Automotive Integrity Podcast

We’re Undervaluing Auto Technicians—Here’s Proof

• Automotive Integrity Alliance, Inc. • Season 1 • Episode 6

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0:00 | 57:33

The numbers don’t lie—and they don’t look good for the automotive industry.

Brandon and Austin break down data comparing auto techs to other trades and discuss why technicians are often paid less despite increasing complexity.

We cover:

  •  The growing gap between trades 
  •  Why automotive has no defined career ladder 
  •  How that impacts technician retention 
  •  Why labor rates don’t always match skill level 
  •  And why AI and scan tools can’t replace experience 

This episode pulls no punches.

SPEAKER_01

Welcome to another episode of the Automotive Integrity Podcast. I'm Brandon along with my co-host Austin, and a lot of discussion in the industry about tech shortage and techs leaving the industry, new techs not coming in. There's been a lot of talk about technicians leaving the industry and going to the other trades, such as HVAC, plumbing, electrical, and so forth. So we did a little bit of research comparing the automotive business to, or automotive repair business to the other trades, and I found some pretty interesting numbers. You know, if we look at the businesses as a whole, uh there are roughly about 250,000 auto repair businesses. And there's compared to about 120,000 HVAC businesses, 130,000 uh plumbing contractors, and around 100,000 electrician or electrical businesses. And the revenue share between those, you know, in comparison is pretty significant also. Um automotive repair with 250,000 total businesses, their annual revenue is right around $700,000 as an average. So everything that we're talking about today is averages, um, you know, median uh wages, you know, nationwide averages. So when it comes to regional, the numbers could be you know different or what have you, but so all we can do is kind of compare the average numbers. So that's kind of what we're looking at. So the average revenue uh for auto repair business is around $740,000, $730,000, something along those lines. Where the aver average revenue for HVAC contractors is around one, or HVAC businesses is around $1.3 million, so quite a bit higher. Plumbing contractors is $1.5 million is the average revenue per business. And for electrical contractors, it's around uh between $2.6 and $3.2 million per year that they're doing in total business revenue. There is more businesses fighting for revenue in the automotive repair business than there is in the other trades. And what I think what I'm thinking is probably a big contributor of the number of businesses in automotive repair versus the other trades is the fact that there is a low bar of entry in auto repair. So all of the other trades have licensing that you have to go through. They have a structured apprenticeship, journeyman, master, uh they have to be licensed contractors, follow codes and all of that good stuff, where the automotive repair business doesn't have any of that. I mean, there there is some licensing depending on the states that you're in. Usually it's related to admissions. But for a person to go and open a business as an automotive repair shop, other than you know, doing the standard business licensing, there isn't anything that's prohibiting them or preventing them from opening their own shop. Whereas HVAC, plumbing, electrical contractors, and I could be wrong on this, but I'm pretty sure that you either have to have or be a master technician in order to get your business license in order to even start the business. So I think that low barrier of entry is why there is so many automotive repair businesses compared to the other trades. When you're looking at the total revenue of per industry per trade, um automotive repair shops share $183.4 billion. Um, so that's the total revenue of all automotive repair shops is $183 billion. Electrical contractors is $160 billion, plumbing contractors is $191 billion, and electrical contractors is $260 billion.

SPEAKER_00

HVAC contractors are $160 billion.

SPEAKER_01

Yeah. Is that not what I said? You said electrical, yes. Oh, okay. Yeah, HVAC contractors are $160 billion. So there are more shops that are are fighting for or trying to share that total, you know, $160 to $180 billion in revenue than all of the rest of the industries. So, you know, and that's I I think where that lower low barrier of entry comes in. And I think what is happening, it does happen, maybe not all the time, but uh because there's a low barrier of entry, and because technicians, you know, believe that they are underpaid, which which we'll get into that, that they are compared to the other trades. There are quite a few technicians that decide that you know the shop's charging $150 an hour, and I'm only getting paid, you know, $35 an hour, or $30 an hour, or $25 an hour, whatever it may be, and think, well, I've got the tools, I've got the knowledge, I can go start my own business and go mobile, rent a space, what have you, and I can charge $80 an hour and double the income or the revenue that I'm generating, and put that extra in the money or in my pocket, and I'm gonna have customers for days because I'm cheaper than everybody else, and they don't realize the back end of the business and all of the expenses that go along with it and and everything else. On our first podcast, I said that I did that. You know, 20 25 years ago, I I thought, I I'm a good technician, I've got the tools, I'm gonna I'm gonna give it a go and and try it. And at 20 years old, I learned really quick that it's not all you know shut sunshine and rainbows. You know, it it there's more a whole lot more to it than that. But um when we compare the median hourly wage between the industries, the average automotive repair technician is 2388 an hour. Again, this is average across the country. There's probably going to be a lot of technicians that say I wouldn't work for less than whatever it is, you know. Um, but a median hourly wage is 2388 an hour. Where HVAC is 28.75 an hour, plumbing is $30.27 an hour, and electrical contractors uh employees are $29.98 an hour. So there is a big wage gap in between technicians across trades, I guess you could say, um, with automotive repair being on the low end of it. HVAC Plumbing Electrical, they have very clear defined paths in their in the career. You start out as an apprentice in all of the other trades. You work as an apprentice for four or five years, what have you, and then you have to take a test to move up to a journeyman, and then you work that for whatever the time period is, and then you can take a test to become a master. Well, besides ASC certifications, you know, dealer level service certifications and so forth, there is no clear-defined path to go from one level to another level to another level. Because of that, it's very gray as far as what a technician is is capable of. There's no structure that says this technician's an A level, this technician's a B level, this technician's a C level. You know, it's really determination between the employer and the employee as far as how they're classified. There's no formal structure, I guess, is what I'm trying to say. So there's no clear path to move up the ladder either. If you look at the work that automotive repair technicians are doing and how complicated vehicles are becoming nowadays, and you take out all of the other licensing requirements, certification requirements of the other trades, automotive repair is more complicated, in my opinion, anyway, than the other trades. You know, HVAC Plumbing Electrical, they're working on static systems. And I'm not trying to say that that their jobs are easier by any means or anything along those lines. What I will say is the systems that HVAC Plumbing Electrical work on are typically very similar across everything that they're doing. So, you know, electrical, you've got an electrical panel, you've got wiring, you've got outlets, connectors, and obviously it gets a whole lot more complicated than that, but it's a system, and the system is static. Same with plumbing, same with with HVAC. Whereas automotive repair, you're working with hydraulics, you're working with computers, you're working with networking, you're working with and every manufacturer is different between them. So it's a whole lot more complicated working on vehicles than it is working on the systems of the other trades, if that makes sense.

SPEAKER_00

And to be an automotive repair tech, you have to be versed in HVAC plumbing and electrical, electrical a little bit in a different way than than like house electrical stuff. Like you said, CAN bus networks, um, understanding how they work. It's it's I I would say it's a little more involved, the electrical side of vehicles is, anyways. I mean, I'm thinking of wall outlets, and there's there's probably more to it than that, but I mean you have solenoids that are pulsed with modulated computers that are looking for crank signals and waveforms. You know what I mean? It's there's much more to a vehicle as far as electrical goes, and the signals they send and receive the computers.

SPEAKER_01

Yeah, it's not just power distribution. Yeah, you know. It's it's data communication and and there's some of that uh in electrical also, nowhere near the level of cars, you know, when when computers are sending data and you know, you've got your five-volt references and pull down the voltage and resistances and and all of that stuff. It's it's it's definitely a lot more complicated. Another thing about automotive repair that isn't I mean, there's some levels of work um or jobs that take place in, you know, the HVAC plumbing and electrical. I mean, there's some design work and um, you know, reading the blueprints and getting the approvals for the permits and doing everything to code. And so, I mean, it's not uh don't get me wrong, I'm not saying that the other trades are easy. They're not, you know. I think that they're easier to master. Um if somebody wants to go down that path, uh, to go from an apprentice to a master, I think is probably easier in the other trades than it is in the automotive world. And in the automotive world, not all of the work that we're doing is equal either. Your maintenance, your brakes, your stuff like that is you know, fairly simple stuff. And and even that stuff with the the complication of cars and and how many sensors there are and and so forth, you have to know what you're doing or you can cause problems. You know, the the late model Chevies, if you don't pull the brake fluid cap off of the reservoir before you compress the calipers and you can burn out the ABS module. You know, so there's there's quite a bit of risk, and if you don't know what you're doing, you can create issues. Even at the low-end, you know, C tech, you have to have a lot of knowledge. And I honestly think that a C Tech is probably equal to, you know, a high apprenticeship, low journeyman status in the other trades. You know, but their their wages aren't technician wages aren't reflected the same. And I think a lot of it has to do with the fact that the market is well there there's a couple things. There's a whole lot more automotive repair businesses than there is the other trades. So everybody's fighting for the dollar, everybody's it's a race to a bottom, and so forth. So when you're in that atmosphere, you can't charge the customers as much. And when you can't charge the customers as much, you can't pay the technicians as much. I'm kind of going a little bit all over the place. When I say not all work is equal, you've got very simple stuff, um, you know, brakes, steering suspension, kind of the more static stuff. Um, and then you've got your CAN issues, your electrical issues, programming events, and then you've got, you know, I guess I would group diagnostics in with that also. And then you've got your internal engine work, timing chains, you know, engine rebuilds, transmission rebuilds that are are also complicated. And the automotive industry has almost always been what's your door rate? You know, it's $100 an hour, $125 an hour, $150 an hour. All of these levels of work, from maintenance all the way to engine rebuilds to diagnostics, take a different level of knowledge, risk, and warranty concerns or probability. To have one set labor rate that encompasses all of it, I think is not the right way to do it. You almost have to have a tiered labor schedule where, you know, and I'm just using round numbers, but maybe your your maintenance, your brakes, tires, stuff like that, the the simple, quick, easy stuff, you know, maybe that's $100 an hour, and I'm just using numbers, so uh and every market is different. Where the internal engine work like timing chains, transmission rebuild, stuff like that, um would be $125 an hour, or and diagnostics would be $150 an hour. You know, because you have to have a stronger knowledge and it's more complicated work, and there's there's bigger risks. If you look at diagnostics, so so I would say that the majority of the work that technicians, automotive repair shops do is going to be your maintenance and you know, brakes, steering suspension, that kind of stuff. That's the majority of the work, and that's fairly low risk, repeatable work, pretty easy. Diagnostics is the more complicated work. Shops are judged on their diagnostics capability. Most of the time, when you have a complaint or you hear a complaint about a shop, is they threw this part at it and that part didn't correct the issue. You don't it it happens. I mean, you'll you'll get some complaints that, oh, they maybe they installed my brick pads wrong or something along those lines. But from a customer perception and a business perception, the maintenance and so forth is the the majority of a business's revenue where the diagnostic capability is the majority of the reputation of the shop. So, you know, there there's there's a risk when it comes to that as well, that if you're if you don't have properly trained technicians and you're trying to do diagnostic work and you're throwing parts at a car, you know, you you can get in trouble if you don't know what you're doing. Another interesting statistic that I saw was when you look at all of the trades, the majority of technicians that are in the trades are in that C to low B level. The majority of them are. Whereas in the other trades, the majority of their workforce is in the journeyman level. So there's less apprentices, more journeymen, less masters. And in the automotive world, the majority is is in that lower level. So is that because technicians aren't moving up, or is it because technicians are not giving the training that they need? You know, what is the cause? We're not, as an industry, we're not doing a good job, according to the numbers. I mean, every shop is different, getting them from that entry-level or lower level technician to that mid-level. And, you know, not every shop needs five A technicians. You know, most shops are good with, you know, five C technicians or three C technicians and one A-level technician or what have you. Um, you know, that's kind of, and maybe that's the fact of the matter, too, is that because the majority of the repairs on cars are that lower end maintenance, there's not an opportunity to move up to that next level as well. Not only that, but there are a lot of techs out there that don't want to move up to that level because of the flat rate pay. Because diagnostic is a lot of times given away, or you know, they're they're given a 0.3 by the dealers to do an electrical diagnostic or what have you, the technicians are actually losing money doing those diagnostic jobs versus the gravy jobs. So, you know, i it it's kind of uh it's kind of an unfair system when you look at it from a pay scale, because the most knowledgeable people in the industry, if they're being paid flat rate, are being punished for their knowledge, which doesn't make any sense at all.

SPEAKER_00

Yeah, another thing is uh auto repair, and we we handle diagnostics similar to um HVAC plumbing and electrical, but they generally do not go out to your house and tell you what's wrong with your furnace, plumbing, whatever the component is for free. There is a trip charge, there is the time they're there, and they charge for all of it. Whereas auto repair, a lot of customers I believe have actually been trained by other shops that they don't charge to scan the code, and then all they did is scan the code, so we'll throw the part at it and see what happens. You know what I mean? Um I mean that that's like a weekly basis for me is um I've actually had people come in and say they already diagnosed it. And I asked them how they came to the conclusion that it needed what it needed, and they said they scanned it for codes. I just told them that's not how we do things here, and if that's what they're looking for, we are not the place for them. I said I'm not I'm not putting this in your car because your scanner told it to you. I wouldn't do it to my car, my sister's car, another customer's car. That's just not how we uh not how we operate. But when you diagnose vehicles that way, that's how you're able to do it for free. Is because you're not really diagnosing it, you're scanning a code, seeing what the computer says is wrong. It could be a handful of things. This is the most common or the cheapest. Let's try this first. I mean that's that that's how they do it for free a lot of the times.

SPEAKER_01

Yeah, and a lot of times they're wrong. And that's where I was saying before that you know, the diagnostic capability of the shop dictates the the reputation of the shop a whole lot more than the the general repair work does. And if they're doing free diagnostics and they're you know, it it it's uh in the last probably ten years the diagnostic complexity of vehicles has increased a tremendous amount. You know, and when I first entered into the the industry, you know, we were just we were going from OBD one to OBD two and scan tools. We're just starting to come into automotive repair. And you know, at that point, because the tools were so expensive and so forth, a lot of shops charged, you know, whatever, $45 or $25 or whatever the fee was at that time just to pull the codes on it, because they spent $6,000, $8,000, $10,000 on a OBD2 scanner. And and it probably wasn't that much back then. I don't remember how much it was, but you know, they may had to make an investment in these scan tools to even be able to pull the diagnostic trouble codes on them. And a lot of shops charged because they had to spend the money on it. And we went to where the scan tools became more and more prominent, and now you can, you know, customers can buy a $45 OBD dongle that connects to their phone and and can tell them the code. And then they got you got them plugging in the codes into ChatGPT and having Chat GPT try and diagnose it, but they don't realize that 90% of the time ChatGPT doesn't know what the hell it's talking about.

SPEAKER_00

Like the last time I used it was it was a focus um focus wiper issue. Basically, power and ground to the wiper motor, but then that uses the Lin bus to activate it. There's a Lin bus, the two separate motors and transmissions basically, a Lin bus wire connecting the two. What so what I put into ChatGPT was there was like 29 mega ohms of resistance from the LIN line in to the master module, if you will, the one that sends the LIN line or the LIN message to the other module. There's an in and an out, and I measured continuity across the two of them because basically the windshield wipers wouldn't work at all. And I had a LIN, it had power ground and a LIN message from the car. So I mean at that point it was I was I just wanted to verify that I wasn't missing something and at like 29 mega ohms of resistance and I put it into Chat GPT and said what resistance should I have across three and four? And it told me 0.2 ohms or 0.3 ohms. It it basically told me it gave me a result as if those were the wires for the motor inside, not the LIN line, the the the communication network. And I actually corrected Chat GPT, told them this is not the motor, this is the LIN line in and out. Pins three and four, I even get the wire colors, and it said literally said, Oh yes, you're correct.

SPEAKER_01

Right.

SPEAKER_00

And then basically told me 29 mega ohms of resistance was no good, which I pretty much already knew that's pretty much open circuit, but there was no in in the diagnostic sheet from Ford or the process, and the only time I use it for resistance values. All I was trying to do was hit hit the nail home, essentially. I just wanted to know that 29 mega ohms of resistance was probably too high. And I mean the LIN lines, data communication lines don't need it it is very low amperage, so they don't need a lot of resistance or they they they don't need much continuity to work, whereas a power and ground, I mean you you you want continuity there, you want low resistance there.

SPEAKER_01

Sure.

SPEAKER_00

That was a little bit off topic, but to show that chat GPT really, and then I have several tabs, several chat GPT things saved that I've used in the past that are are incorrect.

SPEAKER_01

It's kind of fun to play with ChatGPT a little bit, you know, um, and especially when you're you're working a complicated problem, you know, that uh information isn't available for. You know, one one thing that comes to mind that I did was uh uh we had a 2010 Equinox that was stuck in OnStar demonstration mode, and the telematic control module can't communicate because I think it was three it's 3G and there's no 3G towers anymore or something like that. And there's no update available from GM. There's no information at all. You know, the only way, even talking with the manufacturer, the only way to shut that message off is to hit the OnStar button, have OnStar answer, and say, hey, take this out of demonstration mode. And you can't do that because the Telebatics control module can't communicate because it's a 3G network and there's no infrastructure for it anymore. I asked ChatGPT, you know, there's, I don't know, hundreds of thousands probably of Chevy equinoxes out there that have OnStar. I can't imagine that there's not a way to get that out of demonstration mode. So I asked ChatGPT, how how does one, when you can't communicate with a cell tower anymore and it gets stuck in demonstration mode, how do you get the car out of demonstration mode? And super knowledgeable. I mean, if you read what ChatGPT said, you would think, holy cow, this is exactly what I needed. Because it's telling you to go into SPS2 and it's telling you to, you know, make this adjustment or reprogram this module and everything else. Absolutely everything that it said was wrong. Uh absolutely everything that it said, it it hallucinates. It it tells you things that that doesn't exist. And I don't remember what the the circumstance was, but I I played around with it for about 45 minutes or an hour, went into SPS2, you know, attempted to do some of the things. You know, I I think one of the things was it wanted to reflash a module differently. What it said didn't make any sense. And what it said to do is not even possible with SPS2.

SPEAKER_00

Yeah, I remember I remember the drop-downs, the the the stuff that was supposed to be there wasn't there. And that SPS2, that's franchise dealer level software. I mean, there is nothing above that, right? As far as I know. But I mean that's OEM Chevy software. So if that can't do it, then you're pretty much SOL.

SPEAKER_01

Right. Yeah, and so we ended up disconnecting the telematics control module. The only reason that we didn't want to do that was because that telematics control module also links as is how you connect a cell phone to it so that you can talk, you know.

SPEAKER_00

Hands free.

SPEAKER_01

Hands-free, basically. And the customer, you know, wanted to try and keep that. So that's why we spent so much time trying to correct the on-start demonstration mode. So we uh essentially gave the customer the option of we can leave it the way that it is, so you got a message every time you start your car that it's in demonstration mode and you'll still be able to use your your phone, or we've got to disconnect the telematics control module so that that message stops, but you're not gonna be able to connect your phone via the hands-free of the car. The the point is that shops are not charging for diagnostics when they should be. And some of that stems from the fact that customers can buy these cheap OBD tools and diagnostic, I wouldn't even call them diagnostic tools, code scanners, and try and use Chat GPT and and so forth. And all of a sudden they think that they're, you know, they've got the answer before they ever come to the shop, and that's just not the case. Uh you know, someday maybe, you know, I mean AI is getting more powerful every day, but it it's still, you know, as long as it's hallucinating and it's it's giving false information, and you know uh you have to train the customers that you might be talking to a super intelligent computer or something like that, but it it it doesn't know. It doesn't have the answers.

SPEAKER_00

It's not correct all the time.

SPEAKER_01

No. Probably not correct most of the time.

SPEAKER_00

Yeah, I would agree most of the time.

SPEAKER_01

So based on the fact that automotive repair is as complicated, maybe possibly more complicated than the other trades, you know, I I think it's safe to conclude that you know, an entry-level technician in any of the other trades is starting out at $28 an hour. And uh I think that in order for the industry to attract and retain technicians, in my opinion, flat rate needs to go away and actually be paid similar to how the other trades are paid. That's why technicians are leaving is because they want they want more money. Um, you know, and there's a lot of flat rate technicians out there that love flat rate and they make a killing on it. But the majority, I mean, I I did we did that posted that video uh about flat rate, and everybody is all up in arms about, you know, if you adjust book times or anything along those lines, then you're screwing the technician and and everything else. And I don't I I agree with that. But the automotive industry has an issue when an industry any industry has an issue when you have employees dictating how the business operates.

SPEAKER_00

Employees influencing business decisions is an issue.

SPEAKER_01

Yes. You know, obviously the culture, everything else, all plays into the business. And if you've got a poor culture because of flat rate or because you know technicians think that you're pulling money out of their paycheck, which happens with flat rate, that's not a good culture, and you know, that affects the business at at the end of the day. So, you know, at the conclusion of all of this research that I've done in the last you know few days is there's no doubt that technician wages need to go up. For technician wages to go up, auto-repair shops have to actually start charging for the work that they're doing. And not, you know, not racing to the bottom, not throwing coupons in front of people, not you know, because sure the other industries and other trades will have, you know, maybe maintenance specials or what have you, but they don't discount their work. You know, and and they also don't sell it on a parts and labor scale, or this is how much the part is, this is how much the labor is, and this is gonna be what your total amount is. They're they're not selling a commodity, they're selling a solution. You need a furnace, it's gonna be six thousand dollars. There's a lot of regulations in auto repair, you know, or or state laws or what have you, that you have to detail parts and labor and all of this good stuff, which is fine, but you can detail that on the invoice, but it needs to be auto repair needs to focus more on customer solutions than it does on parts and labor.

SPEAKER_00

Yeah, and another thing to keep in mind too is auto repair is I mean, that's that has a reputation for taking advantage of customers, but your HVAC technician and your electrical guy, and uh you have an issue with your furnace, uh does it really need a whole furnace? I mean, that it it happens across all trades, it's not just auto repair. There was actually an advertisement I heard on the radio, uh basically, long story short, it said if someone quoted out a whole new for furnace for your home, give us a call and we'll give you a second opinion. So it happens, that's evidence right there. I mean, that is one business acknowledging that that is a possibility and that it does happen through an advertisement.

SPEAKER_01

Yeah, and I don't think um we've said this before, most shops I don't believe are crooked. I don't think I mean there are shops out there that are overselling and quoting out things that that don't need to be done. You know, we we just had uh Ford Expedition come in that they quoted every flush under the sun. You know, just let's throw everything at them and see what sticks, and if we get one of the five, then great, you know, that's that's revenue, which you know, I I think that's bad business practice myself. I think you you focus on the problem that the customer is having. Um you can talk about maintenance, absolutely, but to to start going to customers and say, I don't know if you've had all of these services done and you need to have every fluid in your vehicle flushed, I think that's a poor way of doing business.

SPEAKER_00

Not only that, they quoted out uh a valve cover because the VCT solenoid that was seeping around it. And they said the right front upper ball joint was loose. Um and we loaded the suspension, I mean checked it several different ways. There was absolutely no play in the upper ball joint. Yeah so I mean the the I uh when when we called them, I I literally told uh Alan to iterate that uh I mean you can do it if you want, but you could it it's just seeping. It it is not something that needs to be done, and there's absolutely no play in the upper ball joint. And to change every fluid in your car just because it hasn't been done or they don't know if it's been done, it is asinine to me.

SPEAKER_01

Well it's it's it's a maintenance decision, is what it is. I mean, some customers, you know, we have customers, uh one customer that, you know, he wants his fluids changed on the service intervals every single time. And I'm all for that. Absolutely, fluids should be changed. But if you're going to have especially a first-time customer come into your shop for an oil change, and you say that, okay, we did your oil change, Mr. Customer. You know, you need an air filter and you need your transmission fluids flushed and you need your brake fluid flushed and you need you know your coolant flushed and all of these flushes, uh what what's the perception of that customer? They're they're just trying to sell me stuff. They're n nickel and dime me, you know.

SPEAKER_00

And yeah, not not only that, that should be mentioned too. That was a franchise dealer, a Ford dealer. Yeah. Uh I mean that that so it it it doesn't matter where you go. And I I've honestly noticed a lot of a lot more stuff like that from franchise dealers than independents myself.

SPEAKER_01

Uh yeah, and I think I mean a lot of it has to come back, comes back to that flat rate too, where you know the the technicians are and it it's not it's not even technicians' faults because a lot of times it's the service advisors that are making these recommendations also. Just, you know, let's let's um again throw everything at them and see what sticks. And you know, if we can get one of the five flushes that we're recommending, then we're generating revenue. And and again, I'm not opposed to changing fluids. Fluids should be changed, but I think it's worth having a conversation and finding out what the customer wants it. But to tell them that they have to do it because they're you know, if you don't do your transmission flush, you're gonna ruin your transmission, sure. Over the course of 150 or 200,000 miles, that's absolutely the case. But you know, to I guess to recommend it, everything all at once, and and ball joints that don't need to be replaced. And uh, you know, a seep is a whole lot different than an active leak. And you know, if you're there are some customers that would say, absolutely replace that valve cover. You know, a seep is a seep and it's leaking, it should be replaced. You know, some customers will want to go to that level. Other customers will say, well, what do you mean by it's seeping? Well, there's no active leak. It is not actively losing it. There's just a little bit of oil residue on the on the seal. So you at this point it's something to keep an eye on. Our recommendation would be to keep an eye on it, clean it off, let's see if it looks the same the next oil change, or is this over the course of 150,000 miles that this thing has has started to look like that? Educating the customer is is a very important part of automotive repair, and letting the customer decide if they want to change that valve cover, nothing wrong with mentioning that it's got a seat. That there's a little bit of, you know, we see oil residue. Oil should stay inside the engine, it shouldn't be escaping. But is it something critical that needs to be done right now? No, absolutely not.

SPEAKER_00

Yeah, it will not affect day-to-day driving or and that will not cause a failure or leave you stranded on the side of the road.

SPEAKER_01

Right. Technician wages need to increase. There is no doubt about it. In order to keep up with the other trades, technician wages have to increase. But in order for technician wages to increase, you know, if you look at the cost of labor between the other the other industries, you know, it's pretty comparable. The cost of labor in automotive repair versus HVAC contractor, plumbing, electrical contractors, the businesses are making the same amount of money, generating close to the same amount of labor cost as a percent of revenue across the board. So it's not that the automotive repair industry is paying technicians less and throwing the extra money in their pocket. That's not the case at all. They're all consistent as far as the cost of labor versus percentage of revenue. The problem is, is there are so many businesses out there, probably because of the lack of licensing, the lack of you know, certifications or what have you, that the barrier to entry is so much lower in automotive repair, so there's so many more shops, and it's a race to the bottom. You know, and I'd like to say I think that's changing. It's changing from our perspective anyway. We charge a fair labor rate. Um, but even at our labor rate, we pay higher our technicians higher than the industry standard is. They're making, you know, closer to pretty close to what the the other trades are making in our business, but in order for that whole for the whole industry to get to a point where automotive technicians are making a comparable wage to the other trades, labor is going to have to go up. And that can be a combination of lays raising the labor rate, maybe putting a labor matrix in place, or just doing category-specific labor. I mean, we have a higher diagnostic labor rate than we do our general repair labor rate. And I almost think that we need to go a step further and have three labor tiers, one for diagnostic, one for internal engine transmission repairs, and one for your general maintenance. And then you have the technicians that are capable of doing those different levels of repair work, and you know, then technicians can get paid based on the level of repair that they can do. You know, and as you go from a CTEC where you should be making, in my opinion, $28 to $32 an hour, because it should be, it should be equal with an entry level in the other other trades, you know, and then a BTEC should be, you know, $32 to $40 an hour, and C Tech should be $50, or I'm sorry, ATEC should be, you know, $45 to $60 an hour. You know, I mean, it's based on the knowledge of the technician, should determine how that technician gets paid. But the race to the bottom mentality and the discount mentality and the no charge for diet mentality and the mentality of the automotive industry as a whole is what is preventing that. So until that changes, you're not gonna see technician wages change, and you're gonna see technicians leaving, not entering the field and and continually being keyboard warriors on TikTok. There's gonna be a lot of kickback on lay raising labor rates from auto repair shops, I think, too, because they're gonna say customers aren't won't pay that, you know. And obviously, customers are visiting automotive repair shops two to four times a year. You know, they're getting their oil changes, they're doing maintenance and stuff like that. So two to two to four times a year is probably average that a customer is bringing their car in to have service done on it. Whereas the other trades, you're talking one time every year, one time every two years, you know, electricals probably one time every three years. So there's more opportunity to disappoint the customer in the automotive repair world because they're coming more frequently. The low barrier of entry, the untrained technicians that you know are working in the in the field, the untrained owners, the untrained service advisors is diminishing the value of good automotive repair shops.

SPEAKER_00

I mean, a good example of uh, like you mentioned, our diagnostic labor rate is heavier than our just normal auto repair is that Dodge with a 5.7 that wouldn't start that was towed in. I spent an hour on it, got it running. Um basically just got flooded somehow, needed to be cleared out. But in that hour using a scope, I knew compression was good within about five minutes. I mean it using a scope, and then I got it running. It was misfiring on four cylinders. I already knew compression was good. I've seen broken valve springs on them, and that obviously wasn't the case because they had compression. Used the scope, checked injector signals from the computer, um, checked ignition coil signals from the computer, making sure that they were firing. I could actually using the scope, I could see that the cylinders that were misfiring were burning somewhat. So after I did there was other stuff that I did, but I took it for a drive and everything cleared up.

SPEAKER_01

So I mean that truck was sitting for a long time too before it came in. We towed it in because it had been sitting.

SPEAKER_00

Yeah, yep, but I mean that's a good example of in that hour. I mean, I didn't use a mechanical gauge and spend two, three hours going along every cylinder. I used a scope, used an amp clamp, and measured the starter current as it was going, as each piston was coming up on the compression stroke. Relative compression, yeah. Looking at the waveform and looking for anomalies. I mean, and that takes five minutes. You know what I mean? So that's I'm familiar with how to use those kinds of tools, so I can tell you a lot about your vehicle in about an hour. Yeah.

SPEAKER_01

And and the the problem is is a lot of businesses, a lot of repair businesses aren't aren't to that level yet. And that's where you get the technicians, you know. And we're hypothesizing or we're guessing when I say that, you know, that very well could have gone to another shop and they could have threw everything at it, plugs and wires and you know, just threw a bunch of parts at it when you verified basically that it didn't need parts thrown at it. It needed to be driven. Driven.

SPEAKER_00

Yeah, yep. And I I did pull plugs, looked at them. Um they they were carboned up, but they weren't like bad, bad. But I I came to the conclusion it needs to be driven. I drove it and it would it's been fine. Yeah. I mean, that's that's the power of diagnostics. I mean, I I came to the conclusion that there is no reason the cylinder should be showing a misfire, and after driving it, it cleared up. I mean, that was that was the conclusion I came to. It didn't need anything, it just needed to be cleared out.

SPEAKER_01

Yeah. From a customer perception standpoint and charging a higher labor rate until shops and technicians get the training in order to be able to accurately diagnose and repair vehicles and solve customers' problems, that's where most of the customer perception, you know, negative customer perception comes into play is because shops aren't diagnosing the cars properly. I think that the majority of customers, I mean, we're our labor rate is higher than anybody else in town, as far as I know. And we have no problems having customers come in, you know, and you can charge a higher labor rate if you're charging if you if you're providing the value behind it. I mean, we don't have and when I say we don't have comebacks, uh obviously we have part failures and we have stuff like that, and things do happen. We're not a perfect shop by any means. I mean, there are comebacks, but when we have comebacks, we take care of the customer, and the comeback rate is extremely low.

SPEAKER_00

Yeah, it's not very often at all that we have comebacks.

SPEAKER_01

Yeah, and it's because we're doing quality diagnostic, we're verifying what something needs prior to doing it, and our customer perception from our customer's point of view is is high. People refer us and say, hey, go to these guys because they know what they're doing. And when you get to that point, you can charge a higher labor rate and you can pay your technicians better. Until the industry stops with the race to the bottom and actually starts caring about their craft and not just throwing parts at cars, when that happens is when we're gonna r raise the industry and be able to pay technicians more. If shops would just get out of their own way and start just learning and understanding how to run a business and understand how important training is, it could be turned around pretty quick. The the excuse that customers won't pay that is is not a valid excuse.

SPEAKER_00

If you think the customer won't pay that, you're probably not worth that. As hard as that is, they're probably here. Yeah.

SPEAKER_01

Yeah, yeah, that's a good point. Make yourself worth that. Exactly. And if I I think there's a saying, if you think you can't, you're right. You can't. You know? Yeah. It's just, you know, know your value and have to raise the bar.

SPEAKER_00

I mean, I I have a lot of fun working on modern cars. I I enjoy it. I'm efficient with it. I don't have I mean there's you get the occasional car everyone does, you beat your head up against the wall trying to figure it out, but I have fun with those kinds of issues. I mean I I like a vehicle that is not a pattern failure, has a goofy one-off issue, and you'll probably never see it again. Though those are my favorite things to to work on.

SPEAKER_01

Yeah, and I think I think a lot of a lot of diagnostic techs enjoy that very much as well. I mean, I think that they genuinely love solving problems and they love figuring out complex issues. The problem is they're not being compensated properly for it, primarily because, and I shouldn't say all of them, but primarily because of the flat rate system, it's costing them money in order to do those jobs. You and I are business owners, we own the business, we're essentially on flat rate because whatever we build a customer is you know what the the business is is making. There's many times that you'll invest more time into a vehicle than what is quoted out. And that's a hard thing to overcome because I'm constantly telling you that you you need to stop, you need to call the customer, tell them where where you're at and what else needs to be done, but you're so focused in getting that job figured out that you don't want to take the time to do that. And that's that's fine from your standpoint, you know, and it's it's a difficult thing when you really genuinely want to fix the car versus charging the customer. And I understand in the flat rate world that tech it's costing the technicians money, it's costing you money when you do that also. The problem is that's your decision to make because at the end of the day, it's you slash the business that is being affected when you don't call the customer and get up more approval time. But from a from a diagnostic technician point of view, when you don't get that additional time added on, they're not getting paid for it. And diagnostic technicians should 100% be paid for the time that they're investing on the car. Their knowledge and their ability to actually create a solution for the customer makes them not an easy person to find.

SPEAKER_00

Yeah, the the mindset for me, like going back to the BMW example earlier this week, um, just for a backstory, it's jumped around shops last three years. Um it's an 83-633 CSI, had an 88-89, that era motor, so uh that it was replaced. They were also told that the wiring harness and a computer for an 89 was put in it. It supposedly did run at one point. When we got it, it didn't run. And this was over the course of three years jumping around chops trying to make it right. When we got it, it took me about an hour and a half to make it run. Someone put a fuel pump in it and wired it backwards. So I pulled the pump out, cut and spliced the wires the right way, and then it would start, but it wasn't right. And after doing more looking, the wiring harness and the computer was still for a 633 CSI. They were trying to use components from the 88 and make it work with that computer and it like stuff like the front crank sensor, 62 teeth missing. It uses one sensor to verify TDC and know when to send injection pulls. You know, I mean all those things. They had that all rigged up, wired in, but it used two sensors in the bell housing from the 633, and the computer was actually using that. So why they were trying to make the front work with the old computer that wasn't able to interpret the logic, you know what I mean? The the the signal it was receiving. It so there's a handful of issues like that, and I went past my time on that because one, I got it running, and then I I got to the conclusion that they tried using 88-89 accessories for the 83 computer, and it's not capable of receiving and interpreting those signals correctly, and it it's it it's running a the wrong fuel map from i it'll run, it won't idle very good. It's just running an incorrect fuel map. It doesn't have the data that computer needs. If they were to do it that way, what they needed to do was swap that 88 engine as a long block and use all the accessories from the 83.

SPEAKER_01

Sure.

SPEAKER_00

That that that's what they needed to do, but they started mixing stuff, so it just needs to go back to an 83, is what it needs. Right. It needs an 88 long block, all the accessories need to be 83. I mean, and that's yeah, it's a matter of figuring out what has been changed, what has been done. They've there's been I was looking at it, there's several stuff that's been rewired. I mean, it's it's a can of worms, but when I came to the conclusion I did, that was when I called them and said at this point I can see that it's hours and hours, but this is the direction we have to go in if you want us to keep going. Yeah. Um, but that's a good example of kind of my mindset when when I go past it is I think, all right, well, I just found that. That took me an hour and a half, it doesn't run right. What else was done wrong somewhere else?

SPEAKER_01

And yeah, you just want to keep plugging wrong along and and find the find the solution or find what the problem is. So yeah, it's it's an easy thing to do. I guess my takeaway would be shops need to stop giving away diagnostics. Um I think that it would be a good idea to define labor categories and charge different labor rates for different jobs because uh a break job labor is not the same as the diagnostic labor. It's you know two different different things. Um advisors need to be trained. If you're going to change the labor times, advisors need to be trained to be able to discuss you know the different labor times. Honestly, I think we need to start pricing jobs. We still have to put parts labor, the detail on on the invoices, but when we're talking to customers about fixing their vehicle, we need to be selling the solutions and not parts and labor. You know, this is what you brought your car in, this is the problem it was having, this is what we need to do in order to solve your your problem and talk start talking about solutions rather than it needs this part in it, and you know, it takes this much labor to do it. So I guess it'll time will tell. Um, otherwise you're gonna continue to have technicians leaving and no new technicians coming into the field because the sentiment now is for the most part that you know technicians are telling other people that are thinking about coming into the industry, don't do it, don't do it. And it this is not an easy job. And it's hard on your body. I mean, it's physically demanding, it's mentally demanding, and quite frankly, the pay at this point is not what it needs to be, but it's not as bad as everybody makes it out to be. It really isn't. Um and if you have a passion for it and you have a drive to fix things, I don't think that there's a better industry that you could be in, in my opinion.

SPEAKER_00

As long as you go to a place that is a good place to start. Like if you if you go to a shady shop and start and learn there, I mean you don't really have to be taught how to take nuts and bolts apart and put them back together, but it's the diagnostic, the the actual troubleshooting of vehicles to find a place that has someone that you can learn off of. Yeah, that would be the place to go.

SPEAKER_01

Yeah. Well, that was another episode of the Automotive Integrity Podcast. I want to thank you guys for watching. And remember, cars are complicated, but integrity shouldn't be. Until next time.