Is it Time for Repair Shops to Specialize?

[Joe Marconi]

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[Transmission Repair]

When it comes to "All Makes, All Models" we were already pretty much doing that with transmissions.  It's easier to say that because all we did was transmissions.  However, there were half-a-dozen or so of certain Euros we would still do although we didn't like the risk level.  We just priced those higher, about the price of the dealer, to do those "unfavorite" units.  I remember a Porsche Cayenne that had a wiped out transmission and a rear driveline no driveline shop would touch.  We had to special order the rear driveline (w/3 U-Joints and a carrier bearing) from the dealer for $1,500, our cost.  Long story made short, the total bill ended up being around $9K.  If the customer would have given me a price objection, I would have told him to take to whomever you want.  I guess the best way I could put it is, "We'll work on any make or model...  for a price."

[Transmission Repair]

On 6/11/2022 at 5:15 AM, Joe Marconi said:

With so many different models on the roads these days and the challenges of obtaining all the necessary training, tools, and technical information, should auto repair shops consider narrowing their focus on fewer makes and models?  

Is "All Makes, All Models" really achievable today? 

 

Work Specialization

I recently shot a 6-minute video about doing transmission work on highly modified cars and trucks.  After I posted it, I suddenly realized, that I was kind of specializing without even realizing it.

 

When I was younger, I really liked high-performance hot rod-type jobs.  The more “over the top” they were, the more I loved it.  As the years went by, I slowly grew tired of being on both the transmission job itself AND the front counter.  That’s a hard way to make a living.  There would be times when I would announce to everybody in the shop, “Once I get this transmission done, I’m through with building!”  I must have made that statement at least a dozen times as I would inevitably go back to the bench and build one or more units.  

 

Eventually, I did finally quit working on transmissions and/or the installation or reprogramming.  I was spending more and more time in the office and trying to learn how to run the business, and not the shop.  I had employees handle the work in the shop.  I remember the Michael Gerber book that said “Don’t work IN your business, work ON your business.  That was my “Ah-Ha!” moment.  I started crunching numbers, counting jobs, doing job costing, and all manner of learning “the business” of transmission repair.

 

After a couple of years, I was able to see my business in a whole different light.  All of these jacked-up, high-performance, and highly modified vehicles were taking twice as long as other plain-vanilla jobs.  Wow.  That was a real eye-opener.  In my mind, I should have charged 2X on the labor.  Later, to my dismay, is eventually learned that those same jobs had 3X the number of warranty claims.  Sometimes warranty claims were of a minor nature and sometimes they had to be towed back to the shop.  Either way or anywhere in between, warranties on those highly modified vehicles were 3 times that of stock cars and trucks.

 

What I eventually learned was that 2X more labor X 3X more warranty claims meant I should charge 6X the price of a pure stock normal job.  I remember the job that the 6X price came through so clearly to me.  The job was a 1969 Pontiac GTO with a 4-speed Muncie transmission.  The customer wanted me to convert it over to a 700R4 automatic overdrive transmission and everything had to work on it.  Shifter, TV cable, and oh yes, the speedometer had to read dead-on with +or- 2%.  Long story made short, I undercharged the guy because, at that point in my career, I didn’t have sufficient sales skills to sell a job a 6X the price.

 

There’s a transmission shop just outside of Denver that specializes in stuff like that and his prices are through the roof.  The owner gave me a tour of the shop and I got to see his operation.  I thoroughly enjoyed the tour of ATS transmissions.  It’s been over 20 years, but I still remember it.  A common transmission swap then, as well as today, is to take out the factory Cummins diesel transmission in a Dodge truck and install an Allison.  To give you an idea of how that owner has come, check out this price range for supplying everything you need for that swap.  It doesn’t include the R&R labor; you have to do that yourself.

Notice the price ranges from $4,650 to a whopping $17,759.34!!!

The ATS became my “ticket” to higher prices on transmission jobs that involved ANYTHING that wasn’t stock.  I never said “no” to a job.  I would price the highly modified jobs from anywhere starting at 2X labor to as high as 4X.  I never did develop the nerve to charge 5X or 6X, but I definitely learned to charge more.

 

On occasion, a customer would say “no” to the price and would go elsewhere.  By that time in my career, we had a lot more work than we could handle, so losing a job was no big deal.  A side benefit of charging more is that our productivity went up and our warranty claims went down.

 

Even with only rebuilding the same transmission that came out of the truck, it too was expensive.  Take a GM Duramax with an Allison transmission.  Without R&R labor or a torque converter, an Allison transmission bench job would run anywhere from $5,363.95 to $10,611.45!  Fluid, converter, and installation labor were NOT included.

 

So, in a round-about way, we were indeed specializing in what we did without even knowing it.  We simply used price to “throttle” what we did.

[vbtoytech]

Beyond specializing on makes and models, I find it difficult to work on pre OBDII cars in general.  I wasn't around back then.

[Joe Marconi]

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