Fixed Ops Journal - August 2020 - F23

FIXED OPS JOURNAL

DATA

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retail locations.
Several of the big, publicly traded auto retailers say they primarily laid off or furloughed
entry-level technicians and kept senior technicians on the payroll, trying to balance the
urgent need to reduce headcount as business
fell with the need to retain highly sought-after,
experienced technicians. That helped keep
service departments prepared for any emergency and kept experienced technicians loyal.
But it also cut into profits, says Darrel Ferguson, director of performance management for
Xtime Inc., a Cox Automotive company.
Instead of telling customers to "come on in,"
Ferguson says Xtime uses software to help
dealerships schedule service appointments. It
takes into consideration what technician skill
level is required and available, how long the
repair will take, whether the required parts
are on hand or need to be ordered and more.
If work is planned out efficiently, he says the
data show dealerships could continue to afford a mix of entry-level and senior techs.
"Master techs love to change oil, because it's
easy," Ferguson says. "But if I have a minimum-rate type of guy doing an oil change
that's a special with a coupon, I might pay him

Back in service

A look at repair orders at Beck &
Masten Buick-GMC South in Houston
2020

2019

CHANGE

January

2,432

2,361

3.0%

February

2,508

2,101

19.4%

March

2,463

2,405

2.4%

April

1,841

2,440

-24.5%

May

1,913

2,642

-27.6%

June

2,363

2,673

-11.6%

July

2,295

2,780

-17.4%

$3. I relatively break even, or even make a
couple of bucks. But if I pay the $30-per-hour
guy $10 to $12 for the same job, in a lot of cases I'm literally writing off a loss."

Banking on experience
Dan Korte, service director for Serra Traverse City in Michigan, says during the state's
coronavirus shutdown, he eliminated nine
entry-level, quick-lube positions and kept his
senior technicians even though he knew the
hourly expense would be higher.
Some of the quick-lube specialists whose

jobs were eliminated were promoted to apprentice technicians and some found jobs in
other areas of the dealership, he says. In
mid-July, the group had 20 technicians.
Under the supervision of the senior techs,
the group's five apprentices do a lot of the oilchanging, he says. Despite the expense, Korte
prefers having the senior-level technicians do
some of the work the quick-service techs did.
The net result has been higher average labor
hours per repair order, as the senior techs find
more problems that need fixing, he says.
Korte manages service for all of Serra Traverse City's seven brands - Audi, Cadillac,
Nissan, Subaru, Toyota, Volkswagen and Volvo - on three campuses.
"It makes no sense to me that typically you've
got your newest guy working in the quick-service area where they see the most cars," he says.
"In a day, they could see 50 cars while the mainline technician might see eight, or 10 or 12, depending what the workload is."
Korte says early data on the new setup is encouraging. "All of our stores are different, of
course, but the approximate average for May
was 1.9 hours per RO this year and last," he
says. "June was 2.2 hours, 0.2 better than last
year. And July so far is 2.5 hours, up 0.8 over
last year. They are definitely finding some" additional service recommendations. 

Taking initiative helps keep business rolling

s state-mandated shutdowns stemming from the coronavirus pandemic slowed business in the service lane, many fixed ops directors reduced hours and, in some cases, limited appointments to emergencies only.
But when Manny Escalon and Dan Korte,
two franchised dealership service directors in
different parts of the country, saw service and
parts sales data fall off a cliff this spring, they
decided to stay aggressive and pursue business as best they could.
"I'm friends with a lot of GM service directors. I called around to see what people were
doing," says Escalon, service director for Beck
& Masten Buick-GMC South in Houston.
April repair orders at Beck & Masten fell 25
percent from the same time a year earlier. Escalon heard from his peers that some of their
stores were shuttering; others were limiting
hours or running service departments with
only half of their techs.
"I pulled the team together and said, 'How
do we counter this? We need an outbound

program. If we depend on inbound calls,
we're wasting our time.' So that's what we did,"
he told Fixed Ops Journal.

Reaching out
Using software to create automated, outbound phone calls and text messages, Escalon
says the dealership started contacting customers. They reached out to those due for maintenance based on estimated mileage, customers
who "abandoned" recommended service on
previous visits, customers whose OnStar accounts indicated they might have had a "check
engine" warning light and others.
When customers were reluctant to use the
dealership shuttle, Beck & Masten expanded
the distance from the dealership in which it
would pay for ride-hail services from 10 miles
to 15 miles.
"You wouldn't believe how that extra five
miles increased our traffic," Escalon says.
The data show those actions may be paying
off, Escalon says. In May, repair orders were
still down about 28 percent from a year ago. In

June, ROs were down just 12 percent. For the
month of July, the repair order count was
about the same as in the previous month but
gross profit for the department was up from
June.

Service for all
In Michigan, Korte says he couldn't see the
sense in limiting service visits to emergencies
as some of his competitors were doing. He is
service director for Serra Traverse City, which
has Audi, Cadillac, Nissan, Subaru, Toyota,
Volkswagen and Volvo franchises.
"Some places locally weren't doing maintenance or oil changes, only safety-related items
or 'vehicle down' situations," Korte says, even
though the state had declared dealership service essential and that departments could remain open.
"But if it's important enough to the customer to leave home and go out, despite stay-athome orders," Korte says, "it's important
enough for us to do."
- Jim Henry

AUGUST 2020

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Fixed Ops Journal - August 2020

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