year-over-year
earnings increase
for service
advisers in 2014
A
T
A
D
E
R
O
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M
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T
O
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N
E
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r,
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egra ing you
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ep
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y ke ders.
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Deal
ing y all majo
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i
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am
ith
s t re
ed w
t
c
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conn
Learn how DealerSocket saves you from
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Booth #2477C. Schedule a demo for
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866.441.9664
FIXED OPS JOURNAL
LEGAL LANE
■ VW store pays a price
in phony warranty probe
W
hat can happen when an automaker
suspects a dealership of phony warranty claims? For a Corona, Calif., Volkswagen store, it meant an audit, site visit, lawsuit
and now a confidential settlement without
an admission of wrongdoing.
Volkswagen of America accused CardinaleWay Volkswagen and five employees, including a service manager and two technicians but not the dealer, of fraud, including
sham time sheets and sham repair claims.
The inquiry followed an anonymous tip,
ostensibly from an employee, suggesting an
audit, “especially on warranty and rentals.”
VWoA conducted a statistical analysis of
claims and found a “high probability of noncompliance with VWoA’s policies and procedures,” which prompted a claim review and
site visit by warranty field managers.
The review discovered allegedly fraudulent
time sheets with “overlapping and concurrent time punches and repeating minutes”
for technicians who purportedly made repairs during lunch breaks and worked more
than 24 hours a day, according to court documents. The store also obtained reimbursement for “sham repairs” that weren’t done or
were unnecessary, the suit alleged.
VWoA had sought compensatory and
punitive damages for fraud, breach of contract, bad faith and business and vehicle law
violations. Now the two sides are preparing
the final documents for the settlement.
■ Supreme Court to rule on
service advisers’ overtime
M
ust dealerships pay overtime to service advisers? For now, the answer depends on a store’s location.
Yes, if the dealership is in any of nine Western states. No, in eight Southern and mid-Atlantic states.
As for the future, the U.S. Supreme Court
has accepted a California Mercedes-Benz
dealership’s request to resolve the conflict.
Arguments are expected this spring.
The issue arose when five service advisers
sued Mercedes-Benz of Encino for violation
of overtime pay requirements of the Fair Labor Standards Act.
A lower-court judge accepted the store’s
argument that the exemption for “any salesman, partsman or mechanic primarily en-
PAGE 8
FEBRUARY 2016
gaged in selling or servicing automobiles”
covers advisers.
But the 9th U.S. Circuit Court of Appeals disagreed, finding the provision ambiguous and
accepting the U.S. Labor Department’s interpretation that they were entitled to overtime.
Under that interpretation, it said, “A salesman is an employee who sells cars, a partsman is an employee who requisitions, stocks
and dispenses parts, and a mechanic is an
employee who performs mechanical work
on cars.
“Service advisors do none of those things.
They sell services for cars. They do not sell
cars, they do not stock parts and they do not
perform mechanical work on cars.”
The appellate court for the 9th circuit hears
cases from Washington, Idaho, Montana,
Oregon, California, Nevada, Arizona, Alaska
and Hawaii.
In earlier cases, the 4th U.S. Circuit Court
of Appeals — which handles cases from
Maryland, Virginia, West Virginia, North
Carolina and South Carolina, and the 5th
U.S. Circuit Court of Appeals — which covers
Texas, Louisiana and Mississippi — ruled
that the exemption covers service advisers.
■ Decision on moving techs
to nonunionized shop
D
ealerships that consolidate stores or relocate employees face a potential trouble spot.
The Chrysler bankruptcy led to a 2009 decision by Burke Automotive Group Inc. to
close its Dodge of Naperville store in suburban Chicago and move the store’s six unionized mechanics to its larger Naperville JeepDodge store, where the existing 14 mechanics weren’t represented by a union.
But the dealership didn’t negotiate the
transfer with the International Association of
Machinists, unilaterally lowered the transferred workers’ pay and benefits to match
their nonunionized counterparts and withdrew union recognition.
Two mechanics quit rather than accept the
lower pay package.
Those were unfair labor practices, the District of Columbia U.S. Court of Appeals
ruled, saying the dealership could have negotiated pay, benefits and working conditions for transferred mechanics that differed
from those outside the union.
Although “it may be unworkable to continue
recognizing a union representing only a his-
toric bargaining unit if unit employees are
working side-by-side with non-unit employees,” the court said, “it may turn out that
Burke’s withdrawal of recognition was simply
premature — but premature is still improper.”
Dealer lawyer James Hendricks Jr. of
Chicago said dealers must pay careful attention to the National Labor Relations Board’s
“constantly changing rules.”
Only two transferred mechanics still work
at the dealership, and “we haven’t heard
from the union after the last bargaining session in 2011,” Hendricks said.
The dealership group has asked the
Supreme Court to review the case.
■ Anti-union remarks spell
trouble for dealership
W
hen it comes to unionization, managers should be careful what they say —
or else. That’s the lesson from the 7th Circuit
U.S. Court of Appeals, which upheld a National Labor Relations Board finding that
Libertyville Toyota in Illinois committed unfair labor practices when two high-ranking
corporate executives made improper antiunion remarks and when the store fired a
painter involved in union activities.
It all began in 2011 when “union activity
was afoot” at the store, as the court put it.
Painter Jose Huerta was suspended and then
fired after an anonymous caller said he was
promoting union activities and had been
charged with drunken driving.
Also, a vice president, who was also associate general counsel and regional human resources director of the dealership’s corporate parent, AutoNation Inc., tried to dissuade the service department’s 80 employees from supporting an organizing drive by
the International Association of Machinists
and Aerospace Workers.
The NLRB and appeals court concluded
that the executives’ comments at the staff
meeting — secretly recorded by an employee — threatened that unionization would be
futile, that unionized employees faced demotion and that supporters would be blacklisted, as well as implying that pay would increase if the unionization effort failed.
The dealership was ordered to reinstate the
wrongfully fired employee with back pay. On
Nov. 3, the appeals court denied the store’s
petition for a new hearing. ■
- Eric Freedman ❙ foj@autonews.com
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FIXED OPS JOURNAL
“
“A [dealership-provided]
shuttle service just isn’t
enough to meet the demand
for convenience anymore.”
THILO KOSLOWSKI, Gartner Inc.
Domestic bliss, as envisioned by the YourMechanic.com home page.
Competition in the palm
of your customers’ hands
■ Uber-style mechanics make house calls in 22 states and D.C.
NORA NAUGHTON
foj@autonews.com
D
ealership service departments
have long competed against the
independent mechanic or shop
down the street.
Now they have to compete against the mobile mechanic driving up the street.
In the style of Uber, a Silicon Valley company called YourMechanic.com enables
consumers to use their phones to bring car
repairs to their doorstep.
YourMechanic’s mission is simple: establish transparency and build trust in automotive service, CEO Art Agrawal said.
“If you don’t know anything about cars, the
[repair] experience is very black box,” he
said. “We wanted to solve this problem of little to no transparency when getting your car
repaired.”
The mobile mechanics concept is common. Independent providers all over the
U.S. offer their services through companies
such as Craigslist and Angie’s List. Agrawal’s
innovation is providing consumers with a
one-stop-shop experience.
Consumers requesting service give YourMechanic information about the vehicle,
including the year, make
and model, and what appears to be wrong. Based on
CEO Art Agrawal:
“Thousands of
repairs” can be
made outside
of a shop.
PAGE 12
FEBRUARY 2016
that information, YourMechanic gives the
customer a list of the parts, services and
costs needed to repair the vehicle. YourMechanic operates in 32 markets and 22 states.
“We only move to a city when the demand
presents itself,” Agrawal said. “We’re working
on getting our name out there nationwide,
and people are seeing us and asking for us.”
Paying for convenience
Convenience is the most important feature
that mobile mechanic operations such as
YourMechanic offer, said Mark Seng, an IHS
Automotive analyst.
“As we’ve seen from companies like Uber,
customers will pay a premium for convenience,” he said. “I don’t see how the idea of
mobile mechanics could fail to catch on.”
The mobile mechanic business faces growing pains, but “they’ll figure that stuff out,”
Seng predicted.
“The demand is already there, and will
probably only continue to grow,” he said.
“The rising age of cars on the road means
people will need to do more routine maintenance, and they’ll want to save both time
SEE MOBILE, PAGE 15
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> What are the 2016
publication dates?
● Feb. 15
● May 16
● Aug. 15
● Nov. 21
FAQs
ABOUT
Fixed Ops Journal
> What about webinars?
Four will be held this year. The first,
“Recalls: The Ultimate Retention
Tool,” will be presented by Lee
Harkins at 2 p.m. EST on Feb. 25.
Sign up at autonews.com/
webinar02252016.
> How do I get a print issue?
Most Automotive News subscribers
will receive Fixed Ops Journal with
their weekly issue.
Subscribe using the link at
autonews.com/getfixedops.
If you are a print subscriber and did
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877-812-1584.
Individual copies are available to
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Join The Fixed Ops Journal
Professional Community to share
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10% or more this year?
T Is your CSI above Zone Average?
T Are you averaging at least $125 per Q-Lube RO?
T Have your CP Hours per RO increased by .3 hr over last year?
T Is your Service Absorption growing?
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PAGE 14
FEBRUARY 2016
FIXED OPS JOURNAL
“
“I don’t see how the idea of mobile mechanics could fail to catch on.”
MOBILE
CONTINUED FROM PAGE 12
and money in the process.”
Thilo Koslowski, automotive practice leader
at research firm Gartner Inc., said dealers
should view the emergence of YourMechanic
as an opportunity, not a threat.
“Dealers need to look at this new idea and
think about how they can provide those services better,” he said. “Something as simple as a
shuttle service just isn’t enough to meet the
demand for convenience anymore.”
Koslowski cited obstacles such as fuel costs
and the varying levels of requested services
among potential problems YourMechanic
might face as it grows.
“In this era of one-click decisions and instant gratification, we have the platforms we
need to create these services” such as
YourMechanic, he said, “but the way they
are provided has to be called into question.”
‘Back-burner issue’
Mark Rogers, a dealership management
consultant for the National Automobile
Dealers Association, classifies threats from
mobile mechanic operations as a “backburner issue.”
“Dealers just have so many other concerns
right now. Really, dealer service departments are more worried about having too
many customers,” he said.
Rogers said he sees the potential draw for
consumers, but contends that businesses
such as YourMechanic are unlikely to pose a
threat for several years.
“The complexity of running an operation
like [YourMechanic] is enormous,” he said.
“From cost to available services, there are a lot
of moving parts to take into consideration.”
Chris Sutton, vice president of automotive
retail at J.D. Power and Associates, sees potential in the mobile mechanic business, but
dealership repair services still have the upper hand.
“I’m not sure it will make much of a dent in
the dealer business. These days, the technology in vehicles is so complex, that you really
need to have the dealers’ diagnostic tools to
properly assess the vehicle,” he said.
Limitations
Agrawal made it clear that YourMechanic
is no stranger to obstacles.
“When we were building this whole platform I can’t tell you how many times we said,
‘This just isn’t going to work,’” he said.
MARK SENG, IHS Automotive
YourMechanic.com
Meet a mechanic
● CEO: Art Agrawal
● What it does: A mobile
mechanic service that
makes vehicle repairs at
the customer’s location.
A consumer sends
information on the
vehicle, including the
problem. YourMechanic
replies with a quote or a
fixed price for the work, including
services and parts. If that’s
accepted, the mechanic drives to the
customer’s location.
● Where: 32 markets, 22 states
● Founded: 2012
● Headquarters: Mountain View,
Calif.
On its website, YourMechanic.com
posts brief profiles of some of its
mechanics, along with customer
reviews of their work. Here’s an
example.
Grzegorz
● Rating: 4.5 stars
● Years of experience: 36
● No. of reviews: 230
Grzegorz grew up in Poland. He has
an extensive training in European
cars. He is also a diagnostic pro.
● What a reviewer says: “Daryl,” of
Pleasanton, Calif, wrote: “Grzegorz
was exactly what I was looking for.
My son’s Porsche 914 was driven
every day up to five years ago then
had some fuel injector issues and
has sat idle for five years not able to
start. I had trouble finding a 914
mechanic (rare) who would get it
going let alone come to the house!
Grzegorz went through the basic
engine and got it running in an hour. I
have him coming back for a full tune
up. If you are looking for a very
trustworthy mechanic, Grzegorz is
your man.”
“There are thousands of repairs that can be
made” by mobile mechanics.
Today, YourMechanic handles repairs for
which its mechanics have tools. Agrawal’s
team tracks the tools each mechanic owns
and uses a matching algorithm to assign the
right mechanic to the right repair.
YourMechanic lists the repairs it may be
able to offer on its website: yourmechanic.
com/services. They range from simple oil
changes to automatic transmission replacements.
While the list is impressive, some available
repairs might be specific to the mechanics in
that area. Occasionally, customers’ requests
have had to be turned down.
“This model works when you reach that
stage that McDonald’s hit, which is that the
burger is consistent wherever you go,”
Agrawal said. “We’re working toward that
kind of consistency.” ■
●●●
YourMechanic.com: I tried it; I liked it
A
utomotive News authorized
one of its car-guy reporters,
Los Angeles-based David
Undercoffler, to put
YourMechanic through its paces on
his pickup. Here’s his report.
After 155,000 miles, Groot is still
ticking with only faint signs of age.
One of them was a very slow leak at
the rear main seal of the engine. It
had been diagnosed by a mobile
mechanic I’ve used in the past to
good results.
Groot had a small leak. And it was
The diagnosis was a little terrifying.
going to be a big bill. Or so I thought. Undercoffler
Replacing Groot’s rear main seal
My 1996 F-150 — XLT, extra cab,
would cost a hefty lump of cash on lalong bed, V-8 — is as big and dumb as they
bor since you need to drop the transmission to
come. If it could talk, all it would say would
get to it. At this point, Groot is largely a lowbe “I AM GROOT,” not unlike the walking
mileage weekend warrior used for hauling
tree monster you may have seen in
SEE USER, PAGE 16
Guardians of the Galaxy. Hence its name.
FEBRUARY 2016
PAGE 15
FIXED OPS JOURNAL
USER
CONTINUED FROM PAGE 15
outdoor gear around Southern California.
He’s worth more in sentiment than in dollars.
Then came a fortuitous assignment from
my editor: Check out YourMechanic.com.
Uber-like
This Web-based company dispatches local
mechanics to your door, not unlike the private mechanic I had been using. It was
launched in the San Francisco Bay Area in
2012. Since it uses on-demand scheduling
and contract workers rather than full-time
employees with benefits, YourMechanic was
quickly dubbed the Uber of car repairs. Winning TechCrunch’s annual Disrupt SF competition in 2012 didn’t hurt.
Using the service is straightforward. Users
find their specific vehicle on the company’s
website or smartphone app, select from myriad options for repairs, diagnoses, maintenance or roadside assistance. YourMechanic
then gives you a flat-price quote for parts and
labor ahead of time. If that’s the service you
have done, that’s the price you pay.
“
YourMechanic was
quickly dubbed the Uber
of Car Repairs. Winning
TechCrunch’s annual Disrupt
SF competition in 2012
didn’t hurt.
It’s $70 to have a mechanic come to you
and spend an hour inspecting your vehicle.
If you go ahead and have any work done
through YourMechanic, that $70 is credited
for the service.
YourMechanic sent Lucas, a straightshooting mechanic with 11 years of experience and a sharp sense of humor. He’s been
with YourMechanic for about a year and is
among the 30 percent of the company’s mechanics who don’t work at brick-and-mortar
shops. The freedom to set his own hours is
largely what drew him to YourMechanic, Lucas told me.
Good news
After 60 minutes of crawling around Groot,
he had some good news. Given the tiny
amount of oil leaking from the rear main
seal, I didn’t need it repaired right now. Lu-
PAGE 16
FEBRUARY 2016
Undercoffler’s 1996 F-150,
known as Groot. The leaking
parts are at right. At left, the
switch for the power window,
which got a new motor. The
YourMechanic technician
took care of both.
cas told me to keep an eye on the engine’s oil
level. Anything beyond normal use or any
larger spots in the driveway and the seal
would need replacing.
Ditto for a small leak he found in the transmission fluid line going into the radiator. He
wrapped the threads of the line in Teflon
tape and determined that nothing needed a
fix now; I just needed to keep an eye on
transmission fluid levels.
Having the mechanic tell you what your
vehicle needs and does not need is exactly
the point, said YourMechanic CEO and cofounder Art Agrawal.
“Mechanics don’t make very good salespeople,” Agrawal, 33, told me. “That’s a good
thing for the YourMechanic user, I believe.”
There’s no service manager or sales adviser
trying to sell customers parts or service they
don’t need. Just a person fixing their car.
This works toward YourMechanic’s goal.
“How do we create an experience where the
consumer doesn’t feel like they’re taken advantage of?” Agrawal said. Upfront price
quotes before the mechanic sees the car, or
the owner, is also crucial to customers walk-
DAVID UNDERCOFFLER PHOTOS
ing away from the experience happy.
The company has its own parts catalog,
sourced from larger stores such as AutoZone
or Carquest. The web company’s mechanics
go through everything available, and then
pick the best options. This means that when
they are choosing a part for a repair, it’s
based on what works best rather than what
comes with the largest profit margin, Agrawal said.
With the matter of the leaks resolved for
now (Stay strong, Groot!), the only other obvious repair on my truck was installing a new
motor for the driver’s side window. This repair has been quoted at several hundred dollars by a couple of shops and dealerships I
had called. YourMechanic did it for $138.91,
parts and labor included.
Overall, I came away impressed with the
service. At 20 years old, Groot is no spring
chicken. It’s a good feeling to have Lucas’
number in my phone to tell me what the truck
will — and won’t — need in the future. ■
You may email David Undercoffler
at undercoffler@crain.com
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“
“Frankly, I think because they’re using a new model they try harder.”
DAVID STURTZ, on YourMechanic.com
Service warning: The absence of dealerships as a selling point
JIM HENRY
foj@autonews.com
D
ealers ought to keep an eye on
ventures such as YourMechanic.
com because they’re part of a
broader trend — and a well-funded one at that.
So says David Sturtz, a self-described
“feisty entrepreneur” who knows a thing or
two about online tools and the service world.
He’s a co-founder and former CEO of the RepairPal auto pricing app. He logged more
than two years at appointment-scheduling
vendor Xtime. And he’s now senior vice
president of TrueCar Inc.’s used-car trade-in
tool, TrueTrade.
“There’s a fair number of these companies
that are sprouting up,” Sturtz said. He cited
used-car marketers such as Beepi and Car-
Sturtz: As alternatives emerge, “dealerships are
going to have to offer some alternatives, too.”
vana, which pitch the absence of traditional
dealerships as a selling point.
“They’re getting a lot of venture money —
hundreds of millions. It simply makes sense to
contemplate there is a theme here,” he said.
“Here’s more evidence building that alter-
natives are emerging and they may be successful. The dealer at least needs to be aware
of these and keep an eye on them, and if it
starts to hurt the dealer business, dealerships are going to have to offer some alternatives, too,” Sturtz said.
Sturtz said he has used YourMechanic.com
and liked it. He acknowledged that a traveling technician can’t do everything, such as
engine repairs that require heavy lifting.
“For routine maintenance — oil changes
— it’s convenient having a guy come by the
house who’s knowledgeable, friendly, who
tended to all the details,” he said.
“Frankly, I think because they’re using a
new model they try harder,” he added.
“We’ve all seen dealerships and service departments that are not always focused on a
great customer experience.” ■
●●●
Maintenance, basic repairs ‘right in your driveway’
YourMechanic.com lists 46 “frequently asked questions” under seven topics. Here’s a sampling:
Can a mechanic really fix my car at my location?
Yes! All maintenance and basic repairs can
be done right in your driveway. Our certified
mobile mechanics carry all the tools, scanners and lifts to do most repairs at your
home or office. We service several thousand
cars every month, from simple jobs such as
oil changes and replacing brakes to more
complex repairs like replacing timing belts.
As long as you have a driveway, parking lot or
garage, you can use this extremely convenient service.
Do you do warranty work or collision damage repair?
If you have an extended warranty, we can
work with your warranty provider. We currently do not work with OEMs and do not offer any OE warranty services. We also do not
provide any collision related repairs.
Prices
What is your hourly rate?
We don’t charge for our service based on
time. We give you a fixed price upfront and
you pay the same price whether it takes less
or more time for the mechanic to complete
the service. We calculate the price based on
an estimated time and we apply a labor rate
that varies by city — it can be anywhere be-
PAGE 18
FEBRUARY 2016
OE, OE equivalent or aftermarket.
Mechanics
tween $60-$90 depending on where you live.
Am I supposed to tip the mechanic?
Our mechanics do not expect a tip of any
kind. Instead of leaving a tip, please recommend the mechanic to all your friends. You
may also want to write a review on their profile and rate us on Yelp. Our mechanics get a
higher pay from us if they have higher ratings
on their profile and Yelp.
Parts
How do I know the parts are of good quality?
The parts team at YourMechanic has gone
through a rigorous filtering process to select
the brands that are best suited for your car.
Our parts catalog has a list of approved
brands for each type of car and each type of
part. … Whenever possible, the parts used
are OE parts or aftermarket parts that meet
or exceed OEM service specifications. When
reviewing your quote, you will see the brands
of the parts. Each part is clearly marked as
How do mechanics work with YourMechanic?
YourMechanic is a network of expert mobile mechanics. Independent mechanics apply to join our network. Every mechanic goes
through an extensive screening process that
includes background, criminal and reference checks. Once approved, mechanics are
booked for jobs through YourMechanic.
Your service agreement is with YourMechanic, not the individual mechanic. Although
you are provided the service by the mechanics
in our network, we stand behind the service
with our 12-month, 12,000-mile warranty.
Are the mechanics certified?
Most of our mechanics are certified by ASE
(National Institute for Automotive Service
Excellence). Some of our mechanics are certified by similar organizations and/or have
dealer or factory training. You can see mechanics’ certifications on their profile online,
which is accessible during the booking
process. You can also review their experience, work history, jobs completed for other
car owners, fees paid by other car owners,
and real customers’ ratings and reviews. We
take pride in being totally transparent. ■
They come for service.
You get a new sale.
An additional source of quality sales leads
delivering better gross profit and a higher closing ratio.
Digital
Advertising
Reputation
Management
Market
Strategy
SEO and
Social
Targeted
Marketing
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Protect your customers. Get more of theirs. | 888.841.8130 | nakedlime.com/xtreamservice
© 2016 Naked Lime Marketing. All rights reserved. 2/16
Mark Smith, center, says he felt his BMW technicians’
skepticism when he met with them for the first time. He’s walked
his talk by spending $674,000 on equipment in 18 months.
COVER STORY
DIANA LOTT
Putting the back shop
front and center
■ Sewell protege Mark Smith
wants to change how the
industry treats fixed operations
Dave Versical
I
dversical@crain.com
magine shining as a Nordstrom employee
for decades and then steering your own fashion retailer.
Mark Smith, 51, can relate. He co-founded
the Principle Auto dealership group in mid2014, coming to San Antonio with a reputation as one of the savvier fixed operations
minds in the business.
He had spent 25 years at Sewell Automotive Cos. of
Dallas, where he started as a Cadillac service adviser
and eventually became COO. Carl Sewell, Smith’s
longtime boss and mentor, ran a company with a
Nordstrom-like reputation for customer service. When
Sewell published a book called Customers for Life,
that image spread beyond the auto industry.
PAGE 20
FEBRUARY 2016
Smith and co-owner Abigail Kampmann
have started small: three import-brand stores,
which came from her family’s business. They
chose “Principle” as their name to trumpet integrity. They plan to expand — not just in size, but
in the mark they make on auto retailing.
If Smith has his way, the back shop will be
front and center.
“I really want to change the industry, and it’s going to come
mainly from the fixed side,” says
Smith, who is COO.
There are, he says, hard, practical reasons:
“If you are not heavy into fixed
operations by the next downturn
— unless you got tons of cash in
the bank — just figure out who
you’re going to sell to.”
And softer ones:
“We have an industry that treats
SEE SMITH, PAGE 21
Smith: “We
have an industry
that treats
technicians like
second-class
citizens, and it
drives me nuts.”
FIXED OPS JOURNAL
SMITH
CONTINUED FROM PAGE 20
technicians like second-class citizens, and it
drives me nuts. And I’m going to do everything I can for the rest of my career to change
that.”
Shop spending
So far, he and CEO Kampmann have invested millions to improve their profitable Volvo
and BMW-Mini stores in San Antonio and
their Toyota-Scion outlet in Memphis, Tenn.
Much has been spent on things the customer never sees. That includes remodeled
locker rooms for technicians, spruced-up
parts departments and
new shop equipment.
Randy Hearn, 46, was
among the skeptical mechanics who heard Smith
and Kampmann address
BMW of San Antonio
technicians in July 2014,
just days after taking conKampmann
trol of the store.
The mechanics had a long list of needs: updated tire and balance machines, battery
chargers, diagnostic equipment. But 15 years
on dealership shop floors with absentee
owners who barely noticed the service department had taught Hearn not to get his
hopes up. His colleagues, he says, were even
more skeptical.
Smith remembers “a lot of doubt in the
room” that day. He hadn’t even come
equipped to take notes. But he scribbled a
list on the back of business cards. And within
a few months, he would spend $1 million on
new and upgraded equipment and “cleaning
the place up.” By the end of last year, the tab
would rise to $1.59 million — $674,000 on
equipment, $912,000 for the facility.
“It’s still not great,” Smith says.
But Hearn reports, “We have everything
that we need currently. They did exactly
what they said they were going to do.”
“
Smith “was always challenging us at Lexus
to do things better.” DICK CHITTY, former Toyota exec
An established dealership group and Toyota’s fledgling luxury brand were both placing big bets on customer service. As a result,
Sewell Lexus got more than routine attention
from Dick Chitty, the longtime Toyota parts
and service boss who had been picked to set
the tone for Lexus’ service operations.
Two months after joining the company,
Smith was named Sewell Lexus’ parts and
service director. Chitty says he recognized
Smith early on as a forward thinker who
looked out for his entire department.
Chitty remembers a system Smith devised
for handling Lexus cars being brought in for
their regular service intervals. Instead of having technicians fetch individual parts as the
maintenance was being performed, Smith
arranged to have the parts a technician
would typically need for the service packaged by the dealership in advance.
But there was a hitch: The Lexus parts didn’t
carry bar codes — a lapse that baffles Smith to
this day. So he made sure the box that held
them did.
“The technician would type in his repair
order at the parts counter, grab the box, scan
it, hit enter on the screen and then walk out
with his parts,” says Smith.
A side benefit: Fewer people were needed
in the parts department. When technicians
weren’t fixing cars, they could pack parts kits
for future repairs.
‘The right way’
Smith “was always challenging us at Lexus
to do things better — in the right way,” Chitty said.
Smith is still prodding. Take Principle’s
first new store, Infiniti of Boerne, about 30
miles northwest of Principle’s headquarters,
which is scheduled to open next month.
Infiniti wanted the service advisers stationed alongside the customer waiting
room. Smith argued that they should be on
the shop side.
Why? Service advisers “need to be where
they can see their tech and can communicate,” Smith explains. “To help their efficiency and help drive customer satisfaction and
speed and information back and forth to the
customer, they need to be close to the technicians. It’s wonderful.”
Smith adds: “That is one of the few construction changes that I won the argument
on.”
He also has worked through some rough
patches with BMW.
Within weeks of taking control of the San
Antonio store, Smith says, Principle got a letter from BMW of North America. It said that
the dealership had been underperforming,
and that BMW planned to put another store
in San Antonio. Such a move would have effectively ended Principle’s BMW monopoly
in the seventh-largest U.S. city, and one of
the fastest-growing ones at that.
But in the span of 60 days, BMW of San Antonio went from selling 100 new cars a
month to 200. Within 90 days, it was selling
200 used cars, up from 40.
“Six months later,” Smith recalls, “we got
another letter that says: ‘You are outperforming the market. You are fastest-growing
BMW dealership in the country. We would
SEE SMITH, PAGE 22
Joining Sewell
Smith joined Sewell Automotive in 1989, at
age 24, with a Texas A&M business degree in
hand.
It was an opportune time.
Sewell was about to open one of the first
Lexus stores in the nation and, in 1990, to
publish Customers for Life, his Ten Commandments-like script for creating and
keeping happy consumers.
Upgrades to Principle’s Volvo of San Antonio shop include new lighting and the installation of a
heating/cooling system, which didn’t exist before. Still to come: tile for the floor.
FEBRUARY 2016
PAGE 21
FIXED OPS JOURNAL
The world according to Mark
■ Mark Smith on:
Equal treatment
How you treat a technician in a Lexus
shop — why is that different than how you
would treat them in a Toyota shop? It
should be no different.
Locker rooms
Walk into a technician locker room in a
dealership and you’ll know what the dealer
thinks about his technicians.
Shop environment
We need bright people to work on cars
today. Then we institutionalize them in
this 1940s sweat-shop atmosphere.
Dealership groups that appreciate
technicians
Go look at a Penske shop; go look at a Hendrick shop. They got name plaques. Their
locker rooms are nice. The have events for
their technicians. They get that if that guy
doesn’t work, that race car doesn’t run.
Rewards
What kind of recognition programs do
you have for your techs that match what
you have for your salespeople? Where’s
your appreciation party? We have all those.
And we love it. And our guys love it.
The tendency to “crucify” technicians
for mistakes
SMITH
CONTINUED FROM PAGE 21
like you to move to the [population] center of
San Antonio and be our only dealer [there].’’’
BMW spokesman Kenn Sparks, while not
commenting directly on the details of the exchange, wrote in an email: “Mark is doing a
great job in San Antonio and is one of our
fastest-growing dealerships.”
When the $35 million relocated store
opens in 2017, it will hold 96 service bays.
The technicians’ locker rooms, Smith says,
“will be as nice as any country club locker
room you’ve ever been in.”
The LinkedIn ad seeking a parts director
for Principle’s Infiniti store opened with this
line: “Do you want to work with a company
that is changing the auto industry?”
PAGE 22
FEBRUARY 2016
“How long has he been here? What level
of training has he had?” We ask all those
questions and then we go: “OK. He took off
97 bolts, pulled the motor, waited three
weeks just for the parts to get here — and
had to remember how to put it back together.” Give him a break and move on.
He’s a good guy.
If Principle fails to at least nudge some
change, it won’t be for lack of trying.
Finalists for the parts director job and other positions are screened through an extensive test, administered by Dallas Ph.D. Ron
Trego, at a cost of $200 each. Top executives
are coached by Christine Comaford, a neuroscientist and author of Smart Tribes.
Corporate headquarters two miles south of
the BMW store double as the main campus
of “Principle University.” The company
holds nearly 30 classes for its staff. About a
third are devoted to fixed ops topics, ranging
from “Service consultant basics” to “Elements of high-speed service teams.”
Principle’s annual tab for training is close
to $500,000, “an enormous amount for a
startup,” Smith says.
The bill will likely grow. Principle now em-
Compensation
It’s easy for a good tech today to make onehundred grand a year. Put that in The Wall
Street Journal and hopefully 30 years from
now we’ll see another generation of guys
who want to work on cars and enjoy life.
SEE MARK, PAGE 24
ploys 400 workers. Smith and Kampmann
say they’re shooting for at least 1,000 to gain
cost-saving scale in buying insurance and
other benefits.
In the meantime, Smith — a self-described
“rare bird” dealer with a rich background in
fixed ops — will continue to preach his views
on “unparalleled service.”
For example, he says the needs of a gearhead BMW owner differ from those of someone who inherited a 10-year-old BMW from
a cherished grandmother and wants the
dealership to help make that car last forever.
So those owners should be treated accordingly, not the same.
And if that flies in the face of some factory
scorecard that requires every customer be
processed in a certain amount of time, so be
it. Smith will deal with his lower scores. ■
FIXED OPS JOURNAL
MARK
CONTINUED FROM PAGE 22
Dealers’ reluctance to stock parts on
the shop floor for fear of theft
You ever stay in a hotel? There’s this little
thing called a minibar. There’s a lady or a
man who cleans that room every night and
restocks that minibar. They are keeping up
with $1.50 candy bars and 50-cent Cokes.
Are you not smart enough to keep up with
water pumps, brake pads, air filters, oil filters? It’s the same process. Just stock them
every night and match them back to the
repair orders. You know if you’re off like
that.
SHIRAZ AHMED
Stores of Principle
DEALERSHIP
that I can never get enough of them. We
talk about that a lot. My partner is a female. My vice president of HR is a female.
They change our environment.
Impact of female staffers
Next to a body-shop estimator, toughest
job in our industry. We call them assistant
service managers. We teach them to manage a business. We try to take the monotony out of the job. Their first responsibility
is to make their customer their friend.
Guys act differently in front of girls. Put a
guy in a tie, and he acts even better. It just
changes our behavior. In a way, guys are a
bunch of fraternity kids. Then you stick a
female in there. The language is cleaned
up without you having to say anything.
The place is cleaner. When the flowers
need to be replaced, someone brings it up.
The guys never see the flowers.
Gender
Dirt
Service advisers
I prefer females over males, knowing
2015 FIXED COVERAGE
118%
58%*
72%
Note: 18-month investments reflect facility, equipment spending, July 2014 – Dec. 2015
*Fixed coverage is the percentage of dealership’s total operating expenses covered by gross from parts, service and
collision operations. The BMW figure is calculated differently because dealership profit is tied to sales bonuses.
Material and clothing have advanced,
and we’re still putting technicians in what
looks like a 99 percent polyester trash bag.
It’s miserable.
If one technician is worth $200,000 a
year to you, how are you going to treat
them? That’s really the question that as a
dealer you should look at. It’s how much
parts-and-service gross at a minimum
they’re worth to you.
18-MONTH INVESTMENT
Volvo of San Antonio
$2.2 million
BMW-Mini of San Antonio
$1.6 million
Principle Toyota-Scion (Memphis, Tenn.)
$1.1 million
Infiniti of Boerne (Texas) Opens March 2016
Uniforms
Employee value
From the
Principle
collection: “We
are a company
that reads,”
says Smith.
bother a guy. It drives a woman NUUUTS!
I need that.
Comparing a typical service
manager’s perspective …
“Well, I started off as a porter and became a service adviser. This is the way
we’ve always done it. We’ve got a good
CSI. It ain’t broke.”
… with that manager’s
understanding of his business
He has no clue why he operates it the
way he operates it today and how to advance it from a profitability standpoint, or
a production standpoint or a customer
standpoint.
A little dirt in the bathroom doesn’t
●●●
■ How a pair of Texans founded Principle Auto
M
ark Smith and business partner
Abigail Kampmann met in 2012 at
Harvard Business School’s annual
Young Presidents program. They were both
Texans in their 40s, and among the few classmates in the car business. Before long, each
of their careers would reach a pivot point.
Kampmann’s father’s dealership group
would be split between Kampmann and her
PAGE 24
FEBRUARY 2016
brother. And in early 2014, as a restructuring
Sewell Automotive Cos. was being passed into the hands of another generation, Smith
would be without a job.
Principle Auto was formed with Kampmann’s share of her family business: a Toyota-Scion store in Memphis, Tenn., plus
BMW-Mini of San Antonio and Volvo of San
Antonio, two miles apart just south of the
city’s airport.
Smith is president and COO.
CEO Kampmann focuses on what she calls
the glue that keeps Smith’s operations together: information technology, legal, human resources, marketing.
Each holds 49.5 percent. Kampmann’s
husband, George, is CFO and owns the other
1 percent. ■
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FIXED OPS JOURNAL
“
“We started with the retailers with the highest volume — and the
ones growing the fastest — because they would give us the biggest
bang for the buck.” TOM DOLL, Subaru of America, on the FOX program
Adding capacity to match sales gains
S
urging U.S. sales at Subaru of America Inc. and FCA US over the past
several years have opened up opportunities for their dealerships’
service departments — if those dealerships
can handle the additional business.
Subaru’s U.S. new-vehicle sales are on track
for their eighth straight record and ninth
straight gain this year. Its sales more than
tripled to 582,675 in 2015 from 187,208 in 2007.
During that period, Subaru’s market share
climbed to 3.3 percent from 1.2 percent.
FCA’s sales, led by Jeep, more than doubled to 2,243,907 last year from 931,402 in
2009, the recessionary year when Chrysler
Group declared bankruptcy.
Both companies see meeting the service
needs of all those additional vehicles on the
road as a priority. Take care of those newly
conquested customers, the automakers fig-
ure, and they’ll come back to buy again.
Conversely, give them a poor service experience on the first cars they owned from this
brand, and you’ve blown the chance to make
a second sale.
So both Subaru and FCA’s Mopar operations are urging dealers to add the capacity
to handle many more vehicles than they
have previously. The following two stories
look at those efforts. ■
●●●
■ FCA-brands dealer taps software
tool to gauge future service needs
■ Subaru signs up 40% of dealers
for FOX program, mulls next phase
James B. Treece
Diana T. Kurylko
jtreece@crain.com
dkurylko@crain.com
rett Saslow, dealer principal at Smith Haven Chrysler-JeepDodge-Ram in St. James, N.Y., knew he needed to add service
capacity. He was going to lose a half dozen off-site service
bays when his lease ran out. About two years ago, he began talking
with an architect about adding bays.
In August, Fiat Chrysler sent him a new tool: Mopar Service Capacity Analyzer. Saslow ran the numbers. His conclusion: Add 31
bays, instead of “the low 20s” he had been considering.
The software tool, offered to dealers free by FCA US, uses a dealership’s existing service numbers, along with
registration data that map active and inacSales soar
tive customers within a geographic region,
at FCA
to paint a picture of the dealership’s service
U.S. SALES*
operation.
2009
931,402
The dealer can change inputs — adding
2010 1,085,211
or subtracting technicians, changing techs
to four 10-hour shifts, or adding service
2011 1,369,114
bays — to run a cost-benefit analysis. The
2012 1,651,787
analyzer also comes with a guidebook with
2013 1,800,368
instructions on how to switch to alterna2014 2,090,639
tive work schedules.
2015 2,243,907
“The cool part” about the analyzer, Saslow
B
S
*Chrysler Group domestic
brands plus Fiat,
Alfa Romeo
Source: Automotive News
has been sizable,” with Subaru spending
Data Center
between 25 and 30 percent more than it
expected on the program.
“It is well ahead of where we wanted to be. We started with the retailers with the highest volume — and the ones growing the fastest —
because they would give us the biggest bang for the buck,” Doll said.
Dealers have until March to sign up but “we are not trying to push it
because we feel we have enough coverage,” he said.
Not all dealers will have to participate in FOX, Doll said. Many
dealers in the Sun Belt, where Subaru has been expanding its footprint, have newer stores “that are sized right,” and they don’t need
to expand their service areas, he said.
Updated service areas also are seen as a way to improve Subaru’s
low ratings in customer satisfaction surveys. Subaru was rated below average in last year’s J.D. Power and Associates U.S. Customer
Service Index Study. 䡲
says, is “you could kind of pro-forma out,
based on your sales, reasonable sales
growth, retention” and other factors. “It put
a science to it,” whereas expansions typically involve “a certain
amount of guesstimating.”
Even before getting the analyzer, many FCA dealers were adding
service capacity. In 2015, FCA’s U.S. dealerships added a net 620
service advisers and just more than 2,700 technicians to deal with
the added volume from the automaker’s increased sales. They also
added the equivalent of almost 1,600 service bays, through new
stalls, changes in hours and other steps.
FCA US believes its Chrysler, Dodge, Jeep, Ram and Fiat dealerships need to add 5,000 service technicians, 1,200 service advisers
and about 6,000 service bays by 2018 to keep up with growing consumer demand. 䡲
Larry P. Vellequette contributed to this report.
PAGE 26
FEBRUARY 2016
ubaru of America’s program to increase service capacity 70
percent by 2018 is moving faster than expected, said Tom
Doll, president of Subaru of America.
About 40 percent of Subaru’s U.S. dealers, representing 70 percent of the brand’s annual sales volume, have signed up to expand
their service operations under the Fixed Operations Expansion, or
FOX, program. Subaru next will decide whether to launch phase II
of the FOX program, said Doll, who declined to give a timetable.
Subaru started the program with its large dealers. Those who began projects 18 months to two years ago
will be finishing their expansions soon,
Sales soar
Doll said.
at Subaru
Two years ago, Subaru gave each U.S.
U.S. SALES
dealership a report with recommenda2009
216,652
tions based on projected growth. Subaru
2010
263,820
provides undisclosed financial support
based on how much each store spends on
2011
266,989
service improvements such as additional
2012
336,441
lifts and bays, service technology, shop
2013
424,683
equipment and amenities.
2014
513,693
Doll wouldn’t give a figure for the total
2015
582,675
outlay for the FOX program but said “it
YOUR PROFITABILITY IS
OUR BOTTOM LINE
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dealership’s profit potential.
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FIXED OPS JOURNAL
Consumer survey
Quick service …
…with or without an appointment
An unscientific survey of consumers by
DealerRater.com on behalf of Fixed Ops Journal
found that the vast majority of visitors to
dealerships’ service departments are being met
and served in a timely fashion. The following
breakdowns exclude those respondents who
said they have not had a service visit within the
past 6 months.
But there are minor variations by automaker. The Detroit 3’s dealerships appear
to do the best job of serving unscheduled drive-in customers in a timely fashion,
but that may be because they have more customers arrive without appointments.
RESPONSE
ALL RESPONDENTS
I arrived WITH an appointment
at the allotted time, and was
quickly attended to
57%
38%
5%
I arrived WITHOUT an
appointment and was quickly
attended to
I arrived with or without an
appointment and had to wait
more than 15 minutes*
*Includes respondents who had to wait more than 15 but less
than 30 minutes, and more than 30 minutes. Totals may not
equal 100% due to rounding.
Source: DealerRater.com survey conducted Jan. 15-26; 16,301
respondents
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PAGE 28
FEBRUARY 2016
RESPONSE
% OF RESPONDENTS BY AUTOMAKER
MASS-MARKET BRANDS
DETROIT 3 JAPANESE KOREAN
LUXURY BRANDS
EUROPEAN JAPANESE
I arrived WITH
an appointment
at the allotted time,
and was quickly
attended to.
54%
57%
57%
64%
68%
I arrived WITHOUT
an appointment
and was quickly
attended to.
41%
39%
38%
31%
29%
I arrived WITH
or WITHOUT an
appointment and
had to wait more
than 15 minutes.*
6%
5%
5%
5%
4%
Keith Siddall
Senior Design Engineer
13 years of service
FIXED OPS JOURNAL
“
“You don’t get a job at an office building
and need to bring your own computer,
your own phone and your own pencils.”
SONIC BLAST
STEPHEN HOOKS, Sonic Tools
■ Tool company works with dealers to provide freebies to techs
M
ore debt is the last
thing graduating
service technicians
need after two years
of school and as much as $30,000
in tuition bills.
But before most technicians can
land a good-paying dealership job,
they have to spend $6,000 to
$12,000 on a fully stocked toolbox.
Stephen Hooks, CEO of Sonic
RICHARD
Tools, wants to change that.
Sonic, a new provider of
Fixed Ops Journal
professional mechanics’ tools in
North America, aims to disrupt the
business model used by Mac, Snap-on, Matco and others.
First, Sonic won’t sell tools through franchisees who visit
dealerships in delivery trucks in assigned territories, says
Hooks. Sonic’s tools are ordered online, and replacements are
sent for next-day delivery.
More intriguingly, Sonic thinks dealers can use the promise of free
tools — its tools — to recruit and retain technicians.
“You don’t get a job at an office building and need to bring your
own computer, your own phone and your own pencils. So why are
we putting the burden on young guys trying to make a living with
their hands? Why are we putting them in massive debt?” says Hooks.
Sonic is introducing programs that would enable dealers to buy
discounted tools that can be given to graduating technicians.
“The plan is solidified, but as you could imagine, each dealer or
dealer group is different, so we are able to be flexible within their
organization’s requirements,” says Colby McConnell, Sonic’s head of
marketing.
Several established tool companies offer sizable discounts on
toolboxes to graduating students, but tool costs still reach thousands
of dollars, says Mark Davis, program manager for automotive at
Seminole State College north of Orlando.
Sonic, which set up shop in September in Auburn, Ala., is the North
American branch of Sonic Equipment, of the Netherlands. Sonic’s
tools, mainly made in Taiwan and Germany, carry a lifetime
warranty. Hooks knew that the company would have
to try new tactics to compete in North America.
He’s had some early successes.
Sonic is the official hand tool supplier of the
International Motor Sports Association’s racing
series. The company also supplies tools to the CJ
Wilson group of Mazda stores in Illinois and
California, and to Wilson’s motorcycle
dealerships.
CJ Wilson, dealer principal, says he bit on Sonic’s
plan to help dealers subsidize tools for technicians
because he believes it will help him recruit and retain
technicians.
TRUETT
“Anything you can do to incentivize people to get started and take
that risk to go to technical school in the first place — we can say, hey,
once you get out of there, we can train and set you up with tools and
you have something to keep you around,” Wilson told Fixed Ops
Journal.
General Motors and Ford expect their combined dealerships to be
short at least 15,000 technicians by 2020. Other automakers see
similar shortages at their dealerships.
Between 2014 and 2024, the U.S. Bureau of Labor Statistics
forecasts employment for technicians will grow 5 percent.
With many dealerships now storing tools in wall systems instead of
rolling toolboxes, it makes sense for stores to provide the technicians’
tools. Wilson says he is buying Sonic tools for his stores with wall
systems, and will give tools free to newly graduated technicians. But
he hasn’t yet figured out how the tools will be awarded. For example,
how should his stores cover tools for veteran technicians who already
have their own?
Certain tools are required for each level of certification. “We’ll come
up with several levels,” Wilson said.
Davis thinks the free tool idea is a good one, but
he said that some technicians want mobility, too,
in case a better job offer comes along.
Says Hooks: “We are not trying to change the
world tomorrow. But we are trying to do some
things differently. And we are trying to put
some power in the hands of the techs at the
same time as saving these guys a good bit of
money — money that needs to stay in their
pockets and their families’ pockets.” ■
You may email Richard Truett
at rtruett@crain.com.
FEBRUARY 2016
PAGE 29
FIXED OPS JOURNAL
for
Built
As many as 200 vehicles
per day enter the threelane interior service drive
at Richfield Bloomington
Honda. The dealership
took one year to build and
opened in August.
service
General Manager Tim Carter had one primary goal when he plotted Richfield Bloomington Honda’s
move next door along West 77th Street in suburban Minneapolis: Create more space to fix cars. Carter surveyed
his service advisers, technicians, parts personnel and other staffers to find out what they needed in a new
dealership. While the boundaries were tight — just 2.5 acres of land — imagination ran high. Here’s how their
fixed ops vision played out in a three-story building that opened in August.
● Dealership: Richfield
Bloomington Honda
● Where: Richfield, Minn.,
a Minneapolis suburb
● Full-time employees:
166
● 2015 vehicle sales:
1,896 new; 1,854 used
● Average number of
service appointments:
150-200/day
● Owner: Tom Wood Auto
Group, Indianapolis
Writeup area
Service adviser Dave
Bukstein enters vehicle
information into a computer at
one of 14 service-adviser
stations on the first floor of the
dealership’s service department.
The store processes between
150 and 200 service
appointments daily.
“We’d like to get in that 300
range at some point,” said
Service Manager Jason
Weverka. “The sky’s the limit.”
● Design, construction:
Renier Construction
PHOTOS & TEXT BY TOM WOROBEC
PAGE 32
FEBRUARY 2016
Finish your tour online
● Automotive News TV feature:
autonews.com/
richfieldvideo16
● Why are there heated
floors? Q&A with General
Manager Tim Carter
autonews.com/
timcarterq&a
● Why hand-deliver parts?
Video interview with Carter
autonews.com/
timcartervideo
Inside drive
Tagged vehicles are lined up inside the service department’s redelivery lane.
Two additional inbound lanes are designated for express and regular service.
The service write-up area can house as many as 18 vehicles before they are sent
to the first- or second-floor service department for maintenance or repair. The
flooring is angled for improved drainage on rainy or snowy days. In addition, the
drainage grates are designed to prevent shoes — specifically those with small
heels — from becoming trapped, thus preventing slip-and-fall accidents.
First-floor express
Technician Prince Grear’s bay (left) is on the
service department’s first floor, which is designed
to handle express service, including vehicle
inspections, light-duty maintenance and wheel
alignments.
Richfield Bloomington Honda supplies each of its
33 service technicians with a toolbox (right).
“There’s a lot of glass throughout the whole
facility,” said Carter. “With that transparency to the
client in mind, we want it to always look very
professional and very clean.”
Carter said there is another benefit to the free storage.
“It’s an employee morale booster, because they get to have a nice, bright, shiny
toolbox that maybe otherwise they wouldn’t choose to spend that kind of money on.”
The dealership also supplies entry-level express technicians with tools, which can cost
as much as $5,000.
Weverka, the service manager, said the perk benefits employees, customers and the
dealership.
“They do not have to carry the burden of school and having to go out and get tools, all
at the same time,” he said. “And we know they are using good, quality tools on the
guests’ cars at the same time. So it is win-win for both.”
CONTINUED ON PAGE 34
FEBRUARY 2016
PAGE 33
FIXED OPS JOURNAL
Tire carousel
Parts employees use a computer
keypad to operate a multilevel,
rotating tire carousel. The system
stores as many as 650 tires and is
about half the size of the tire storage
unit at the previous dealership.
“It’s just way more efficient, and a
great usage of square footage,” said
Gordy Ecklund, parts manager.
The dealership sells about 500 tires
a month. Ecklund said the carousel is streamlined and safe.
“Old tire racks used to have guys lifting tires over their head. With this here,
they just rotate the rack down to what’s comfortable for them to lift a heavy tire
on or off the rack.”
Car wash first
The 90-foot-long, indoor car wash on the
first floor of the dealership is the first
destination for any vehicle designated for
service. After the vehicle is washed and dried,
the driver makes
an immediate left
turn into the
service
department and
designated bay.
As a result, the
clean vehicle never
travels outside.
“The technicians benefit because they are
not dealing with a bunch of ice dripping down
on them,” said Carter. “The facility benefits
because a lot of that [ice and snow] is taken
out in the car wash, and you are not dragging
that through the facility.”
Busy spray
Small body-repair work — from
panel scratches to bumper damage
— is handled in this SherwinWilliams spray bay on the second
floor.
“That bay is full pretty much every
day,” said Weverka. “Ideally, we
would like to see that booth run 24
hours a day.”
Weverka and Carter say some
repairs were previously farmed out.
As a result, it could take a day or
more to get the vehicles back to the
dealership. The on-site bay allows
many fixes to be made within
regular hours.
PAGE 34
FEBRUARY 2016
Rustproof, sounddeadening bay
Twin Cities’ weather can be brutal in
winter.
“There’s so much rock and salt and
potholes that break up,” said Carter.
On average, two vehicles per day visit
this second-floor service bay to receive
an undercoating treatment. The service
helps prevent rust and tone down road
noise.
“We have had overwhelming requests
from clients — mainly from a sounddeadening standpoint,” said Carter.
He said a growing number of usedvehicle buyers opt for the undercoating
service.
Garage door
The massive doors
leading in and out of the
service department open
in about one second.
Carter said the doors were
carefully contemplated, as
the average daily high
temperature in Minneapolis in January is 22
degrees.
“We have high-speed doors primarily to keep the
controlled air temperature in,” he said.
However, he also views the doors as effective
tools to keep service traffic moving.
“We’re doing 150, 200 tickets a day, so you
don’t want a slow door going up with that kind
of volume.”
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FIXED OPS JOURNAL
Parking peak
Ramp to rooftop
A two-way parking ramp weaves its way from the
dealership’s ground level to the third-floor, rooftop
parking area. This vehicle exited the second-floor
service department — where technicians handle
reconditioning and warranty work — and is headed
toward the roof until it is delivered to its owner.
“The building is all precast concrete and all the floors
are what we call double tee bridge-deck material, so
you can drive a car on any part of this entire dealership,
on all three levels,” Carter said.
The ramp also leads to a mezzanine level in the
showroom where vehicles are displayed.
“We made an aisle way extra wide going down
through our meeting rooms and our general office to
this mezzanine, and we just drive them right on the
mezzanine,” said Carter. “It’s pretty cool.”
Tom Wood Auto Group
wanted to use every inch of space
at its tall Honda store.
“The more you pay for your land,
the less expensive it calculates out
to go up,” said Carter. “You kind of
maximize the investment of the land
by going up, and that is why we
ended up with parking on the roof.”
There are 140 parking spaces reserved for service and reconditioned
vehicles on the third level of the dealership.
Carter said the 47,000-square-foot, split-level roof deck is an efficient and
safe alternative to storing customers’ vehicles on a leased piece of land
down the street.
“There’s just a whole lot of bad things that can go with that.”
Wheel
reconditioning,
straightening
Many drivers have accidentally
rubbed their ride against a curb.
So the dealership bought a
$100,000 wheel reconditioning
machine that straightens bent
wheels and buffs out scratches.
Only three businesses in the area
provide the service. Carter is
offering to do the work for other
dealers, body shops and
independent repair outlets.
Parts bin
Enter here
Symbols including a green arrow and a red X
direct traffic outside the dealership’s service
department. Sensors automatically open and close the
high-speed doors when a vehicle is entering or
departing the write-up area.
Carter said the layout is vastly superior to the service
entrance at the previous dealership.
“In my old 1986 facility, we had, ‘Pull up and beep
your horn and we’ll open it up.’”
PAGE 36
FEBRUARY 2016
The parts department at
Richfield Bloomington Honda is
spread over four levels — including
two mezzanine areas — to quickly
disperse components to the
dealership’s service technicians.
Carter said the dealership uses
electronic dispatch to ensure a fair
distribution of work among all
technicians.
“And then we use a software program called MPI — multipoint
inspection — that actually tracks the repair order once it is generated,
all the way through parts, to the technician stall, and back to delivery.”
Ecklund said components are hand-delivered to technicians most of
the time. “The longer we can keep the technician in their bay working
— vs. chasing parts — the more efficient we can be for the customer.”
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“
FIXED OPS JOURNAL
“My DNA is service.” TIM CARTER, Richfield Bloomington Honda
Waiting room - and more
Employee lockers
As the new Richfield Bloomington Honda was
being designed, leaders carved out space for male
and female locker rooms.
“We wanted to make sure they had a very clean,
very professional-level experience of just coming
to work and changing into their uniform,” said
Carter.
In addition, a 25-seat employee break room is
filled with modern, stainless steel appliances and
a large-screen TV.
Caroline Stone works on
greeting cards as her 2011 Honda
Odyssey is being repaired.
Tables, chairs, couches, free WiFi and 80-inch TVs are among the
amenities in the service
department’s client lounge. Quiet
rooms and privacy chairs are also
available for those who need an
office away from the office.
This was Stone’s first visit to the
new dealership. “When I walked in, I told the service director, ‘This is like
the Nordstrom of car dealerships,’” she said.
“I’m having to wait another hour-and-a-half for my car because we’re
getting the brakes done. I didn’t expect to have to wait that long. But I
certainly don’t mind, because it is so comfortable,” she added.
Carter said the client experience helps separate his store from others.
“It is very important that customers feel like they can either be part of the
busyness of the dealership or they can be separated from the busyness of
the dealership.”
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PAGE 38
FEBRUARY 2016
FIXED OPS JOURNAL
Saturdays are workdays.
Sundays aren’t sacred.
Consumer demand
and the lure of profit are
testing dealerships.
It’s
about
time
FIXED OPS JOURNAL ILLUSTRATION
SATURDAY
SUNDAY
■ ‘Dealers are still figuring it
out’ as 6th day of service swiftly
becomes commonplace
■ Keeping Jiffy Lube at bay:
A quest for loyalty leaves
Honda store open all week
KATIE KERWIN
KATIE KERWIN
foj@autonews.com
foj@autonews.com
I
W
n 2011, barely half of all new-car dealerships offered Saturday
service, according to the National Automobile Dealers Association’s annual Dealership Workforce Study.
That has changed rapidly. In 2014, 92 percent of dealerships
offered some form of Saturday service, from a quick oil change or
brake job to full repairs, according to the 2015 study.
Adding Saturday hours has created a new set of challenges for
dealerships’ fixed operations. Some service advisers and techs balk
at losing part of their weekend. At least a few defect to nearby dealerships that require them to work weekdays only. Fixed operations
managers may struggle to devise work schedules to fill the extra
hours without damaging morale.
One of the biggest challenges has been simply hiring enough
trained service technicians to staff an additional day, given the
SEE SATURDAY, PAGE 40
hen Hamilton Honda in Hamilton Township, N.J.,
began operating six years ago with a service department that was open seven days a week, there were
plenty of skeptics.
The state’s blue laws forbid dealership sales departments from
doing business on Sundays. Other Honda stores in central New Jersey had decided not to offer service, either, on Sundays.
“In the beginning, people thought it wouldn’t be worth it,” says
Hamilton Honda co-owner Mike Saporito. Now the dealership’s
service bays handle an average of 70 repair orders on a Sunday.
“Most dealers would like to have 80 service orders on an average
weekday,” he says. Hamilton Honda averages 160 orders per day
Monday through Saturday.
Hamilton Honda follows many of the customer-friendly practices
SEE SUNDAY, PAGE 42
FEBRUARY 2016
PAGE 39
“
FIXED OPS JOURNAL
SATURDAY
CONTINUED FROM PAGE 39
shortage of such workers, says NADA Chief
Economist Steven Szakaly. “It’s a problem
Monday through Friday, let alone on Saturday.”
Ted Kraybill, CEO of ESI
Trends in Largo, Fla.,
which conducts the NADA
workforce study, says,
“There’s a learning curve.”
Even among those that
have made the change, he
says, “dealers are still figSzakaly
uring it out.”
So why the sudden shift? Dealers say they are
bowing to consumer demand: People want to
get their vehicles repaired when it’s most convenient for them.
The Internet and online car shopping have
made it more urgent for dealers to stay con-
“Dealers began to realize they were missing out
on revenue opportunities.” TED KRAYBILL, ESI Trends
Sales vs. service
Nationwide, almost all dealership
showrooms were open for business on
Saturdays in 2014. That wasn’t quite
true for service departments.
DEPARTMENT
Service
Sales
OPEN SATURDAYS
92%
99.5%
Source: NADA Dealership Workforce Study 2015
nected with customers after the vehicle purchase, says Szakaly. “There’s a greater emphasis on customer relationships now that
any consumer can buy a vehicle from any
dealer,” he says. Flexible service “creates a
touch point with them.”
There are financial benefits, too. Says Kraybill, “Dealers began to realize they were
missing out on revenue opportunities.” Sat-
urday provides a chance to get more from
their investment in service bays and equipment, especially if the facilities are already in
full use on weekdays.
As new-vehicle sales surged in recent
years, dealers had the opportunity to increase service business, but only if they had
the capacity. Adding weekend hours is far
less expensive than adding bricks and mortar.
Consider the example of Fiat Chrysler Automobiles.
In 2010, when FCA’s Mopar parts unit began
pushing the company’s franchisees to add
Saturday service, it decided to show dealers
how much business they were losing. Mopar
staff took photos of Chryslers, Dodges, Jeeps
and Rams on the hoists at nearby Jiffy Lubes
and other independent chains on Saturdays.
“There were lots of wake-up calls,” says Mopar
SEE SATURDAY, PAGE 41
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PAGE 40
FEBRUARY 2016
FIXED OPS JOURNAL
■ The pain and payoff of Saturday service:
A ‘culture shock for fixed operations’
Express lube
by region
Saturday express lube services
are least common at dealerships
in New England.
REGION
% OPEN ON
SATURDAYS
West South Central
Mountain
South Atlantic
Pacific
East South Central
East North Central
Mid-Atlantic
West North Central
New England
94%
87%
85%
82%
81%
80%
79%
77%
62%
Source: NADA Dealership Workforce
Study 2015
SATURDAY
CONTINUED FROM PAGE 40
CEO Pietro Gorlier.
In addition to Saturday hours, Mopar
urged dealers to add Express Lanes,
where customers can get routine service such as oil changes done in 30 minutes.
Those lanes now account for about 65
percent of Saturday service work at FCA
dealerships, Gorlier says.
Most of those stores also offer more
extensive work, but not in high volume.
The push for Saturday hours was part
of a broader effort to keep people happy enough to come back, an effort that
has boosted service retention at FCA
dealerships — defined as a customer
returning at least once within a year for
nonwarranty work — by 20 percent in
2015 from 2009 levels, Gorlier says.
Today, 98 percent of FCA dealerships
in metro markets offer Saturday service, and 80 percent of the company’s
2,500 stores nationwide do, he says.
The holdouts are mainly in rural areas
where there isn’t enough business to
justify the extra hours.
Industry analysts say that for the
same reason, Saturday service at all
franchises in the U.S. is likely to remain
near the 92 percent level for the foreseeable future. ■
S
aturday is the busiest day of
the week at Beau Townsend
Ford in Vandalia, Ohio, just
north of Dayton. From 7
a.m. to 4 p.m., the dealership averages about 100 repair orders, 8 percent more than on weekdays.
Co-owner Larry Taylor added Saturday service six years ago, and re- Taylor
sults have steadily improved. The additional business and higher utilization of
service facilities boosted fixed operations results in 2015 to the highest level in the 40
years he has been in the business, he says.
But the transition wasn’t easy, Taylor says.
“It was culture shock for fixed operations,
which is used to a 40-hour week.”
Employees weren’t thrilled when the boss
announced the change. But management led
by example.
The dealerships’ fixed operations manager,
service manager and shop foreman all work
every weekend.
Service advisers and technicians work every
other Saturday, in addition to their regular
Monday-through-Friday hours. The service
department can handle more work with less
staff because many of the jobs are basic maintenance that can be done
quickly, Taylor says.
To ease the transition, Taylor gave
the advisers and techs “a bit of a raise
and told them it’s because we appreciate that they’re working an extra
day.” He also added a few perks. “We
feed them all on Saturday,” he says —
doughnuts in the morning and a
takeout lunch of their choosing.
Schedules are adjusted if a service employee has a wedding to attend or a family event
on a Saturday. “I try to be accommodating,”
he says.
Taylor did lose a service adviser a few years
ago to a dealership that doesn’t operate on
Saturday. “But I haven’t lost any techs,” he
says. When it comes to staff retention, he
says, it helps that he pays his most experienced mechanics $27 to $28 an hour.
In fact, while only half the staff is required to
work each Saturday, Taylor says these days a
lot of the other techs come in voluntarily because they know there’s going to be a lot of
work. ■
- Katie Kerwin
●●●
■ Forget the cookie cutter: Flexibility
is essential; more staff helps, too
W
hen Bill Golling opened
the service department
of his Bloomfield Hills,
Mich., dealership on Saturdays in July 2005, he knew his customers would welcome the chance to
get their vehicles repaired on the
weekend.
But Golling was surprised to discov- Golling
er that the initial challenge was letting customers know about it. For a year,
“sometimes on Saturdays we’d just be sitting
around looking at each other,” he recalls. The
dealership rolled out fliers, direct mail and
other advertising to spread the word.
Nowadays, Golling Chrysler-Dodge-JeepRam averages about 120 service jobs on Saturdays, compared with an average of 200 on
weekdays. The main reason for lower volume
is Saturday’s shorter hours of 10 a.m.-3 p.m,
the dealer says. Service bays are open 9 a.m.
to 6 p.m. three days a week and 9 a.m.
to 9 p.m. on Mondays and Thursdays.
On Saturdays, the store serves
many customers who come in without appointments. The dealership’s
three Express Lanes — which handle
quick changes for oil, wipers, batteries and tires — account for just over
half its jobs on Saturdays, slightly
higher than the weekday ratio.
Working Saturdays wasn’t an instant hit
with the store’s service staff. “Most employees don’t like any change,” Golling says. “But
we were able to show them they would work
fewer hours.”
Everyone still works five days a week. One
crew was scheduled to work every third Saturday for seven hours in exchange for a weekday off, when they would have clocked nine
SEE GOLLING, PAGE 42
FEBRUARY 2016
PAGE 41
FIXED OPS JOURNAL
GOLLING
CONTINUED FROM PAGE 41
or more hours.
Golling soon realized he needed
more staff. He eventually added three
service advisers and eight Express Lane
techs.
New employees are hired with the
understanding that they will work
every Saturday and four other days
during the week.
Golling’s service manager, shop foreman and dispatcher take turns overseeing the department on Saturdays.
Some service employees like the flexibility of Saturday hours, Golling says.
For instance, a lot attendant who attends school on Monday and Wednesday is scheduled to work Tuesday and
Thursday through Saturday.
Conversely, the dealership tries to accommodate employees — say, a divorced parent with weekend visitation
rights — for whom Saturday hours are
sometimes a hardship. “It can’t be a
cookie-cutter approach,” says Jeff
Frank, the store’s service director.
Golling’s service business has
grown so much that he’s expanding
the department by 15,000 square feet
and adding two Express Lanes and 10
full-service bays to the existing 25
bays. The dealership retailed 5,300
new vehicles in 2015, making it,
Golling says, Fiat Chrysler’s fifthlargest U.S. outlet. ■
- Katie Kerwin
■ Damned if you do; damned if you don’t a California tale of challenge, persuasion
W
hen South Bay Ford in
Hawthorne, Calif., southeast of
Los Angeles, began offering Saturday service in 1998, the dealership went all out. Rivals offered short hours on
Saturday, and limited staff focused mainly on
oil changes and brake jobs, but not South Bay,
says Bob Cawley, who was then its parts and
service director.
“We were the same business that we were
from Monday through Friday, with full
service and full staff,” he says. “We
opened at 6:30 on Saturday morning
and stayed until we were done” —
sometimes as late as 7 p.m.
The dealership assigned its three
service writers and 15 or so technicians (excluding fleet operations) to
four teams whose schedules rotated
weekly. Each team worked three Sat- Cawley
urdays out of four, in exchange for
some weekdays off, including one three-day
weekend.
When his staff groused, Cawley drew on persuasion skills from his previous 20-year career
as a minister. “I also challenged them: ‘If you
can come up with a better way, I’ll listen,’” he
says. Nobody could.
Eventually, the system gained popularity.
When the dealership dropped the rotating
schedule in 2002 amid a major service department expansion, “a lot of guys were upset
about losing their day off during the week,
when the kids were at school and their wives
were at work,” Cawley says.
But what really stopped the griping was the
high volume of work that poured in on weekends, he says. “The first Saturday we were
open, we did more than 200 [flat-rate] hours,”
better than typical weekday volume, Cawley
recalls. “Cars were lined up around the block,”
thanks to heavy promotion of the new hours.
As the months went on, Saturday became essential to a good service paycheck, he says.
The store didn’t lose Ford techs to
other dealerships because Ford Motor
Co. then was pushing all its stores to
add service hours on Saturday, Cawley
says. That made it hard to escape
working on the weekend.
At Horne Auto Group in Arizona,
where Cawley is now fixed operations
director, all nine dealerships offer Saturday service. But they lean more
heavily toward express service and operate with half the usual weekday staff. One
reason is a shortage of fully certified techs, he
says.
Even so, the group’s three stores in metro
Phoenix always have a fully certified mechanic
on duty. “Customers understand they can
bring their car in on a Saturday and get major
repair or warranty work done” — no advance
scheduling needed, Cawley says. Some rival
stores do service on Saturday by appointment
only, he says. Customers who aren’t on the list
“get angry and drive down the street to us.” ■
- Katie Kerwin
●●●
SUNDAY
CONTINUED FROM PAGE 39
found elsewhere: service greeters, electronic
updates with photos of worn or damaged
parts, multipoint inspections, a car wash and
a waiting room with coffee, food, TV, computers and Wi-Fi. The dealership also offers
free oil changes and unlimited car washes for
all new and used vehicles it sells or leases.
But what sets it apart from the competition
is its commitment to Sunday service hours
and its emphasis on express service as a way
to build customer loyalty.
Only on Sunday
Saporito figures that Sunday is the only day
that some customers can bring their cars in.
PAGE 42
FEBRUARY 2016
If his service department wasn’t open, he
says, “they would go to Pep Boys or Jiffy Lube
and have no reason to ever come back to us.”
The dealership’s service operations are
open 7 a.m. to 9 p.m. on weekdays, 7 a.m. to
6 p.m. on Saturdays and 9 a.m. to 4 p.m. on
Sundays. The store offers express and full
service every day, although it doesn’t advertise or make appointments for full service on
Sunday when it keeps parts and service
staffing minimal. But if an express-service
customer’s vehicle turns out to need added
work — or another customer arrives because
of a vehicle breakdown — a technician is
available to do that.
Saporito says the dealership didn’t have to
SEE SUNDAY, PAGE 44
Hamilton Honda co-owners in their Sunday
best: former NFL player Jessie Armstead, left,
and Mike Saporito.
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FIXED OPS JOURNAL
SUNDAY
CONTINUED FROM PAGE 42
twist the arms of service employees to get
their buy-in because the seven-day schedule
was always part of the new store’s job description.
Hours are flexible and some staffers work a
customized schedule. Some employees work
only Friday through Sunday or Saturday
through Monday.
“We can get really talented people,” he
says, when they’re not compelled to fit into a
rigid schedule.
The dealership has only one Honda rival, a
recent one, in Sunday service in its central
New Jersey zone, says Saporito.
Some rivals tried, but didn’t give the experiment enough time or resources to succeed
and “bailed out,” says Jim Mann, Hamilton
Honda’s fixed operations director.
But it isn’t just about convenient hours. Ex-
PAGE 44
FEBRUARY 2016
“The cornerstone”: Eight of
Hamilton Honda’s 42 service lanes
are dedicated to express service.
press service is “the cornerstone of our business,” says Mann. “We figured people would
try us on for an oil change and if they liked
us, they’d come back.”
Eight of the dealership’s 42 service lanes
are dedicated to express service, which usu-
ally takes less than 30 minutes. The service
department handled 42,715 express repair
orders in 2015, which Honda says was the
highest among its 1,058 U.S. dealerships.
SEE SUNDAY, PAGE 45
FIXED OPS JOURNAL
“
“Every time I touch Sunday, I get lots of outraged letters [from
dealers] telling me Sunday is a day of rest.” PIETRO GORLIER, Mopar
SUNDAY
CONTINUED FROM PAGE 44
Co-owners Saporito and Jessie Armstead, a
former New York Giants and Washington
Redskins linebacker, instituted similar express-service policies when they opened a
Cadillac store in Englewood Cliffs, N.J., in
2012 and a Nissan dealership in Dearborn,
Mich., in 2015. The duo added Antonio
Pierce, another former Giants and Redskins
linebacker, as co-owner of those two stores.
‘The true measure’
While Saporito focuses on the customer
experience, he doesn’t put much stock in
customer satisfaction surveys. “The true
measure is whether the customer comes
back,” he says.
If the service experience sours, loyalty is
lost not only for service, but for repeat purchases, too, he says. As Saporito sees it, a few
years later those customers “would see a TV
commercial for a good deal at another dealership and go there for that deal.”
His aim is to develop “fiercely loyal customers who will feel like they’re cheating on us
if they go to someone else.” Saporito says the
store’s return-to-market loyalty — how often a
customer or another member of that household buys or leases another vehicle from the
same dealer — tops 55 percent, vs. an average
40 percent nationally for Honda stores.
Hamilton Honda, which has 24,000 active
service customers, boasts a 72 percent total
service retention rate, vs. an average 55 percent for Honda dealerships nationwide,
Saporito says.
His numbers are based on Honda’s formula: the percentage of the brand’s vehicles in
operation in a dealership’s district that return to that store for service.
Hamilton Honda retailed 4,270 new and
1,411 used vehicles in 2015 and handled
nearly 84,000 repair orders. Saporito says the
dealership’s service and parts gross sales
jumped 22 percent in 2015 to $8.6 million,
while gross sales from all departments grew
11 percent to $156 million.
‘Creatures of habit’
When he opened Hamilton Honda, Saporito’s conundrum was getting service employees to embrace his goal of increasing gross
profit and repair volume.
“People are creatures of habit,” he says. If
they’re conditioned to focus on hours per job
or how much they can upsell on an order,
A day of rest, sort of
KATIE KERWIN
foj@autonews.com
N
ationwide, 10 percent of dealerships offered Sunday service
in 2014, vs. 92 percent that offered Saturday service, according to data from a National Automobile
Dealers Association study in 2015.
But don’t expect Sunday vehicle service to follow Saturday’s pattern of rapid
growth and widespread adoption, say industry experts.
They’re betting the Sunday
number will grow slowly for the
foreseeable future.
Sunday service at some dealerships amounts mainly to basic
maintenance. Golling BuickGMC in Lake Orion, Mich., for
Gorlier
example, is open for service from
11 a.m. to 3 p.m. on Sunday. But owner Bill
Golling says a customer who brings in a vehicle for major repairs that day will probably have to leave it for service on Monday
and drive home in a loaner car.
At Fiat Chrysler Automobiles, only 25
of 2,500 dealerships open their service
departments on Sunday, says Pietro
Gorlier, head of the Mopar parts and
service brand. Gorlier, who calls Saturday service his “pet project,” says, “If it
were up to me, we’d add Sunday, too,” as
a matter of customer convenience.
“you’re not going to get a good customer experience.”
His solution was to stop basing compensation on those measures. It takes time, training and selective hiring to convince service
staffers that he means it. Eventually they are
won over by the increase in business because customers trust them, he says.
The dealership’s approach surprises some
customers. In general, consumers expect a
service adviser “to try to sell you everything
under the sun,” Saporito says. “If you come
in for an oil change, they’re going to try to
sell you a new engine,” he jokes.
Saporito takes pride in the fact that if a
consumer comes into Hamilton Honda for,
say, a brake job but testing shows it’s unnecessary, the service department will tell the
“Tell me something you cannot do on
a Sunday in the retail business. Explain
to me why the only thing I cannot do on
Sunday is to take my car in for service,”
Gorlier says, “knowing that out of the 37
independent [service] centers surrounding every one of my dealers, at least onethird are open on Sundays.”
He admits his bias in favor of Sunday
service comes in part from his background in the commercial heavyduty truck business. “If you have
a trailer on the road broken and
full of pigs, you’re going to take
care of the customer. Even more
so with buses.”
But he adds, “Every time I touch
Sunday, I get lots of outraged letters [from dealers] telling me Sunday is a day of rest.” Indeed, it is illegal in some states for auto dealerships to
do business on Sunday.
From a business standpoint, it makes
more sense for a dealership to extend
weekday hours to 6 a.m. through midnight and add daylong Saturday service
before considering Sunday operations,
Gorlier says. Realistically, the Mopar chief
says, he’ll be happy if Sunday service
reaches 100 FCA dealerships over the next
three years. ■
James B. Treece contributed to this report.
customer so. If that person was lured by a
discount offer, the dealership will offer a rain
check at the same price to use when new
brakes are needed.
After each service visit, Mann sends an email
and letter — including his phone number and
email address — to the customer. The letter
asks not only whether the customer was happy with the experience, but seeks suggestions
for how the store could do better.
The return letters and calls pour in, and
some suggestions get implemented. There
was a “large cry” from customers who
thought the quality of the free car washes
had gone downhill, Mann says. “I had no
idea it was such a big problem.” In response,
Hamilton Honda built a new $4.6 million car
wash in 2014. ■
FEBRUARY 2016
PAGE 45
FIXED OPS JOURNAL
The
exodus
of techs
SHOP
TALK
Who’s your
hiring rival?
| PAGE 56 |
■ Dealership policies worsen – and can relieve – a shortage of mechanics
TIM MORAN
foj@autonews.com
T
here’s a general consensus in the
industry that there’s a serious
shortage of automotive technicians
able to work on today’s advanced
cars and trucks.
Now, some analysts and experts say that
simply recruiting more technicians won’t
help. Dealerships today are losing technicians too fast for recruitment to make up the
emerging gap, they argue.
“The numbers are staggering,” says Mark
Davis, automotive programs manager at
Seminole State College of Florida. The college’s Associate in Applied Science degree
program is a national curriculum leader that
graduates about 100 technicians a year. There
are Ford- and General Motors-certified tracks,
as well as a generic import-brand track.
Davis says Ford and GM estimate a need
for a total of 15,000 new technicians for their
U.S. dealerships over the next five years.
Davis estimates the North American shortfall at more than 25,000 in that same time period.
“
Who are the techs?
Military background .................5-6%
Female .......................less than 1%
Adviser turnover
Service adviser turnover rates vary by
segment.
SEGMENT
TURNOVER
Luxury brands ..........................30%
Volume brands ........................40%
Source: Carlisle Technician/Service Advisor
Survey, 2014
“I don’t think there are enough training institutions in the U.S. to keep up with the
shortage,” says Davis.
Industry analyst Harry Hollenberg concurs
that the technician shortage is big and unlikely to change soon. Hollenberg is a founding partner at Carlisle & Co., a Concord,
Mass., firm that collects and analyzes data
for automakers.
Carlisle’s most recent report on service
technicians and advisers, released in 2014,
found that an ongoing industry churn sees
20 percent of luxury-brand mechanics and
25 percent of volume-brand mechanics
leave their jobs each year.
They may be leaving to go to another dealership, to an independent shop or even to a
nonautomotive job. Every departure is an
expensive disruption. “From a team perspective, it makes it very hard,” says Hollenberg.
What’s causing this problem? Both Davis
and Hollenberg point to a key part of the
dealership service pipeline: the service adviser system.
“We asked the technicians, ‘What’s the
biggest issue you have?’ The No. 1 issue was
communication with the service adviser,”
says Hollenberg.
Service advisers rarely come from the technical side of automotive maintenance. “A
number of dealers hire their service advisers
based on their selling ability — they were reSEE SHORTAGE, PAGE 48
“We asked the technicians, ‘What’s the biggest issue you have?’
The No. 1 issue was communication with the service adviser.” HARRY HOLLENBERG, CARLISLE & CO.
PAGE 46
FEBRUARY 2016
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FIXED OPS JOURNAL
SHORTAGE
sioned and leave.
“These quick-lube positions were meant to
be your new technician entry-level jobs. You
brought them in on a very low wage and then
promoted them. That was the theory,” says
Hollenberg. In practice, the absence of formal promotion programs has left such techs
stranded and powerless, he says.
CONTINUED FROM PAGE 46
ally good waiters at a restaurant where the
dealer principal had dinner,” says Hollenberg. In the 2014 report, Carlisle found that
most service advisers with 10 or fewer years
of experience came from retail, restaurant,
hotel and hospitality businesses.
Traditional payment for service advisers
compounds the mismatch between them
and technicians, as well. The average service
adviser receives 60 percent of his or her pay
in the form of commission. This can lead to
overselling of maintenance procedures and
overpromising customers on delivery times
for work. Technicians bearing the brunt of
this see little reason for loyalty to a particular
dealership.
Too few, too slowly
Outdated pay schemes
The service adviser issue is just one of the
many barriers to finding enough technicians
that ultimately can be traced to old management styles and outdated compensation
packages, says Davis.
“
“You can’t keep with the
same model you’ve had for 30
years when everything around
you is changing.”
MARK DAVIS, Seminole State College
At the vast majority of dealerships, “everything is based on sales; very little has to do
with fixed ops or service,” he says. While
even a mediocre service department will pay
the majority of a dealer’s overhead, few dealer principals concentrate enough time on rethinking relationships with technicians or
costing out what employee retention is
worth to them, says Davis.
Technicians bring to the dealership their
own tools and, often, certification-level expertise. But once there, they often find their
pay unpredictable because it is based on
workflow scheduling and automakers’ flatrate payments for certain warranty repairs.
“There’ve been lead technicians at dealerships that are actually making less money
now than they were five years ago,” says
Davis.
This can discourage junior technicians and
make them ripe to jump to other industries
where salaries are predictable and benefits
PAGE 48
FEBRUARY 2016
RICHARD TRUETT
The nation’s 16th-largest dealership group
makes a curbside pitch outside Detroit.
are available.
The quick oil change and tire-rack business also has caused problems in employee
retention and promotion. The express lane,
staffed with interns or young technicians
typically being paid $11 per hour, can be an
excellent customer-retention mechanism,
but it also can become a dead end for some
technicians, many of whom become disillu-
Automaker and dealer-association programs to recruit new technicians, whether
military veterans, minorities or women, are
admirable, Davis and Hollenberg agree. But
such programs are not turning out trained
technicians quickly enough and in enough
numbers.
Until the churn factor is fixed, those programs will have little impact on the overall
need for more mechanics, they add.
Remedying the situation will require a new
focus by dealer principals on management
of their shops and some new thinking about
investments in salary and benefits, as well as
promotion mechanisms that will lead to
workplace stability, they say. Only then will
the flow of new technicians begin to fill the
workplace reservoir.
Davis sees an opportunity at this year’s National Automobile Dealers Association convention, March 31-April 3 in Las Vegas.
“There’s got to be some sort of roundtable
discussion with dealer principals [and] fixed
ops and manufacturers’ representatives,”
says Davis. “You can’t keep with the same
model you’ve had for 30 years when everything around you is changing.” ■
Wish list for technicians
U.S. technicians were asked to select 2 changes that would have the biggest impact on
ensuring “quality, efficient repairs.” About a third of the 12,000 respondents identified
communication with service advisers as an area that needs fixing.
Technician-service adviser communication .....33%
Parts issues ................................................29%
Tech training................................................24%
Service information ......................................21%
Diagnostic scan tools ...................................18%
Special tools/equipment ..............................17%
Access to technology (e.g., tablet apps)...........12%
Phone/online tech support............................10%
Field tech support ..........................................8%
New model support ........................................6%
Source: Carlisle Technician Survey, 2014
FIXED OPS JOURNAL
Once upon an Xtime
■ How a solution found a problem of scheduling service appointments
An Xtime app allows consumers to schedule
service appointments on the go.
TIM MORAN
foj@autonews.com
I
n 2003, Neal East, a Silicon Valley entrepreneur, was handed a solution and
told to find the problem it would solve
profitably.
Eventually, he found the right problem:
scheduling auto dealership service appointments. The solution now is known as Xtime
and processes more than 2.5 million dealership service appointments each month. The
company, with ties to 23 automotive brands,
was acquired by Cox Automotive in 2014 for
$325 million.
But to get there, East and his team had to
learn about, and then target, dealerships’
scheduling needs.
East was introduced to the solution by Steve
Jurvetson, a venture capitalist who now is a
board member of Tesla Motors. Jurvetson had
backed a firm that meant to use an e-commerce strategy to sell services rather than
products — an Amazon equivalent for
services. But by 2003, the startup had
burned through $20 million without
gaining a market niche or a steady
income stream.
Jurvetson called in East because of
his success launching information
technology companies in the financial services and utility industries.
Perhaps East could figure out how to
sell service.
Neal East, Xtime president,
targeted dealerships.
PAGE 50
FEBRUARY 2016
Online scheduling software powered by Xtime processes more than 2.5 million service
appointments a month.
“Steve said, ‘The idea was profound and I
don’t know why it’s not working,’” recalls
East, now president of Xtime.
On the road
East went on the road to visit customers of
the failed venture. When he came back to Jurvetson, he knew that the concept was valid
and why the company had failed. Rather than
trying to fit all kinds of services, it needed to
focus on one large, vertically integrated
market.
Most services sell a time-sensitive
product — often, hours that can’t be
regained if they slip by — and in auto dealerships lots of shop time was
going unsold. Responding to a request for proposals from Chrysler,
East realized the enormity of the
scheduling problem.
“We uncovered what
looked to us like
one of the most
enormous greenfields we had ever run across:
an unbelievable space where you had 20,000
dealerships in the U.S. and Canada,” says East.
A second request for help, from Renault,
showed that the problem was international.
When East and his partners asked how automotive brands were solving the unused capacity problem, they were shown proprietary programs that opened a bewildering
array of applications, few of which could talk
to one another.
East, who says he loves cars but declines to
call himself a car guy, set to work. In 2003, the
first beta application rolled out to Chrysler
dealers. By 2005, Xtime was robust enough for
a multibrand version. Today, Xtime is used at
7,000 dealerships worldwide and manages
nearly 3 million appointments a month.
Understanding what East calls the “core
drivers” was critical to that growth. “Ultimately you had to address the customer concerns
SEE XTIME, PAGE 51
FIXED OPS JOURNAL
by
A 17-year Automotive Marketing Leader
“
Viewpoint: East
Want to increase recall traffic
on your Service Lane?
Neal East’s Xtime processes more than 2.5 million
dealership service appointments each month. Some
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䡲 “Service loyalty is the biggest influencer on repurchase
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䡲 “One percent in owner loyalty is worth $7 million to GM.”
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䡲 In the service department: “You have a 50% defection
rate, and 30% unused capacity. One third of every shop
hour never gets sold.”
t 1SPBDUJWFSFDBMMDPNNVOJDBUJPOTCFUXFFOZPVSEFBMFSTIJQBOEJNQBDUFEDVTUPNFS
䡲 “The millennial generation has a completely different
view of the retail experience. They literally want
technology to mediate it.”
XTIME
CONTINUED FROM PAGE 50
over, ‘What do I need? What will it cost? And when can I get it?’” East
says. Xtime developed tools for recommendations, pricing and
availability that could reassure customers and, at the same time,
line up appointments to use service bays efficiently.
Today, Xtime goes beyond scheduling service, with customer
relationship management products and more. A version of Xtime
now lets dealership staffers
anticipate customer needs
“We uncovered what
and matches them with
looked to us like one of service promotions and
coupons.
the most enormous
In 2015, the company introduced an inspection product
greenfields we had
that uses automaker data to
ever run across: an
predict the need for repair
parts based on mileage and
unbelievable space
multipoint inspections. If the
data show that a water pump
where you had 20,000
tends to wear out at a particudealerships in the U.S.
lar point, Xtime’s system will
help prompt technicians to
and Canada.”
alert the customer to get the
NEAL EAST, Xtime
repair done at a convenient
time at a favorable price and
before trouble develops.
The Cox acquisition united Xtime with other tech companies,
and could lead to an expansion into sales from service. It also offered appealing protection from any future industry consolidation.
East, who stayed with Xtime through the acquisition as its president, sees huge potential ahead.
“Our mission was to radically improve the ownership experience — not the sales experience, but the ownership experience,”
he says. ■
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cutting edge Automotive
Service marketing
products and services.”
—Brian Ramphal,
CEO Zonic Design
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“
FEBRUARY 2016
PAGE 51
FIXED OPS JOURNAL
“
“Internally, we’ve changed our [parts]
retention policy to look beyond seven
years. Now, we are seeking to have parts
available through the 12-year mark, and
we are on our way to 15 years.”
FREDERIEK TONEY, Ford
Up to date, not out of date
■ Ford and Toyota offer older replacement parts as the U.S. fleet ages
RICHARD TRUETT
rtruett@crain.com
F
ord and Toyota are broadening
their supply of factory parts to
dealerships’ parts and service departments.
Both automakers told Fixed Ops Journal
they are expanding coverage of factory original replacement parts on two fronts. First,
their available inventory of replacement
parts will expand to cover popular vehicles
up to 15 years old. That’s well beyond the
former cutoff date for coverage.
Second, their inventory of factory original
replacement parts for those older cars and
trucks will include soft items such seat upholstery, weather stripping and interior trim,
in addition to the more traditional hard parts
such as electrical items and body parts.
The efforts reflect a desire to capitalize on
the aging of the American fleet. Consulting
firm IHS says the average age of light vehicles
on the road in the U.S. reached an all-time
high of 11.5 years old at the end of 2014.
“Internally, we’ve changed our [parts] retention policy to look beyond seven years. Now,
we are seeking to have parts available through
the 12-year mark, and we are on our way to 15
years,” says Frederiek Toney, Ford’s vice president of global customer service.
Automakers have long profited from supplying genuine factory parts for rare and collectible older cars. Porsche, for example, recently made available a complete new dash
assembly for the classic 911 built from 1969
to 1975. Mercedes-Benz
offers a large array of
parts for its heritage
vehicles.
But the Toyota and
Ford parts coverage
Toyota’s Swartz:
Parts support
for 20 years?
PAGE 52
FEBRUARY 2016
Older genuine Ford parts will include soft items, such as trim. Below, Ford promotes its own
parts, even spark plugs, over generics.
isn’t just for Mustangs, Supras and other
special-interest cars. High-volume vehicles
such as Camrys, Corollas and F-150s that
clock hundreds of thousands of miles are
among the vehicles that will be covered.
“We maintain parts supply for 15 years beyond end of production,” says Neil Swartz,
Toyota’s general manager of North American parts operations. “Technically, you
could have parts support for 20 years, beyond that if there is demand. We are trying to
make sure customers will have all they parts
they’ll need.”
Toney said Ford’s expanded parts offerings
will be based on the number of vehicles in
use and customer demand.
“We constantly keep track of vehicles on
the road and their mix. When every new
product goes from current production to
past product,” he said, “we make that decision to maintain the [parts] coverage of
those vehicles based on the number in the
marketplace.”
SEE PARTS, PAGE 54
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FIXED OPS JOURNAL
www.hunter.com/automotivenews
Ford’s Frederiek Toney, left, and a dealership staffer review a
vehicle’s service needs on a tablet.
PARTS
CONTINUED FROM PAGE 52
Traditionally, automakers have supported major repairs of vehicles up to about 10 years old with factory-built powertrain components plus fenders, hoods and other body parts that can get damaged in a crash.
But as vehicles age, fewer
drivers visit a dealership for fac“When every new
tory original parts. Instead, less
product goes from
expensive replacement parts,
sourced from auto parts stores
current production
and even scrapyards, are often
to past product, we
used, despite automakers’
warnings about inferior quality.
make that decision
Other automakers are likely to
take similar steps. Indeed, Pietro
to maintain the
Gorlier, CEO of Mopar brand
[parts] coverage of
service, parts and customer care
at Fiat Chrysler, said on the sidethose vehicles based
lines of the Detroit auto show in
early January to expect news of
on the number in
coverage of older parts within a
the marketplace.”
few months.
As Ford’s Toney said: “We
FREDERIEK TONEY, Ford
want to give our customers the
comfort that they can get an
original equipment part that is specifically designed to support
their needs given the age of the vehicle. It’s obviously the right
thing to do.” ■
“
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PAGE 54
FEBRUARY 2016
“
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FIXED OPS JOURNAL
5
Interviews by Richard Truett
minutes with ...
■ Frederiek Toney, vice president,
global Ford Customer Service,
Ford Motor Co.
Information as a competitive advantage in service
We are concerned about improving the overall experience of the
customer. The more information you can put out, the better the results tend to be. Information allows efficiency. Imagine a dealership where, when a customer shows up, we know who they are,
and we are able to use the latest technology to do a vehicle inspection [in] between 30 and 120 seconds.
What Ford dealers want for their fixed-ops departments
Dealers, I think, want to get great product support from Ford. We
are trying to make sure we become easier and easier to do business
with. Here’s an example: We have greatly reduced the number of
parts where we require prior approval to do warranty work. We have
reduced that by about 70 percent. We are empowering the dealers on
a higher level to take care of customers. The time
to complete repairs is a key indicator of customer
satisfaction. And so we are enabling dealers to do
that much faster.
The aluminum-bodied F-150
With so much at stake with the new F-150,
everyone was very concerned. What people
hadn’t realized is that things we couldn’t talk
Ford’s Toney
about, we had been working on for two or three
years. So when we revealed to the dealers our plan, their anxiety
began to come down. And now that we’ve been executing the plan,
it has gone better than we imagined. We have not had any issues
with respect to repairs. We have 650 [Ford-certified] body shops in
our network — dealers and independents — that provide geographic coverage. We provided the training, and they have the right
equipment. I’d say it’s going well.
■ Ed Laukes, vice president of marketing,
performance and guest experience, Toyota
Motor Sales U.S.A.
Getting owners of older Toyotas to come back for service
That’s been a huge initiative for us since July 2014 when we instituted a brand-new owner communication program to work with
customers with their upcoming maintenance at their local dealership. The focus was to make sure we were sending them relevant,
targeted and timely communications. So far it has done exactly
what we thought it would do. We are seeing about a 20 percent response rate.
The recall crisis and service staffing
I don’t think that staffing is impacted by recalls. We have ToyotaCare, which is free maintenance for the first 24 months after a
new Toyota or Scion is sold, and we have ToyotaCare Plus that
adds another two years that a customer can purchase. Driving all
of this service into the service department really
has more of an impact than recalls on staffing
levels, and systems and processes service managers are putting in.
Customers’ parts-and-service needs
Time. No one has enough time. So being efficient at everything you do in the service department, from the appointment process, to the
Toyota’s Laukes
write-up process, to the repair and delivery
process — shrinking that time to make it the most efficient use of
someone’s time is the most important thing we can do. The second
piece is always going to price and value. We’re competing with the
Jiffy Lubes, the Firestones and the Goodyears, so there has to be a
value and price that is true to what the marketplace will bear.
Lessons from the industry’s recalls
What we’ve learned is that we have to work very hard with our
suppliers to make parts available as soon as possible. And that’s
what we do. It is not much different than what we did before, but
now there is heightened effort.
Offering tires in the service department
Dealers see the value in keeping the customer in their stores and
not sending them down to the local tire store. Because if they send
the customer down to the tire store, they become a customer of the
tire store and the odds of the customer coming back to the dealer
for maintenance is reduced. Dealers want to have a one-stop shop.
Everything a customer needs done can be done at a Toyota store.
On competing with nonoriginal body repair parts
We’ve made a concerted effort to educate our dealers, and we have
made some effort, digitally mostly, to educate the consumer about
the fitment of original equipment Ford parts. We also monitor our
competitiveness at all times.
We are very aggressive ensuring that we are the right choice for the
insurers and for the customers. By the time they look at the value
proposition, they are usually surprised at how competitive we are. We
are making a lot of improvements, and we will continue to make sure
we are competitive. ■
On competing with nonoriginal body repair parts
This is really driven by insurance companies. But we are working
with dealers and body shops on a value exposure proposition. I
think we are making some strides with some insurance companies. Also, insurance companies are looking at the situation and
saying to us, “If you can figure out a way to be reasonably competitive — not match what the non-OE part is but be reasonably competitive — in most instances, we are willing to have a talk with you
on offering genuine Toyota parts vs. the aftermarket.” We can see
there is a light on the horizon, but we have a long way to go. ■
FEBRUARY 2016
PAGE 55
FIXED OPS JOURNAL
“
Send suggestions for
future Shop Talks to
foj@autonews.com
SHOP TALK
Looking for service technicians? Who isn’t? We asked fixed-ops managers, those on the front lines of the effort
to find and recruit techs: When it comes to hiring service technicians, who is your biggest competitor?
“
“It is not so much having a competitor
but finding technicians qualified to meet
our standards. It’s easy to find
technicians that will come to work for
you, but our company standards and
training are so much more than most.”
APRIL LAUSCH
Collision center manager, Faulkner BMW, Lancaster, Pa.
“
“Another BMW store. There
were rumors that these guys
always paid a little bit more
than we have. But in recent
months, they’ve been bought
out. A lot of people have
contacted me for positions.”
BILL SMITH
Service director, Long Beach BMW,
Signal Hill, Calif.
“
“As an industry, we are very
slow to change. As a result,
I feel that our biggest
competitor to attracting and
retaining technicians is
ourself.”
CHRIS DIXON
Fixed operations director, Carolina Volvo
in Bluffton, S.C.; Volvo of Savannah (Ga.);
Savannah Mitsubishi; Premier Collision
of Savannah
PAGE 56
FEBRUARY 2016
“
“I have never had a problem hiring service
technicians since I spend a lot of time and
resources mentoring interns from our local high
school automotive programs.”
DALE SNOW
Fixed operations director, Mossy Toyota, San Diego
“
“Ourselves.
We are
paying more
and offering
different
incentives to
prevent turnover. We have
managed as an industry to
not train; now that the
skilled technicians are
beginning to phase out, we
have left ourselves with
nothing left to grow.”
GILLIAN CRUZ
Parts and service director, North County
Hyundai of Carlsbad, Carlsbad, Calif.
Compiled by Jack Walsworth
“
“I would say our biggest
competition is our
surrounding dealers. There
are several other Ford
dealers in our own area.
We’re all vying for the same
technicians, along with
other brands.”
BILL CONDRON
Fixed operations manager,
Sawgrass Ford, Sunrise, Fla.
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FEBRUARY 2016
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