Transmission Repair

The problem you guys are experiencing sounds eerily similar to the Right to Repair legislation for the automotive industry we have in our country. (R2R) I've yet to see this issue pop up in any published article. I don't even know if the European Union deals with this issue. Read this article and see if it doesn't sound the same as what the American farmers are dealing with...

Had our industry not had representative lobbyists in D.C., the same thing that happened to the American farmer would have happened to us. Read what happened to the American farmers here:

Before I sold our shop and retired in 2015, I handled ALL of our marketing efforts, which were primarily Pay-Per-Click (PPC) advertising. By a huge margin, Google outperformed Bing. To make a long story short, Google PPC was the only kind of advertising we did. Google PPC advertising wasn't cheap, at about $50K per year. However, it generated an additional $500K in revenue. It cost us about $12/click, and to get an appointment, and we averaged about 3 clicks. Essentially, new customers cost us about $36/ea. Google PPC advertising has changed greatly since then. I tried to help a shop I used to work for and was blown away at how much had changed. It effectively rendered everything I knew and had learned rather useless. What I learned is that it is a field of business that you have constant contact with, and you learn to stay good at it. Like everything else in technology, Google PPC advertising changes often. Overall, it cost us about 10% of the new business revenue that PPC advertising was generating. Not a bad deal, in my view.

Thanks for recommending Carm's podcast on hiring. I learned I really don't know how to conduct a technician interview. Why? Out of all the seminars, trade shows, and classes I've taken over the years, NOT ONE CLASS ever covered the hiring process. I have come to the conclusion that I've been "flying blind" for my entire 40-year career. The closest I've ever come to training in human interaction was with the sales training I've taken. Of the few great hires I have made, I believe it was more due to sheer luck than anything else. The most common challenge shop owners discuss between themselves is finding and hiring a great technician. Like me, few shop owners receive any training in this area. Most larger companies have entire Human Resource (HR) departments to handle recruiting and hiring. Since I retired, have I seen any training in this area, mainly through podcasts. https://gopromotive.com/ and https://hireology.com/ are two podcasts that come to mind, but they were trying to sell themselves as somewhere between a recruitment service and a complete HR department. Of course, today's Carm podcast, but he wasn't trying to sell anything. I'm interested to see what other ASO members' experience is like.

Whenever I saw low productivity, I would try to diagnose the cause. Not only that, I would also ask myself the question, "Is the low productivity within my power to control?" Most of the time it was within my power to control. Occasionally, not. I've never been a fan of the flat-rate system, although that's the main tool I use to measure productivity or the lack thereof. Ironically, the majority of the time, I would cure the problem with an adjustment that's made on the front counter and not out in the shop. What I was able to do was done with changes I made to more accurately written estimates and invoices. Because we were a transmission repair shop, we billed by the job and not by the hour, although we used time as a common reference point. Our estimates and invoices never had the number of hours or how much an hour it was for any particular job. Using that method of billing made it easier for both my techs and myself. Of course, I wouldn't start billing with reckless abandon for fear of pricing ourselves out of the market. I understand that most shops do have an hourly labor rate and bill by the hour. I'm not saying to follow my method because it's not for everybody and every shop. Customers usually have some vague idea as to how long a job takes and how many hours sounds reasonable. Major transmission repair work is not that way in the eyes of the customer. They have no idea and generally just look at the bottom line, including sales tax. Our customers had a written estimate upfront, so there were no surprises. 99% of the time, our estimates were written in stone. Because of this, we rarely had price objections.

I don't think there is only 1 way to calculate a shop's costs, etc. I see shops setting prices based on the prevailing competition more often than any other method. I was a transmission technician at a local Chevrolet dealer in the early '80s. Unknown to me at the time, I received a great job costing lesson that really opened my eyes. A new car dealer has many revenue streams, including parts, new cars, and used cars. Most shops have only 1 or 2 sources of income. I quickly learned that we HAD TO have a higher labor rate than any dealership. It took me at least 6 months of constantly editing our costs because as soon as I thought I was done, I'd discover a new cost that I hadn't thought of before. One killer hidden expense is core handling. We were constantly handling high-dollar transmission, transfer case, or differential cores. For example, when we buy an Allison transmission for a medium-duty GM truck, the core price alone could surpass the price of the Reman unit. GM provided "core management training" for the parts guys. Look at all the cost increases due to supply chain issues and/or inflation. If you think it's bad now, wait until Trump gets in office and starts slapping tariffs on imported parts. We might as well start buying tickets to the circus because that's what will seem like what is happening. Many shops, owners, and managers have a hard time selling for top dollar, but that's what it's going to take to be successful now and beyond. My advice would be to start with a living document (spreadsheet) of all the costs you know. When another new cost pops up, merely add it to the list. Keep doing that to the point where you feel like you've finally captured all your costs. Even then, some other new cost you've never thought of before will surface. Lastly, don't be afraid to be significantly higher on your labor rate than the dealer. Larry in Draper, Utah [email protected]

I just discovered this topic from back in October and I see nobody has made a comment since. I didn't have very much luck with a shop foreman. The main cause, in my opinion, was twofold. If I hired one, right off the bat they wouldn't be productive. If I promoted one of my techs, they had no practical experience running a shop. Eventually, if not sooner, their productivity would also end up as nothing. Either way, I ended up losing one of my best techs. If I ran the shop, it would run the smoothest and most profitable. However, that meant I had to delegate the front counter responsibilities and phone answering. I had my greatest success doing this because it was a lot easier to find someone who fit that job description. I quickly learned from that experience that I had to write a job description for every position. Easier said than done. Over the course of a year, I was constantly editing and updating every job description until I was happy with the employees' outcomes. The old adage about 20/20 vision applies here. Looking back, I should have written a shop owner's job description and included that with all the employees' job descriptions so they would know what to expect from me instead of assuming.

Here's a good article from Ratchet & Wrench on how your shop's numbers compare to other shops in a recent survey. https://www.ratchetandwrench.com/running-a-shop/finance/article/55250653/numbers-how-does-your-shop-compare-in-annual-revenue-gross-and-net-profits

Speaking of shops experiencing an uptick in labor costs, has anybody allowed for bonuses? What about a holiday (Thanksgiving, Christmas, etc.) bonus? What do you consider if and when a bonus is warranted? Has anybody noticed the massive layoffs and businesses that are closing locations? I don't understand why shipping companies are laying off a lot of employees at the busiest time (holidays) of the year.

I would send the customer an email with the subject line "How Did We Do?" asking about choosing our shop. At the bottom of the email, I would provide a link to our Google Reviews page. It worked for me at the time until other rating companies crowded the market. Although unpopular in some parts of the country, Yelp slowly became just as important, if not more so.

Here's a list of the top 5 must-read business-related books as recommended by Elon Musk... Elon Musk's Top 5 Book Recommendations 🚀 We dive into the world of Elon Musk book recommendations, exploring the titles that have shaped the mind of one of the most innovative thinkers of our time. From science fiction to business strategy, these books offer a glimpse into the diverse interests and profound knowledge that drive Musk's success. Join us as we review the 5 books recommended by Elon Musk, uncovering the wisdom and inspiration behind each choice. 🔹 Book Recommendations: 1. The Hitchhiker's Guide to the Galaxy https://amzn.to/3WJfMCU 2. Structures: Or Why Things Don't Fall Down: https://amzn.to/3LJLNVp 3. Benjamin Franklin: An American Life: https://amzn.to/3ykEHU0 4. Superintelligence: Paths, Dangers, Strategies: https://amzn.to/3Ae69TT 5. Zero to One: https://amzn.to/3YlN0cU Video link... 4:14

Here's Carm Capriotti's list of business books he recommends for shop owners... https://remarkableresults.biz/books/

WARNING: Long post. I think ALL OF US have made bad hiring mistakes at least once. We are in a unique specialty industry of automatic transmission repair that isn't quite like General Repair. (GR) In fact, we don't do GR work at all. I have made wrong hiring mistakes more than once. I can tell several stories when comes to making a bad hire, but I will tell only the most egregious. I hired a transmission rebuilder from out of state. He was currently working for a transmission shop that was about 4-5 hours from us. I first did a couple of phone interviews for starters. He sounded very confident and knowledgeable over the phone. I set up the first face-to-face interview for a Saturday because we, as well as his current employer, were closed on Saturday and Sunday. The things that stood out for me were his demeanor, attitude, and knowledge of the transmission industry. Long story short, I ultimately decided to hire him. He also claimed that he could build any type of transmission that was set in front of him. Because we are in Utah, we have some car makes that are very common in our market, but not so much in other markets. One of those car makes that is very popular with us is the Honda/Acuras. Hardly a week goes by without at least one Honda transmission job. The first hint that I may have made a bad hiring decision was the very first Honda transmission he built didn't work. We couldn't even take it on a road test. We call those types of jobs "no-goes." He took longer to rebuild a transmission than most, but the rest of the transmissions for the week all worked OK. In the following weeks, most of his transmissions worked OK as well... except Hondas. The second month of his employment, it was all OK except for Hondas. The 3rd month he worked, we had 2 transmission jobs come back the same week for warranty repairs; they were Hondas as well. By this time, I had more than enough no-goes and comebacks to make me suspicious. I finally started keeping myself in the building room to see exactly what he was doing. I observed him making more than a few rookie mistakes. I finally was able to observe him building a Honda transmission and I couldn't believe my eyes. I equate Honda transmissions to being built like a Swiss watch. Hondas have a very narrow window for clearances. Domestic transmissions have, on average, a very wide window for clearances. Domestic transmission clearances are in the range of .005"-.080". However, Hondas' have most clearances in the range of .003"-.009". It all came to a head when on a Monday where we had 3 of his transmissions come back for warranty repairs, and they were 2 Hondas and 1 Acura. (Nearly identical transmissions except Acuras transmissions run counter-clockwise and Hondas run clockwise.) By this time, I was suspicious enough to call the other transmission shop he used to work for. He claimed to have worked there 4 years. That fact was indeed true, but every other thing he told me during the hiring process was bogus. To me, there's a big difference between embellishing facts and telling a lie. I asked the other shop if they had any problems with his Honda/Acura. The shop owner informed me that they only buy used or reman when it came to the Honda/Acura car makes. I also learned that during the 4 years he worked there I discovered his job was as a parts guy, not a transmission builder. Holy crap, I swallowed all his lies hook, line, & sinker! The following week, I spent all my time in the building room to keep an eye on our new transmission builder. As if making a bad hire wasn't enough, I gave him a 2-week notice of his employment termination to give him time to find a new job. During that period of time, he did his level best to sabotage our shop. Once I was made aware, I fired him immediately. I learned that he had put our tractor funnel used in our waste oil barrels, in the new clean solvent barrel, contaminating all the clean solvent. Back in the day, most of the technical information was on a CD that I kept in our office after downloading all the information onto our machine's hard drive. As his last act of sabotage, he re-formatted the shop's hard drive. Lucky for me, all I had to do was to download all the technical information from the CDs to the hard drive.