Unpacking Ethics in Auto Repair Businesses - Do You Have To Decide Between Transparency or Profit?

Transform your shop's marketing with the best in the automotive industry, Shop Marketing Pros!
Get a free audit of your shop's current marketing by clicking here: geni.us/ShopMarketingPros
From the challenges of managing a shop that's true to its values to the mechanics of maintaining integrity in a profit-driven environment, Lucas and David discuss what it means to run a business that's fair for both the customer and the industry.
00:00 Trusted mechanic found to be "dishonest".
06:04 Car scanned, fixed price presented without authorization.
08:52 Industry practices prioritize profit over customer service.
10:49 Bill Nalu emphasizes fixing cars over testing.
14:01 Tire stores prioritize speed over quality work.
17:23 Prioritizing growth over staff and service impact.
19:39 Auto shop holds car hostage for profit.
24:38 Prioritize staff, consumer, public, business, industry perception.
28:56 Not trying to be disparaging, just curious.
32:10 Ignoring majority's health, but we're successful.
35:36 Most people can't handle hard pushback.
38:43 Desire for convenience leads to laziness.
41:53 Zoolander joke, references, disregarding historical importance.
44:54 Matt expands company to provide more opportunities.
49:04 Discussing helping staff buy real estate, not cars.
51:02 Simplify benefits package when considering job offers.
54:26 Video depicts woman's realization of imminent death.

[@YotaGuy_Kyle]

An over loaded shop can look like the Shop is holding the "car" hostage. When In fact the shop is over extended and cannot commit to bigger jobs. My life as a dealer Tech (Toyota Master) is just that. Im Buried in Diag, and comebacks from Maintenance techs and Body shop repairs. One of 3 Master techs in a 20 service bay Toyota shop. Its coming to a end in 2024, I'm Pushing for New pay plan That doesn't incentivize the Un educated. If it doesn't work out, then I'm heading to Firestone or Independent shop and lay low and Play dumb for a while. The More you Know the harder this Field becomes. Great discussion Guys.

[@ChangingTheIndustry]

Thanks for watching! It would surprise you how many of these shops would love for you to think they are "accidentally" overloaded or overloaded as a result of staffing. Some of them? They use it as an actual business strategy.

[@YotaGuy_Kyle]

@@ChangingTheIndustry exactly , I call it the chaos, control, strategy.

[@drivendiary]

Delayed, deceived, and disappointed. Those are the customer sentiments that led me to open a shop and aim to change the industry for the better.

[@socialphotography3753]

Yall really reeled it together there at about 50 minutes in. I liked your real-estate idea. I worked with a tech years ago. We did team engine building on 15 liter engines. He used to to ask lots of questions and had what I thought was crazy ideas. One day he said," why can't they pay for our insurance?" This is a 3 billion dollar company. He said when I have my own shop I'm paying for all their insurance. Now he owns 2 shops. He pays 100% of his employees insurance. He is also the number 1 parts customer for that dealer that we worked at.

[@SoLucky]

So I used to work at the place you are talking about. You are speaking on Todd Hayes. I left the company that he runs. The guy sucks as a human being… However, he is 100% accurate on the $1000 ARO I lived it day in and day out. What he doesn’t mention is… that it’s 95% on just the isolate… once we start moving around the bases it’s about 65% on avg close ratio. I have since left Adams automotive and move on to another company. I have used all the principals that I have learned from Todd and Joe Adams and my new shops are seeing all time records in the middle of the winter. Todd is a hard person to listen to but he absolutely knows his stuff. We were doing 1 million a month out of his shop

[@ChangingTheIndustry]

I'm curious about the free diag, while paying the tech, isn't it kind of bait and switch? Doesn't it somewhat devalue the industry as a whole? And only estimating red items? And only presenting things they think they will sell? And only doing easier work and gravy work, leaving the more complex work for others? Can you speak to these things?

[@ChangingTheIndustry]

Also....isn't saying the 95% close ratio is 100% true followed by its actually 65% (and its that high by only recommending what you think the client will buy) a bit of a lie in itself?

[@SoLucky]

I can speak on all of it! I worked there and understand it completely . The goal was to get the car in the shop and start the diag process as fast as possible. No charge. We would take the hit on GP on the diag. For example, most of our techs are roughly 50 to 55 dollar flag rate. Let’s say the car comes in for a cel and turns out it’s a evap code. We will eat the testing of an 1 hour for the smoke test and also in the process pmi the car. Let’s just say that the components that needs to be replaced parts and labor is $600 ( don’t forget that our labor rate is $300 plus) We ate the 50 that we owe the tech for diag… we send pictures, videos, animations,and used ChatGPT. We sell the job and then let the customer know that we are going to look over the rest of their car with their ASE certified technician and we will notify them of the full bumper to bumper inspection. Call back in 45 minutes, update customer with how the repair is going and the results of the bumper to bumper inspection. This way we don’t throw the kitchen sink at the customer and we focus on what they came in for then tell them we are going to look for other stuff and expect a phone call. The complex work we would do all the time. In most cases once you get past the isolation concern … the rest is typically easier work. Oil leaks and suspension, etc but if we got do the gears in the diff or drop a motor to fix a timing cover on a Lexus suv… it is what it is we would do it. If you use this process properly it works so well, when you skip steps or do not communicate well, you get the bad reviews that you mentioned. One thing you have to understand about Todd is this. He is trying to sell seats to his training classes. So he will use word tracks like 95% and not tell the whole story. It’s 95% on what the Customer came in for. But guess what… if they came in for an oil change that is part of the 95% 65% is the real story. You can not be hired there if you are not an elite closer. They having training every day. They pay extremely well. Most advisors are making 150k minimum. They do not treat their employees as well as they say they do. People leave this place all the time. Anyway I could go on and on about them. Good and bad. I will say this. The process is rock solid if used correctly

[@SoLucky]

By the way, I love your show and look forward to more episodes

[@MooseKnuckleGarage]

I don’t exactly have a position of authority in any of this but I feel strongly that the change in our industry is going to come from the small end and not the $43m end. I don’t have anything against profitability or even large revenue numbers such as that… I have a conviction that it is my job to educate each and every customer as well as possible, which means an occasionally uncomfortable level of transparency. Thanks to both of you handsome devils for giving me thought provoking content on a regular basis.

[@malibuStroker]

Lucas is absolutely right, especially with the economy getting worse people don’t want you to make a dime. They absolutely see you marking up a part, or charging a reasonable hourly rate as ripping them off. The main problem today is that now that unreasonable customer will get on social media and tell thousands of people in your area what a shady crook you are.

[@jeffcompton6937]

Lol now this is the best Christmas present I've ever gotten. Love u David lol

[@borderm3]

Customers going to parts stores to get it scanned and bring you a part is often going to be this kind of customer imho. You have to nip it in the bud during the phone call. “Mr Customer, we really need to get it in here and put an hour diagnostic on it and then we can get you a price to repair it. Its very common to misdiagnose via a scan.”

[@patrioticimmigrant8817]

Not all customers are the same. As owners we don't want all customers. Everyone is different.

[@1MiketheMechanic]

You both have a lot of valid points. I have seen first hand what happens when you chase the money versus all the other ways you can lead a shop. Take care of the client and the employees and the money will follow.

[@ChangingTheIndustry]

Thanks for the feedback, brother!

[@coldfinger459sub0]

1000% correct both of you are spot on. Exactly what you were discussing my father and grandfather educated me about these kind of individuals in the automotive industry And in my younger life, I’ve worked for these type of individuals for a short while before firing them . They our legends and gods in their own mind, they are masters of the industry. Money is absolutely the only thing that matters and nobody below them other than to make excuses and stories that they actually care about everybody under them. It’s a façade Definitely heard that one. That’s the excuse they always use I provide jobs for people. . They rank up there, with the grates of Bernie Madoff . Elizabeth Holmes. And the cryptocurrency young guy with the curly hair, who is just going to prison . All these individuals are woven from the same fabric in our automotive industry who worked like that . When I was young, I was fortunate enough, or we can say unfortunate enough to have one of these individuals attempt to educate, persuade me and mentor me in this ideology method of making money and how they make it righteous and how they twist the morals and ethics that do not apply. Been there done that these people first hand experience from Satan‘s mouth themselves . 🤣

[@ChangingTheIndustry]

Thanks for watching, brother!

[@coldfinger459sub0]

@RepentandbelieveinJesusChrist. I’m a first testament guy myself. A 👁️ EYE for an EYE 👁️

[@johnreyna5080]

Like the podcast. I have a different perspective from a non-mechanic and from my mechanic dad. I would welcome and opportunity to discuss more the customer perspective.

[@bigdredre3725]

As a tech I want to fix your car, I want to fix it right, I want to do it once, I want you to come back for something else.

[@borderm3]

Costs 7k to tile a shower. Why should fixing a car be so cheap?

[@peanutbutterisfu]

I’ve been saying stuff like this for a long time. People have no problem paying 10k for new furnace and central air that cost 3500 in parts the company makes 6500 gross profit and has it done in half a day that’s not a problem for them to make over 1,000 bucks per hour. No problem paying a plumber 300 to put 50 cent washers in the valves in ur sink so it doesn’t drip. 30k to install cabinets, countertops, tiles and paint the walls in their kitchens. 5,000 bucks to have a mason pour a small patio. Nobody talks about any of these things atleast to the volume of talking about auto repair and their profit margins are WAYY higher then auto repair.

[@FixtIt]

It's so easy to point the finger at the mechanic. What if we tried going into doctors offices to see if they're "overcharging"?

[@ChangingTheIndustry]

So true! I think what we'll find is blue collar America is being told they are "overcharging" because we're not using shady, manipulative tactics to make it feel nice. Consumers have no issues on spending an extra grand on a washing machine because it has a color touch screen. Or a 2k smartphone because you can make payments. Americans don't have a problem spending money - Americans have a problem with priorities. We've been so spoiled and so manipulated by consumerism for so long that we're blind to reality.

[@socialphotography3753]

There is a difference between opening up a conversation about mobile and foreman and mocking or making derogatory comments about what someone does for a living =snide. I left the fb group due to the mobile comments on there. I enjoy the podcast though. I never took it personal. I just choose to surround myself with support and give that back myself.

[@DavidRomanKC]

The problem is that people read intentionality into text on social media. Saying "mobile guys are ruining the industry" is simply an opinion. Taking offense to that statement is a choice. One can choose to not take offense and instead engage with the person to try to understand why they think that. Or, one can decide they'd rather not listen to any dissenting voices, convince themselves that what they're doing is entirely in the right. It's all a personal choice, irrespective of what the other person is saying. I appreciate that you listen to the podcast though! 😅

[@jesus127681]

is there a episode where david explains his opinion why shop foremans are unnecessary ?

[@luisalberto1456]

Ok so you guys are talking about Hodd Tayes huh? Adams / NOW Auto Care

[@luisalberto1456]

I’d like to say that the benefits package was OK and that the pay was OK minus the fact that they sell you on you being salaried non-exempt meaning you qualify for overtime and that you will get a percentage commission of the gross profit on the store however they end up not ever paying you any overtime because they don’t allow you to clock in or out

[@gbautotech]

You are making a lot of assumptions to sign a video that you really do not know the answer to your only questioning assuming you know.