Growing your own technicians in service or the body shop has become a necessity, greater than ever before many managers are affirming. Government stats state that some 125,000 additional auto technicians per year will be needed now and in the near future, while tech schools are generally struggling with ever-lowering enrollment. Vehicles in general, as well as repairing and maintaining a car or truck, just aren’t as interesting as they once were. And other skill options available for young people to attain are quite vast, sans the “dealer tech’s” never-ending investment in costly tools, the dirt, grease, heat, cold, unfixable engineering, warranty issues, and the penchant for becoming a victim of poorly skilled support personnel including service and general managers and, in some cases (not you of course).
Perhaps Old Is New
Team production in service and the body shop is the grouping of various skilled technicians who work together in a team environment sharing common goals of output, quality standards, cleanliness, organization, attitude, and problem-solving. I first became familiar with this concept when I joined a European dealership as a team technician apprentice in the late 60’s. Previously, I worked as a gas pump jockey and maintenance tech in a Sunoco service station during high school, when I wasn’t fixing a piece of equipment on my uncle’s farm, where I grew up. Now I was suddenly surrounded with technicians who had knowledge levels I only dreamed about, and they wanted me to be one of them – manna from heaven.
As a result of this fortunate choice, I was able to achieve master tech status in just over two years because I was coached day in and day out (including Saturday mornings) by these European masters who shared their knowledge endlessly. Because we were sharing one flag ticket, everyone benefited by every team member contributing successfully. When I sadly left the dealership for another college (I could afford), I opened my own shop in an empty part of a working service station at the age of 21 (trial by fire). I practiced the same management approach I was taught with my own techs as my shop grew, and the guys learned from me and each other as we tackled common goals. It was a pleasure every day knowing no one was alone on problem-solving or needed help of any kind. I was also lucky to have hired no whiners, boozers, or lazy bozos. Racing together also facilitated our bonding as a unit.
Five years later I was helping advance a team program for Datsun at a training company I had joined. When I began Net Profit, one of the goals was to install team organizations in service and body shop operations of dealerships, independent shops, or even assembly lines. Many operators began adopting this thinking successfully as it maxed out stall utilization, but over time, a number of individuals and companies began installing the team concept, only to have it fail shortly afterward because of lack of thorough preparation and intimate knowledge of the system details. An install would sometimes take me six months or more to complete, while some were installing in a couple weeks. Obviously, there was a lack of understanding of the essential steps necessary to guarantee complete success. Unfortunately, these flops led many in the industry to believe that tech teams were not something to pursue, and teams, especially when revenue-sharing was included, inherited a negative reputation.
Team Success
Yet, team installs I personally completed 20 and 30+ years ago are still in place, and the idea of working and growing together has become cultural there. Recently, I did a national webinar about tech recruiting and training, and afterward, a long-time quite successful fixed operations director, Mr. Keith Britts, who drives a large Florida dealer organization, sent me a note asking why I didn’t talk about the teams during this presentation. He reminded me that he was very successful in utilizing teams and that he just did “what I had taught him.” In fact, he became knowledgeable enough to set up his own team systems in service and the body shop successfully in newly purchased dealerships as his group grew over many years!
That got me to thinking about sharing my knowledge of the team program in my column, and even more consideration that with the shortage of technicians and related technical knowledge, we probably need to rethink our common current individual production approaches more than ever, especially since most shops don’t employ a go-to highly skilled foreman of any sort. And today unlike years ago, a tech looking for guidance from a writer might as well go to the porter for help.
In the beginning, I tracked the idea of techs working together in limited stall space to Europe after WWII. I was told that most of the garages facilities were leveled or in poor shape at that time. Mechanics (meccanico-Italian, mechaniker-German, mecanicien-French, mechanik-Polish & Slovak) obviously needed to get back to work in automotive commerce, and there were far fewer garage work stalls then people ready occupy them. This was the case for body shop repairs and painting also. As a result, everyone learned to labor together, sometimes two and three fixing one vehicle and often as many as five workers sharing three stalls. This required that there be one competent supervisor (foreman and/or parent) for the group to provide technical direction, dispatch work, manage efforts, quality control as work progressed, and to determine who would do what operations and when based on their current skills. There also was a shortage of tools and equipment so sharing was necessary requiring a much-planned approach. Of course, ensuring the right players were staffed on the team, and keeping attitudes in check was a vital part of the foreman’s (“team leader” to some) role too.
Necessity Creates Opportunity
Mechanics and offspring who immigrated to the U.S. brought this thinking with them, and particularly in the European service facilities (franchises and independent shops) working closely together was comfortable and profitable. By sharing a common goal of producing paid flat rate hours (sometimes called work hours) sharing knowledge was expected so that everyone won. The most difficult repairs and diagnostics taking more clock hours than paid work hours, performed by the most skilled mechanics, was rewarded by the lesser skilled ones producing the easier work hours quickly. At the same time, the apprentices and semi-skilled mechanics got the benefit of extensive on-the-job training and the use of tools they would not receive otherwise. As master mechanics aged and slowed down a bit, younger, less skilled ones were able, with guidance, to do skilled work to a point and the learning was intensive. A high-impact feature was the stabilization of pay created by this environment – the constant tech income ups and down were virtually eliminated. Today, any competent technician will explain that “learning by doing” was more important than “book learning” to the development of their technical prowess. Some peeps can pass any test and still not be able to fix much (called CFS among many of us).
The idea of working together with common goals was comfortable for many immigrating mechanics and they expected to work in the same situation here. Since every stall carries a multitude of expenses to exist, producing as much income as possible in each one is a winner for paying those bills. It’s common to find in today’s dealerships an average expense per month for each stall in the $10,000 area (Personnel-Semi-fixed-Fixed Expenses / Useable Stalls), which translates to the need to generate some $13,000 to $16,000 in labor sales per month per stall to break even, depending on the labor gross profit margin. An example here would be 167 flat rate hours at $90 overall effective labor rate to cover $15,000 in necessary labor sales – that’s over 100% output for a typical tech working 160 clock hours in a month, just to pay the bills for the cement. Give the tech two or three stalls and the expense to cover doubles and triples! This is often a huge challenge in a body shop where two and three stalls per metal tech is common, along with the normal pathetic labor rates.
Your Turn Buckaroo
One can easily see why some service and body shop operations generate very little or no profit. Coupling this with the shortage of competent technicians, and even marginally competent maintenance personnel, the strategy of working together with common goals makes a lot of sense for this situation. In Part Two, I will expound on how the team program functions, the bits and pieces, its many benefits, and what it takes to install it efficiently and correctly.
In the meantime, you might want to calculate some interesting facts about your own service or body shop stall expenses to see what it takes to overcome them and to make a reasonable profit. I developed an eye-opening (likely) Excel workbook you can enter some basic data into, and also experiment with making some changes in expenses, labor rates, margins, and staffing levels to see how it affects stall expenses, tech output needs, staffing, and flat rate hour goals. Put on the subject line “Calculating Expense Per Stall Is For
Me Rollo!” and send to Ed@NetProfitGroup.com.
