Transmission Repair

I would require 5 full days a year for training. They were the same organization putting on all the training. Of course, On The Job (OJT) Training was also required. The shop paid all expenses.

The days of quick lube places doing just oil changes have passed a long time ago. For example, here's a clip from Jiffy Lube's website. So, my question would be which one (or all) of the services do you plan on doing? How will you go about hiring techs to perform the more difficult services? Then--I looked on your website and you are already offering A LOT OF SERVICES. Auto Save Tire and Service Center

I looked but couldn't find a copyright date on this handbook. While the framework of the apprentice program is really good, the length/compensation of the program could use some serious updating. The AutoCare Apprentice Program is supposed to last 24 months and I think that's too long. Secondly, the pay scale is really outdated. I suggest plugging in your own numbers.

Article date: Sept. 25, 2023 5:30 am ET This is a Wall Street Journal article that you can either read, or click on the "Listen to Article" near the top of the article. It takes 6 minutes. The authors of the article are suggesting the labor shortage is not a short-term issue; it's long-term. Reading/listening to the article will give you the "big picture" view of the problem. It's easy to think that the automotive aftermarket is one of the few industries that have a labor shortage, but it's not. It's all over. Read on... WSJ - Why America Has a Long-Term Labor Crisis, in Six Charts

I agree with you, Joe. I like the Warren Buffet quote, “The best investment you can make is in yourself.” I think the quote not only covers shop owners, but it really covers anybody who believes in continual education. During the first half of my career, I would attend technical training events. The second half of my career, all my training was sales, management, and marketing training. I feel I made the transition from a working boss to a real business person only when I started attending non-technical training. I believe non-technical training is crucial for a business owner. Think about this: For every given market area, there are shops that stay packed with work and there's also shops starving to death. Not coincidentally, there are shops that are the highest in town and shops that are the cheapest in town. The dichotomy of these two extremes can be found in EVERY market area. Based on my experience, the busiest shops also tend to be the highest in price, while the shops starving to death are normally the cheapest. Which type of shop do you want to be like? If you want to be the shop that's always loaded with work, you can't get there from here without investing in sales, management, and marketing training. Great business people and leaders aren't born, they're made with training. Proper training can help solve a multitude of challenges a shop may be going through. Take staffing for example. What top tech wants to go to work for a cheap shop that's starving itself to death? By the same token, how can a shop afford a compensation package that attracts, hires, and retains top talent? I firmly believe that a shop can attract, hire, and retain top talent only by being the very highest priced shop in their area. I don't mean being equal to the highest-priced shop, I mean BEING the sole high-priced leader. A lot of problems can be absorbed by having substantial revenue. Like providing a free rental car during a warranty repair. Or giving a customer all their money back if they are impossible to appease. And the list goes on. When it comes to running the shop, a shop owner can't afford to be a great leader with insufficient revenue. Anybody can be a boss, but not everybody can be a great leader.

Natalie, early in my career I worked at an auto parts store. I would hang out with an older guy, Tom Sitka, of Sitka Transmissions to just watch and learn about transmissions. I wasn't concerned about learning anything other than the technical end of the business. As it turned out, he had some unpaid 941 taxes and the IRS got involved. The unpaid 941 taxes were a mere drop in the bucket when compared to all the 1099s he had the majority of his employees on. In the end, the IRS said he had "misclassified" the majority of his employees. Long story made short, the IRS padlocked his building and later confiscated all the tools and equipment in the building. From that point on, he was doing transmissions by himself at his house. I would help him just to learn but that didn't last as I found a job in a transmission shop.

Listen to this 17:39 conversation between Michael Moore (UAW supporter) and Kaitlan Collins of CNN about the United Auto Workers strike. Compare this conversation to our current tech shortage. I can draw many parallels. Michael Moore On The Importance of the UAW Strike

Young techs have it rough. Their earning power is less -PLUS- they need to make a major investment in tools and diagnostic equipment. Think about it; they need to spend the most when their earning power is the least. Many forget that most young techs are also saddled with the added expense of a growing young family with kids. In our market area of SLC, UT, a fair starting compensation package would be $25/hr. or $1K/wk. And that's just to start. This is 2023 and we have a tech shortage that's not going away on its' own. Providing a healthy work environment is relatively cheap to provide while company benefits are not. The first thing a shop needs to do is get top marketing and sales training. This will give a shop the tools and knowledge necessary to charge top dollar. We aren't going to solve the technician shortage and retention problems paying what we used to. Payroll needs to be no more than 20% of sales, not including benefits. Instead of working the problem from the front end, we need to work the problem from the back end by asking yourself this question: "What do we need to charge to make labor no less than 20% of sales?" Here's a partial view of our 2012 P&L statement showing our cost of labor was running 17.3%, so IT IS possible: 2012 P&L Redacted We need to start thinking like a tech thinks, not so much as a shop owner.

The transmission repair industry has unique needs in that we are short on experienced transmission rebuilders. Hiring an apprentice is merely the starting point to a 10-year learning process. I consider it the equivalent of hiring an apprentice with the goal of ending up with a seasoned ASE Master Auto Technician. What do you do if you need a seasoned ASE Master Auto Technician NOW? That's what it's like trying to hire an experienced transmission rebuilder. Inflation causes everything to go up in price. Things cost more than ever before. Therefore, I believe we as shop owners need to pay more than ever before. A lot of problems can be cured by paying the top wage in any given market area. The last seasoned transmission builder I hired was back in 2015 and we were offering $104K/yr. just to start! I could only imagine what a similar offer would be in today's 2023 dollars. According to the Inflation Calculator, $104K would be $130,230.69 in today's dollars, or $2,504.43/wk. Add to that all the company benefits and the total cost of employment could easily be $200K/yr. or more. All of these numbers are for the SLC, Utah market. Other markets could be higher. There's a lot of advantages to paying more than anybody else. The first thing that comes to mind is if your employee makes a move to another job, they would be taking a substantial pay cut. On the other hand, we need to raise our prices to cover increased payroll costs. A shop simply can't afford to pay top wages without charging top prices. Charging top prices is not possible without going through top sales and marketing training. And so, the training cycle continues. Share your thoughts on paying and charging top dollar. How would you hire a highly experienced tech?

I just heard a Carm Capriotto webinar with Cecil Bullard as the guest. I thought he had a great plan to cure the technician shortage. Here are some of his talking points... Here's the link to the webinar: A Plan To Solve The Technician Shortage Recent surveys and articles in the industry point to the fact that 73% of shops need to hire one or more employees in the next 12 months and that for 85% of those, it would be a technician • As much as 29% of the technicians are over 55 years old, and they are aging out of the industry • Only 15% of our industry is under 35 while 29% is over 55 • Every Automotive Service and Repair Business in North America will move their labor rate up $20 per hour tomorrow. We use $10 of this to increase the pay of every technician and/or mechanic working in our shops immediately. We make it financially appealing to come into our industry by moving the wages up substantially. If every shop (or 90% of the shops) did this, it would change our industry for the better dramatically. We start new technicians that are learning at $25 to $35 an hour or $50K to $70K per year (a real living wage where they can support themselves and buy tools), and we pay veteran A-technicians $45 to $65 per hour or $90K to $130K. We take $5 of the increase and make sure we have a full benefits package. Medical, vacation, dental, a reasonable number of sick days, a good retirement plan, all national holidays off with pay, including Thanksgiving, Christmas and New Year’s, as well as anything that other professional jobs offer. • We take the other $5 of the increase and join a non-profit organization that will market to the mothers and fathers out there (and potential technicians) and let them know that being a technician in a modern shop is a cool job, is financially viable and every bit as professional as becoming a lawyer, doctor, dentist, programmer or professor. • Lastly, every shop owner books an appointment at a college, auto tech school, or high school and ‘volunteers’ their time to talk to the students, teachers, and administrators about our incredible industry.

I used YouTube videos in our shop to replace the boring tasks usually written in a Standard Operating Procedures (SOP) manual. Some of our examples: How to take care of the air compressor. How to service the spray cabinet parts washer. How to service the recirculating solvent parts washer. How to use our electric car pusher. How to use our flywheel grinder. and more… Actually, an entire SOP manual could be done in video instead of a written novel that’s rarely read.

Here's an article out of Ratchet & Wrench magazine on how to figure out what your shop is worth... How The Value Of Your Shop Is Determined

That's one of the big reasons why the Democrats wanted to hire 87,000 new IRS agents! Not reporting income goes on in this country a lot more than we know. It's rampant.

Also, don't forget about Social Security. People who get paid "under the table" are unknowingly clipping themselves out of a lot of S.S. pay later in life. Earlier in my career, I worked for a family who would pay us by check but insisted we cash the paychecks with them. They had a safe in their back office full of cash. They also had a construction company in Chicago that I now suspect took in a lot of cash, but who knows? Now that I'm collecting S.S., I've come to realize they weren't reporting my income on the 941. Thanks to those clowns, I'm now collecting much less S.S. than I should be because they weren't reporting my income. I came to learn that not reporting all income comes back to haunt a person much later in their life.

Here's a 9-month-old video of a Wisconsin shop owner who pays his techs a salary. Moreover, he's thinking about going on an 8-hour day and only 4 days a week. Yet he's going to pay for 40 hours regardless of them working only 32 hours. The video states by 2025, our industry is going to be short of 800K auto technicians by 2025. Take a look at this short 2:14 video below...

I just found this on my Facebook feed. The lady posting this applied for a sales person position that I decided against hiring. But we did become FB friends. Check out her FB post about a synthetic oil change. This is a good way to retain new customers. Take note how this might apply to your operation.

A great article on this topic I just ran across... https://www.ratchetandwrench.com/shop-life/columnists/article/33003161/broski-customers-as-friends

I never paid anybody off the books. I did lose a potential hire once for not paying him off the books because he was collecting unemployment. I agree with you, Joe.

I’ve been following the topic of Artificial Intelligence (A.I. or AI) with great interest. Here’s the results of a recent study… The study was conducted by asking the chatbot to determine a possible diagnosis for 36 standardized "clinical vignettes." The A.I. bot was able to determine a medical diagnosis accurately about 72 percent of the time, based on the patient's symptoms and personal medical information. Sep 4, 2023 Additionally, there is another study going on about AI’s use as an automotive service advisor. LEVERAGING AI WITHIN THE AUTOMOTIVE SERVICE INDUSTRY I feel while all of this, and more, are very interesting topics, the good old fashioned personal contact and conversation can’t be beat when it comes to acquiring and keeping customers.

I've talked about this before. You say an OSHA inspection is rare and I have to agree. In my 40-year career I've never experienced an OSHA inspection. Moreover, I know of only one other shop owner who ever had an OSHA inspection. He claimed a disgruntled ex-employee filed an OSHA complaint, but he wasn't sure. To me, OSHA is like the "Mattress Police". You know those tags on mattresses and pillows that say to not remove under penalty of the law. Removing the tag is a federal offense. Has anybody ever really been charged with pulling the label off? When I went to sell my shop's real estate, the buyers were more worried about ground contamination than anything else. They sent in a hammer-drill rig to take samples to make sure the ground wasn't contaminated with hydrocarbons, as in gas or oil. They did a total of 6 holes, mostly around our oil/water separator tanks in our parking lot. See https://www.youtube.com/shorts/ReSYTfvZ7EU?feature=share Two of the holes were drilled inside the shop near the floor drains. This was done at the buyer's expense of about $5K. The subject of an OSHA inspection never came up before, during, or after the sale. They didn't even ask about a fire inspection, either. Maybe it's because I'm in Utah, I don't know. The nearest area office for an onsite inspection is in Denver, a 7-hour drive away. https://www.osha.gov/contactus/bystate/UT/areaoffice Perhaps OSHA enforcement is more stringent on the east coast. However, I must agree, the if you're selling your shop, getting an OSHA inspection may be the prudent thing to do.

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Whether the customer & vendor lists have value or not is the type of transmission repair business model it has. I know of several shops in my area that also do General Repair (G/R). For instance, did you know that 66% of Aamco's customers were for G/R, not transmissions? Speaking of transmissions, the vast majority of Aamco shops buy remans and DON'T have a rebuilder on site. I believe an Aamco customer list would be of much greater value than the traditional transmission shop, like mine.

We were a transmission specialty repair only; we didn't use CRM at all and perhaps I should have. I don't really know. Because the majority of our customers had us perform major transmission repairs, what else could we sell them? Hindsight being 20/20, perhaps I could have used CRM for future transmission service jobs. (fluid, filter, and a road test looking for codes) But the fact remains we didn't engage former customers with CRM. Unlike the general auto repair industry, our relationship with the customer was more of a transaction-based than like relationship-building which is critical for the G/R industry. When I was trying to sell the shop, our customer list wasn't worth anything. At least the prospective buyers didn't think so. Early in the sales process, I was trying to impress the buyer that our customer list had value, the buyer asked me, "Why would I want a list of people that just had their transmission rebuilt?" OUCH! They surely can drum up the Annual Service Jobs from all of our 1-time customers. So, I left the buyer with the customer and vendor lists without being compensated. They were like me and never followed up with customers.