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A Mechanic's Life - Tales From Under the Hood

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  • busirisbusiris Posts: 3,490
    Locate and read the article I described in TIME magazine, and the term "fraudulent" will come to mind frequently...
  • steverstever YooperlandPosts: 40,209
    edited April 2013
    getting it to market to sell, rather than repairing a significantly lesser number of units that experience failure later in life

    Well, warranty claims are a huge expense; I've seen reports that Ford does a design/build anticipating a 10 year lifespan for parts in order not to incur big warranty expenses (I guess they build for 10 for parts they guarantee for 5/60?). Even if GM only has a 2% warranty claims rate, we're still talking hundreds of millions of dollars and a reserve fund of billions. That's a lot of money "tied up" on the balance sheets. (warrantyweek.com)

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  • busirisbusiris Posts: 3,490
    edited April 2013
    And those "reserve" costs are included in the price of the product.

    Insurance companies aren't the only companies that employ actuaries. Automakers generally have a pretty good handle on what projected warranty costs will be.

    In the pre-paid card business, there's a term called "breakage", and its the term used for the amount of minutes, dollars, etc. that will never get used, due to card loss, user ambivalence, and other things.

    Breakage goes directly to the profit line, and the unwritten goal is to get card owners to incur as much breakage as possible, by not using the card.

    The theory is the same in warranty repair. Establish an amount reasonably expected to be incurred (calculated based upon actuarial-type criteria), and factor that into the selling price.

    Of course, boo-boos do arise, such as BMW and its high pressure fuel pump fiasco, and I'm betting in that case the guestimated frequency and costs of repairs far exceeded the budgeted amount. That's just 1 example.

    The real question comes into play when the manufacturing management starts playing funny with the reserve numbers, inflating expected profits by underestimating the true warranty repair costs.

    That's a big reason manufacturers sometimes do all they can to avoid recalls, not so much that it damages the brand image, but it whacks the allotted warranty repair costs estimates.
  • steverstever YooperlandPosts: 40,209
    edited April 2013
    BMW in general spends a lot more money on warranty repairs than most per that warranty site. VW is way up there too. The car company with the lowest reserves and charges is Honda. They also enjoy about the best reputation for reliability.

    Their cars aren't any cheaper. :shades:

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  • thecardoc3thecardoc3 Posts: 1,521
    edited April 2013
    The dealers are under contract to accept what the manufacturer pays for a given repair. In the event of a recall or an extended warraty consideration it is quite common to see the labor times slashed. The dealer in turn only pays the tech the reduced time and then expects the tech to upsell maintenance to "make up the time" and his/her paycheck.

    This goes all the way back around to NBC's sting. It wasn't right for the dealer techs to oversell the maintenance, and they got burned for that. Meanwhile NBC turned around and let the dealerships off the hook by blaming the techs and the writers. It's sad how the ones really at fault get away with what they have been doing to simply start the whole mess anew with another group of people.
  • busirisbusiris Posts: 3,490
    edited April 2013
    Their cars aren't any cheaper.

    But perhaps their cars are more profitable per unit.

    http://www.industryweek.com/blog/supplier-relationships-key-hondas-healthy-profi- t-margins
  • steverstever YooperlandPosts: 40,209
    edited April 2013
    Sure, and I think one factor is because their warranty costs are lower, due to their quality standards with suppliers, etc.

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  • andre1969andre1969 Posts: 21,912
    Competition could, in essence, mandate "engineered reliability", and it has, up to a point.... Just not 10years/100K miles (yet),

    They're definitely on their way. My buddy's 2006 Xterra has about 104,000 miles on it now, and has been pretty reliable. It had two tire pressure sensors fail, and needed work on the HVAC controls twice, and just recently the CD player quit ejecting. Otherwise, it's just been maintenance. However, he always takes it to the dealer for those 30K things, and I don't think they're particularly cheap.

    I don't think my uncle's 2003 Corolla gave him any major fits in the first 100K miles, either, although the catalytic converter started to fail soon after.

    Even my old 2000 Intrepid wasn't too bad for the first 100K miles. It had a power lock actuator fail around 35K, needed a new thermostat housing around 51K, and around 90K some TSB performed to fix the oil pressure light, which started flickering at low rpm, even though oil pressure was actually fine.

    As for warranties on maintenance and wear and tear items, don't some manufacturers, like BMW, offer that already?
  • thecardoc3thecardoc3 Posts: 1,521
    Seems some yahoo got the credit card number for my teaching account. Fraud control noticed some questionable purchses, in California! They tried to notify us yesterday evening on our business phone.

    The POS got us for a little more than a grand so far. Now I'm wondering if that's the only card they grabbed. :mad:
  • xwesxxwesx Fairbanks, AlaskaPosts: 8,406
    Interesting recount, Doc. The amazing thing here is that the customer was satisfied with the data collected as being enough to effectively throw another part at it and hope that solved the issue.

    Out of curiosity, what did you quote him to finish out the work? Assuming I really wanted to keep that car, I would have been sorely tempted to just keep forging ahead with it so that my car was reliably fixed afterward. There's a point at which I recognize that I'm in over my head and I am willing to admit that no amount of hedging is going to change that fact. :sick:
  • xwesxxwesx Fairbanks, AlaskaPosts: 8,406
    Wonderful. Any chance that's an April Fool joke?! :sick:
  • xwesxxwesx Fairbanks, AlaskaPosts: 8,406
    There's a positive feedback loop associated with higher profit margins, if the company is willing to take advantage of reinvesting such windfalls back into the company in the areas that really count. The American manufacturers could have taken advantage of that for decades, but they preferred to piddle such potential away.
  • thecardoc3thecardoc3 Posts: 1,521
    Wonderful. Any chance that's an April Fool joke?!

    Nope. I don't have enough imagination to come up with something like that. :sick:
  • busirisbusiris Posts: 3,490
    Well, that certainly sux!

    At least, credit cards do provide you loss protection from unapproved charges. Just another hassle in everyday life.
  • thecardoc3thecardoc3 Posts: 1,521
    http://www.youtube.com/watch?annotation_id=annotation_958511&feature=iv&src_vid=- j7X73fGAwGM&v=j7X73fGAwGM#t=27m45s

    Watch it twice, first time from the 27 minute mark as linked, and then go back and watch the whole thing.

    If you have the time, some of the other videos that are associated will make for some good discussion too.
  • busirisbusiris Posts: 3,490
    Well, I had some time, so I watched it from beginning to end.

    The guy from Nissan was, by far, the most prepared, IMO.

    The 2 things that hit me from his talk....

    1-Service techs call our service "hotline" looking for a silver bullet.
    2-We don't make it easy for them. They have to have a code before getting through to a live body.

    Overall, there's a grand shortage of service techs (only 5% of GM trainees make it to the top), and no one seems to have any real idea how to effect change.

    It's a real problem, and from a manufacturer/authorized dealership relationship, manufacturers are going to have to find ways to make dealers want to employ more and better qualified technicians.... I didn't see much in the way of that discussed in the video.

    Definitely, a very complex issue...
  • thecardoc3thecardoc3 Posts: 1,521
    1-Service techs call our service "hot line" looking for a silver bullet.

    Isn't funny that the real reason for that is because they don't pay the techs enough time to take a disciplined approach? They want it too fast, and the result is that it teaches bad habits.

    2-We don't make it easy for them. They have to have a code before getting through to a live body.

    So then they punish the bad habits, and then turn around and wonder why they lose techs.

    It's a real problem, and from a manufacturer/authorized dealership relationship, manufacturers are going to have to find ways to make dealers want to employ more and better qualified technicians.... I didn't see much in the way of that discussed in the video

    Where are they going to find better techs? They have decades of failing to support the technicians work force to overcome. Even if we could attract the right prospects tomorrow, it takes twenty years to learn to be that full master technician, and that's not taking into account the changes that we don't even know are coming.
  • steverstever YooperlandPosts: 40,209
    edited April 2013
    Where are they going to find better techs?

    They aren't. The manufacturers are going to have to build more reliable cars and figure out some way to fix the dealer franchise system. It's broken.

    The independents? Dying breed, they'll be as rare as Mayberry Emmetts who can fix your toaster or window fan. When was the last time you saw one of those guys?

    The real problem is that self driving cars won't be able to drive themselves to the shop when they break down. :D

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  • thecardoc3thecardoc3 Posts: 1,521
    Now when everybody and their uncle takes pot shots at techs, whether deserved or not, just imagine what that does when it comes to trying to attract talent.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,619
    That never discouraged people from becoming lawyers! :P

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  • steverstever YooperlandPosts: 40,209
    That's just human nature; everyone complains about docs/lawyers but they typically love their own personal one. You just have to quit reading that stuff. Kill your TV. :shades:

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  • busirisbusiris Posts: 3,490
    First of all, I agree that the independent shops are like the dinosaurs, looking at that big bright object in the sky, headed their way and getting larger by the minute. In all the shops that do anything but the most basic, common repairs, the independent shop is going to disappear by 2025, just like the milkman, the service station attendant and the doctor that made house calls. Simply put, the environment is evolving.

    But, what about the future of car repairs/maintenance?

    I see several possibilities... Some are...

    1- Throw-away vehicles, like the TV and computer of today. Built for a specific, relatively short lifespan, they will be recycled into new cars with the latest technology. Planned obsolescence, and no worries about outdated versions of software controls.

    2- The separation of dealer sales & service centers, possibly with the manufacturers running the service centers and dealers only selling. A hybrid version: Dealers disappear completely, and cars are sold primarily via Internet and Apple-style stores. Service centers are regionally located within sales areas.

    3- Dealers cede the service responsibilities management to the manufacturer, and manufacturers run each dealer's service organization, eliminating the wide variance of how each dealer's shop facilities are manned and equipped. Uniform service becomes much more attainable.

    4- Something entirely different...

    One thing is for sure... If the manufacturers are thinking this is a problem that will eventually get resolved once the dealers "come around" to the idea of providing responsible service, they're on a different planet than we are... If anything, many dealers are getting "cheaper" nowadays.

    As for Cardoc's implication that the general public "takes it out" on service techs, I personally don't see it that way. What I see is ill will towards the dealerships and manufacturers. A common term one sees on forums is "stealerships", and I think most folks understand the lack of qualified, ably trained techs is not a fault of the techs themselves, but a lack of effort by dealerships/manufacturers.

    Then again, I don't face repair customers on a daily basis. But, I spend enough time on forums to know that many either don't ( or can't ) comprehend that a $50-60 K lux-mobile will ALWAYS have a higher cost to maintain than a basic, no-optioned Toyoya Corolla.

    Of course, I could be totally off-the-mark. After all, back in the 1960's, when seat belts were finally mandated, I would have bet good money that no one would die due to lack of wearing their seat belt by the time the 21st Century rolled around. Same for smoking. I was terribly wrong on both accounts.
  • roadburnerroadburner Posts: 6,386
    I don't see independents becoming extinct, but I can see the survivors being the shops that specialize in no more than 2-3 brands(Audi/VW, BMW/MINI, Buick/Cadillac/Chevrolet, etc.). In my case those shops have always been the ones that I wound up patronizing. Unfairly or not, if I was looking for a new shop to use for maintenance or repairs on my BMWs I would zero in on a shop that had a good reputation among BMW enthusiasts- as opposed to BMW "wearers"-and in almost every case that turns out to a BMW specialist shop.

    2009 328i / 2004 X3 2.5/ 1995 318ti Club Sport/ 1975 2002A/ 2007 Mazdaspeed 3/ 1999 Wrangler/ 1996 Speed Triple Challenge Cup Replica

  • thecardoc3thecardoc3 Posts: 1,521
    There are more lawyers in New Jersey than there are Master Technicians in the whole country. Think about that.
  • thecardoc3thecardoc3 Posts: 1,521
    Overall, there's a grand shortage of service techs (only 5% of GM trainees make it to the top), and no one seems to have any real idea how to effect change.

    Techs around the country know what the problems are, which is the first step towards fixing the problems but their voices fall on deaf ears. That's why you don't see them telling kids that this is a great career to come into.

    The kids that do try to enter the trade quickly learn just how poorly its administered so they leave while they still have time to do something else with their lives. Just go back to the two statements about using the techline. Is it really all that different? The techs calling in to the hotline looking for the silver bullet, than the DIY'ers who write in here looking for a silver bullet in the Answers forum? It is the wrong approach in both cases, but the DIY'ers don't know better, and the techs aren't encouraged, or rewarded for taking a disciplined routine towards real diagnostics. Even worse, when they do someone at some point will turn around and say something like "P0101, I knew it was a bad MAF why did you spend all of that time testing it?"
    Toy tool sellers, like CarMD tell the public pull the code and our database will tell you what is wrong with your car, as if that's all it genuinely tales, all of the time. The contradictions are everywhere and they can be maddening.

    BTW, the one way to effect change the quickest? No new blood so that the trade collapses through attrition. The peak should occur about five to ten years from right now at our present pace.

    Roadburner had one part right about specializing, the problem is there isn't enough work in one or two manufacturers anymore to keep a shop afloat. There hasn't been enough for a while, which is why those dealers got caught selling wallet flushes.
  • srs_49srs_49 Posts: 1,394
    1- Throw-away vehicles, like the TV and computer of today.

    Never going to happen, unless you can buy a new vehicle for less then $199 :P .

    4- Something entirely different...

    Maybe a tiered or hierarchical service concept?

    At the bottom layer would be the techs (or shops) doing the routine/maintainence stuff - tires, brakes, oil changes, wiper blades, etc.

    In the middle would be the techs working on the electronics or emissions.

    At the top would be those - maybe like cardoc3 - who can troubleshoot problems that seem to or may actually, involve multiple failures.

    This could take the shape of a pyramid, with, for example, 1 top-tiered center supporting 5 middle tired centers and 10 lower tiered centers.

    In any case, it's a given that 1) vehicles are more reliable today than they were 20 or 30 years ago, but 2) when something does go wrong, it can be a bear and cost big bucks to diagnose and fix the problem.

    Question for cardoc3 -
    Is there any mechanism in place for techs like yourself to report problems back to the manufacturers? You've related a couple of stories about the root cause of a problem being in the wiring someplace - chaffed insulation, pinched wiring, corroded connection, etc. Wouldn't the manufacturer want to know about such problems, so that they can use them as sort of a lessons learned to improve their product? The rationale being to improve the quality of there product so that the need for repairs are reduced or eliminated?
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 44,619
    "Never going to happen, unless you can buy a new vehicle for less then $199"....

    I would disagree with that. In fact, this is *already* happening to out of warranty cars.

    Some examples:

    1. Many cars which are flooded are automatically totaled--repairs are not even attempted in some cases.

    2. Most cars built say in the last ten years, with a value of say $7500 or less, that lose their engines AND are out of warranty, are junked.

    3. Some cars built between 2003 and 2013 have engine computers that cost thousands of dollars. If you own a very high mileage example that's a bit scruffy, you'd be apt to get rid of it.

    It's not unimaginable that dealers or automakers will face a complexity of warranty repairs wherein the labor or parts invested would be more expensive than pro-rating the car and taking it back to the factory for refurbishment.

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  • fintailfintail Posts: 33,596
    Complex cars are also throwaway when they start going wrong. A ca. 2001 S600 with any major issues is a parts car. An old A8 with issues is scrap value. Old V12 7er is even worse.

    For indy shops, maybe the jack of all trades ones will be numbered, but brand specialists will continue to have customers, especially when their work on big jobs is significantly less than the dealer, usually with identical results. Not special for oil changes, but if you need a transmission etc.
  • srs_49srs_49 Posts: 1,394
    I don't disagree with your examples. Almost any consumer product is, at some point in time, going to get to where it's just not financially viable to keep it going.

    However, bisiris seemed to be hinting at vehicles that were specifically designed to be throwaway - not repairable in the usual sense. I don't think that would include cars that were flooded.

    1- Throw-away vehicles, like the TV and computer of today. Built for a specific, relatively short lifespan, they will be recycled into new cars with the latest technology. Planned obsolescence, and no worries about outdated versions of software controls.

    Back to flooded cars for a minute. Many people would declare a loss a cell phone that was dropped in the toilet. But I would open it up as much as I could, remove the battery, SIM card, and whatever else would come out. Then I would bake it in a ordinary oven at, say 150 deg F or 175 deg F and try to dry it out.
  • srs_49srs_49 Posts: 1,394
    Complex cars are also throwaway when they start going wrong. A ca. 2001 S600 with any major issues is a parts car. An old A8 with issues is scrap value. Old V12 7er is even worse.

    True. Like I said above, any product eventually gets to the point where it doesn't make financial sense to repair or maintain it. But that's not quite the same as a vehicle that designed from the get-go to be throwaway.
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