Transmission Repair

This is a story about a lady, Jesse Jackson, and her Mango Automotive's mission to build a network and reshape the industry. From February 2023 Ratchet and Wrench magazine. A very good article. If you read the article, Jesse Jackson comes from a California tech company background. She acquires shops from shop owners who are retirement age but have either no, or little, retirement plans/funds. The shop also needs to have at least 7 bays and at least $1 million in revenue. She then converts the shops to the Mango Automotive name which is big on EV repairs and maintenance. https://www.ratchetandwrench.com/articles/13061-acquired-with-taste

I've talked about this before, but it does bear repeating. Does your shop work on European vehicles? Here’s some validated facts. Did you know if you added up all European vehicle makes and models they would add up to less than 10% of the U.S. vehicle population. When I first saw this in the Automotive News Data Center (https://www.autonews.com/data-lists) I couldn’t believe it. It seemed like I personally saw more European vehicles than 10%. After seeing the same results year after year I finally determined why that was. It’s because European vehicles are head-turners. You sit up and take notice. However, over 90% of the vehicles on the road are mere traffic to me and most people. These percentages are for the entire U.S. Some parts of the country have a higher or lower percentage. Where I live, in Utah, the number is 6%. However in my suburb of SLC, Draper, the number is 8%. I don’t have the numbers for other states. Do you realize if you thought servicing European vehicles was too much of a hassle worth pursuing, and eliminated Euros from your job mix, you would still have over 90% of the market? Food for thought. Rethink your business model. If you are in or near a big city on the coast, you may not want to eliminate Euros. They seem to be over 10% in those locations. However, we did not turn Euros completely away. We are a transmission repair facility and many specialized tools we buy are for a 1 or 2-time use only. We have to pass those costs on and is why we price European units so high when compared to domestic transmissions. Because of that, we did few European vehicles. And without exception, they were always a hassle. Think about it and determine if European vehicles can fit into your business model.

John Kelly of Weber State University and I are personal friends. IMHO, he had the best transmission and EV training in the nation. He lives and works about 50 miles north of me. He recently traded in his Chevy Bolt for a Tesla and has A LOT of EVs in his transmission lab. We both share our LinkedIn profiles and posts. Here is a great opportunity to get involved in online EV training for a certificate in EVs. https://www.linkedin.com/feed/update/urn:li:share:7027713973886095360/

Most insurance companies consider Teslas unrepairable... except the Tesla insurance company.

Here is a course taught by my friend, John Kelly of Weber State University. He has an incredible number of qualifications and credentials. https://www.weber.edu/automotive/j_kelly.html He regularly teaches transmissions but for the last 2 years, most of his videos are for EVs, Hybrid, and Plug-In Hybrids. https://continue.weber.edu/professional/programs/evtraining/ Here's the shop tour... https://youtu.be/vHMuwzBM-4A Here's his YouTube channel... https://www.youtube.com/@WeberAuto/videos 2 of his 3 courses are online. Only the Phase 3 course is in-person. This should be able to get anybody certified in EVs.

I asked ChatGPT the following question: "How should an automotive shop market & advertise itself for Electric Vehicles?" =============The Answer:============== An automotive shop can market and advertise itself for electric vehicles by incorporating the following strategies: Highlight expertise: Market the shop's experience and expertise in working with electric vehicles, highlighting certifications and training of technicians. Offer EV-specific services: Offer services specifically designed for electric vehicles, such as battery maintenance, charging system repair, and software updates. Use digital channels: Utilize digital marketing channels, such as a website, social media, and online advertising to reach a wider audience and educate them about electric vehicles and the services offered. Partner with EV manufacturers and dealerships: Establish partnerships with electric vehicle manufacturers and dealerships to offer services and to get referrals. Promote sustainability: Highlight the eco-friendly aspect of electric vehicles and the shop's commitment to sustainability. Host events and workshops: Organize events and workshops to educate customers about electric vehicles and demonstrate the shop's expertise and services. Leverage customer reviews: Encourage customers to leave reviews and share their positive experiences to build credibility and attract new customers. My comment.>>> Isn't ChatGPT really great? <<< 12:52

The vast majority of EV owners or soon-to-be EV owners owned an ICE vehicle beforehand. I think planting the seeds in the existing customer base through marketing (direct mail, online, etc.) would be planting seeds for an existing shop's future. Online PPC advertising with new keywords referring to EV chargers would be highly beneficial. When people search online to get an EV charger installed, I would want to be at the top of the search results page. That is the reason they would call us for charger installation. To break it down, the first phase would include existing customers. The second phase would be new EV owners. Not every customer is destined to be an EV owner in the future. We just need to be out there, in front, of those destined to be EV owners in the future.

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That's a cautious, but pessimistic, viewpoint Ryan. It borders on fear-mongering. That is easily taken care of in a carefully worded contract. To me, the pros far outweigh the cons. It's planning for our industry's future. I'm sure there will be EV-only repair shops in the future. By letting our customer base know we do EV service & maintenance, we get a toe-hold in their collective minds with the charger installation. Until EVs start showing up on the phone or in our bays, installing chargers in the customer's garage is the best way to capture the mind of the EV consumer beforehand. Can you think of a better way?

Ryan, Thanks for the reply. If $1,500 to $2,500 is the going rate to install an EV charger setup in somebody's garage, so be it. While that cost will vary with different markets, I believe we should charge the customary and prevailing fee for each market area. There's risk in everything we do and I wouldn't expect any different with an EV charger installation. However, if we were to sub it out to an electrical subcontractor, they should have liability insurance. Again, I want to thank you for your thoughtful reply.

Another way to get into the minds of EV owners is to have dedicated EV parking with a charger. What better way to stay in Top Of Mind Awareness (TOMA) for your shop? I would classify any money spent on this as Marketing/Promotional. ChargePoint makes a great case for this in their booklet below. The ChargePoint charging system can take payments through your phone or card. According to the information ChargePoint provides, a 3-hour charging session runs around $1.00 or .33 cents an hour.

The EV market will change what we do for a living, but servicing vehicles will never go away. Many of the services we perform on ICE vehicles will hold true for the EVs as well. Conversely, there will be new services and new opportunities that the EV market will bring. I believe that it’s too early to gear-up for many EV-specific services such as battery pack replacement. However, I’ve come to the conclusion that there is a way to get our “foot in the door” with new EV owners. We need to heavily market and advertise residential EV charger installation. This will require, of course, an electrician license. However, there are many levels of electrician licenses and will vary state to state. In my state of Utah, there are 5 different levels of an electrical licenses: Apprentice Journeyman Electrician Master Electrician Residential Journeyman Electrician Residential Master Electrician There are strict requirements at every level of licensing. To apply for the lowest level of residential license, you need: Completion of a 2-year (288 classroom hours) electrical apprenticeship education program. 4,000 hours as a licensed Apprentice Electrican working under the supervision of a licensed Journeyman or Master Electrician. Pass the Residential Journeyman Electrician Code, Theory, and Practice exams. It simply wouldn’t be feasible to have a current employee get a Residential Journeyman Electrician license. A better way would be to enter into an agreement with a local residential electrical company to wire and install the EV charger. At an average union wage of $69/hr. for a typical 8-hour install would work out to $552. A shop could calculate the markup (if any) needed. $1,000, to the customer, wouldn’t be unreasonable. This way, a shop would be getting their “foot in the door” in the mind of the new EV owner’s vehicle. A shop’s information could be put on a sticker for the charger and/or charging cable end to keep the shop at TOMA. What would you suggest to start to “gear up” in the mind of the new EV owners?

To follow up what Joe is saying, here's NAPA's AutoCare Apprentice Program Handbook. This handbook codifies NAPA's apprentice program which can be used as a starting point for shops who wish to have their own Apprentice Program. 1-AutoCare-Apprentice-Program-Handbooks (1).pdf

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The unemployment rate in the U.S. is a misleading figure. A more accurate indicator of the American workforce would be the labor force participation rate. The labor force participation rate is the percentage of the civilian noninstitutional population 16 years and older that is working or actively looking for work. It is an important labor market measure because it represents the relative amount of labor resources available for the production of goods and services. Currently, that number is at 62.3%. Translated, that means more than one-third of the American work force is either not working or looking for work. Mike Rowe sheds some light on what this means for the services industries in the following 7-minute video.

Great article, Joe. The biggest problem I see in lack of productivity is improperly written estimates. Transmission estimates are very difficult to write. The main reason for that is a lot of transmission shop owners and managers try to quote a price with the transmission still in the car/truck. That's a guessing game at best. Before we give an estimate we do a Removal, Disassembly and Inspection (RDI) on every transmission we gave an estimate for. The fee we charged for that was $477 which we would waive if the customer approved the estimate. We prided our estimates as being written stone. (see below) With the rising prices do the inflation it's sometimes difficult for shop owners and/or managers to ask a PROFITABLE price. It sometimes it just simply takes courage. That's what it takes for sufficient productivity/profit. Under-bidding a job is the fastest way to lose productivity, and eventually, profitability. Most shops I know don't have a problem with tools, shop layout, or a productive workflow. I know my shop didn't. My crew started referring to me as "a tool junkie". Most good shops are that way. We did sometimes have one or 2 comebacks, but that tended to happen in waves. A labor guide is just that, a guide, and many times just flat-out wrong.

The short answer is no. Reduced work volume yes. But it never goes away entirely. Simple repairs and/or maintenance will drop in volume. I can't speak for general repair shops but I can speak for what I do for a living . I own a transmission shop and business never goes away entirely. Selective items like a transmission service or fixing a leak goes down volume during tough economic times. When you're mode to work effects getting to work and back home those repairs are not a deal breaker. I would like to think that general repair shops experience the same thing, but I don't know, I'm not in that business. In a nutshell, any repair that affects somebody's ability to make a living is a definite yes. Minor jobs that are elective will go down in tough economic times, major jobs will not.

Great news to hear! To find an SMS that integrates with QB is like having the best of both worlds. Did you know QB can be your total payroll solution? Over the years, QB has bought out several software companies and integrated those apps into their QB offering. Keep up the great work and keep us posted!

First, let me clarify something, I was using QuickBooks Desktop Pro which is not cloud based. Cloud based QuickBooks, in my opinion, is lame and very limited. QuickBooks Desktop has many more features that are helpful to the business. I was able to configure QuickBooks to the way I ran the business, not conforming how our business is run to some SMS system. Estimates and invoicing were 2 templates I designed. (shown below)Neil Gause.pdf I was also able to create various fields in our vendor list and customer lists. The front counter ran seamlessly with our accounting. I could print out a P&L or balance sheet with only a few mouse clicks. I have to confess that the way I configured QB bordered on programing because it included knowing QB code. I can't honestly recommend QB Desktop to the average shop, but it is one hellava better app than the cloud-based QB. I don't know any tips to avoid a cheap SMS other than to ask other shops. Whatever they recommend will likely involve configuring the way your shop is ran to the software. 2011P&L.pdf

After using three different SMS I finally migrated over to QuickBooks in 2000. It was difficult to configure to our business, but once it was configured properly, I loved it. My wife is an accountant and it had a lot to do with my decision.

I think what you plan to do as being an excellent idea, Juli. Take a lesson from my experience... First, make sure the people you sell your business to doesn't go out of business. That happened to us. Secondly, have an early pay off penalty clause for the real estate. The guy we sold the shop real estate to (different from who we sold the business to) paid off the mortgage totally off only 9 months in. We ended up paying $400K to the IRS. And... our $9,100/mo. payments for 30 years simply evaporated. Our retirement plans went out with the shitter. However, overall we came out OK even with the challenges. Like you, our home and new car are paid for and we have no debt. We'll make due with what we have to work with. Don't let my mistakes happen to you!!!

Can you elaborate what scared you off? The franchise or that particular franchisee? We all can learn a lesson from your experience.

bi0h4z4rd: How did he get your name and phone number if you live out of state?

I believe the following article will have great relevance to our industry in the coming years, especially to transmission shops and other classic big-ticket repairs. We are headed to an industry of maintenance and small-ticket repairs. That in of itself is not a bad thing. Like all technology, the price of EVs will come down to where it is much easier for the average consumer to buy a new vehicle albeit an EV. The factory building boom is indicative of the shift to lower-cost transportation for the average consumer. This shift won't happen overnight, but it will happen. Currently, Tesla wants to produce a $25K EV that would put EVs within reach of the average consumer. However, that could possibly be negated by the substantial increase in insurance premiums. EVs are simply a lot more to repair collision damage which will result in more total losses for insurance companies, hence higher premiums. Additionally, EVs will be largely made domestically. Foreign vehicles will become a smaller portion of the overall vehicle population. While ICE vehicles won't go away in our lifetime, they will become an increasingly smaller portion of the vehicle population. Currently, the best our industry can do is to keep an eye out for the coming changes and change our repair shop strategies accordingly.