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Episode Description

Technology has created a fast-paced, competitive landscape for your auto repair business. So, how do you prepare long-term while continuing to drive profits and growth?  Frank Scandura and Bruce Williams look towards the future with Bill Connor and Uwe Kleinschmidt in the latest episode “Future Proofing Your Business” and explore what is ahead for every shop owner in the next 3-5 years, plus how it will impact process and tool changes. Although not certain, there are trends indicating a direction, which continues to empower shops, and motorists to make the right decisions.

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Episode Transcript

*This transcript was generated using Artificial Intelligence. Errors may occur. If you notice an error, please contact [email protected].

BC: Good morning good afternoon my name is Bill Conner and if you’re watching or listening later on you’ve reached digital shop talk radio. And I’m here today with Frank Scandura of Frank’s European Service. One of our long time supporters and been on the podcast many times. And also Bruce Williams from River’s Edge Services and of course Uwe our Chief Innovation Officer. What we’re going to talk about today is the things that either might be changing in the industry that might keep the shop owner up at night thinking about what they’re going to do about it, or at least get them tossing and turning. So we’re going to talk about these things and how it impacts today’s processes and maybe even what tools we might need in the future. Although it’s not really certain what’s going to go on in the future because we don’t have a crystal ball, there are trends that are giving us a clear indication of what’s going on. And what we want to do is continue to empower the shops we work with and the motorists to make the right decisions about their vehicle repair and maintenance. So with that being said what I’d like to do is start down the path and we talked a little bit the other day about some trends in the marketplaces and what we want to do is identify about four or five of them, decide what are the top two or three, and then start going into some details. So that being said, let’s go ahead and start with Frank first and what are the things that keep you up at night about changes in the industry that you’re seeing or at least get you tossin’ and turnin’ a bit.
Frank: Bill, in all honesty, I’ve learned how to sleep pretty well. The things that I do think about is the trends of the government involvement in what kind of vehicles we should be driving – that’s going to be a huge deal. When California says “no more internal combustion engines after a certain time” how are we going to deal with that? Right? And then here’s one that I think of quite often – autonomous vehicles. Will the vehicle bring itself in for service? Will the vehicle tell me what it wants me to do? Will I send the vehicle back home on its own? That might be the one that’s constantly floating around in the back of my mind.
BC: That’s your top mile one, that’s good. So Bruce, let’s go ahead and get some feedback from you. What gets you tossing and turning or at least –
U: Can I ask Frank another question about that? When do you expect this is really hitting the independent after market, when do you think we should be prepared?
Frank: Now. And I’ll tell you why. Because there’s a lot of companies that are creating these autonomous fleets right now and they need service providers, right? And they’re looking outside of the conventional dealer network for these providers so I think we need to be in a position now to start looking at that and being prepared. How can I communicate because there’s nobody to call up and say “Hey, car #7 needs a service.” We need to be able to have a digital platform and an electronic platform -and I see Uwe’s smoke coming out of his ears right now – that enables this where you just know car #7 is showing up at Tuesday at 2:00 for x, y, and z.
BC: Thank you.
B: I totally agree with Frank, looking into the future autonomous is a real thing, it’s coming. Fast. A lot faster than I think most people in most shops expect. Like Frank says, having a network they can build and develop their own service network. There’s already one in place we just have to train and educate our people that we can do it. So shorter term is running a well oiled machine so you’re profitable. You will pay for proper training for your people and get everybody up to date so it’s not a shock when it comes in. We still see even in my small town shops that are writing their invoices on old school paper work order, and I don’t even understand how they’re in business anymore. From where we come to, especially partnering with Auto Vitals and just the electronic shop management software. You have to profitable in order train your people to be able to get the proper training in order to be available for what’s coming in the future. How many computers are in Mercedes vehicles nowadays? Things like that. It’s crazy. The amount of digital tools we need to be able to diagnosis these vehicles. And unless you’re profitable and run a well-oiled shop, you can’t keep up. It’s really difficult. That’s why partnering with you guys makes a big difference.
BC: That’s one of the ones that we need to go ahead and explore more in depth. Frank – not only for yourself, but you work with a lot of other shops across the country. What kind of feedback are you getting from them to stop this from driving them bonkers? How do we solve this?
F: Some of the obvious things are qualified help. We’ve got to change what we do, we have to create a consistent national apprentiship program. Napa’s got something out. Mike Davidson put something out. A couple other companies have put something out. But we need to all get on the same page. There’s such a gap, such a divide right now in quality of workmanship that shouldn’t be. Those of us who get those problem cars because we can fix anything, we see wires cut, you know, tied together with electrical tape on can networks. You can’t do that stuff. Proper training is definitely missing. So we have to get on the same page on that. That answer your question?
BC: Absolutely, so Bruce, are you seeing similar in the shops that you communicate with?
B: Absolutely in my mastermind groups one of the biggest things that I actually reached out to them about their challenges, one of the biggest answers is qualified personnel for sure. What I’ve found that has worked for us is – it’s a lot slower of a process – but we built them from the ground up. Really develop our technicians, we fly in a trainer that comes once a month. Costs us a lot of money, but he flies in from Vancouver and he sits down and we use our facility and we train on the proper diagnostic process to go through. Doesn’t matter if it’s the first computer system of the latest, the process works. The guys have really latched on and taken it. You pretty much almost have to build them yourself. There’s always going to be people trying to steal great techs, but the industry is now – I see a trend changing. People are proud to be auto technicians now. They’re not ashamed to say “I’m a greasy mechanic.” There’s a big difference happening, a big shift in the industry, that is really positive.
BC: Well we’ll go into both of these a little bit more in depth. Before we switch off to start dissecting these and what we’re going to do about it – Bruce, I know you said you talked to your twenty group about these challenges, or opportunities as I call them, that they go ahead and give you another one besides that and then we can put them in order and start dissecting them.
B: The only other one that I got that stands out was, especially now with Covid, is government help – grants – to restart, to get back on their feet. If they’ve had a tough time. Which we didn’t really experience ourselves much, but it could be a possible thing. Besides that, it’s all about technicians. Finding good help.
BC: If we could talk about government assistance, more about will they do anything to help us with the apprenticeship program and maybe would these be the top two that both you guys are seeing?
F: I don’t know that the government understands the importance of the apprentiship program. They understand the importance of getting people to work. I just recently connected with a gal here in Las Vegas that has a state program that helps people get off disability and back into the work force. ‘Cause maybe a tile guy is disabled because his knees are destroyed from kneeling all the time, but what else can he do? How can we rehabilitate him? I don’t know that there’s enough emphasis on a local level. Federally? Yeah. The federal government says “yeah, yeah, let’s do this” but I don’t think that there’s enough emphasis locally. Bruce, you’re in Canada, right?
B: That is correct, yeah.
F: And Canada’s got a really good program. You cannot just work on cars unless you’re properly trained and licensed – is that correct?
B: That is correct, yeah.
F: And in the United States, you can take any j’moke off the street, give them a wrench and say “go put brakes on that car” and not have a clue if he’s ever done it before or if he’s doing it correctly. And that’s gotta be frightening for people.
B: Right, and we do have a bit of that problem as well. We’ve got great standards and great programs but again, some guy can just start a shop and if people are willing to take their car to him, you know, he’ll have nothing to back him up if anything happens, because he’s got no license but it’s possible to happen for sure.
U: So who is….
B: It’s really about educating our customers.
BC: So Uwe before we start dissecting these, do you have anything that we’ve collected internally that we’ve seen going on that we need to go ahead and talk about in this list before we start going into some greater detail?
U: I would love to put on the list how digital interaction has changed, digital communication has changed motorist interaction and where is that going to go? And, as a separate topic, maybe two topics, one is we see a clear trend to multi location owners. And it’s not a franchise system. Right? So why is that? Where is that going? And the other topic is the focus on process and helping with digital tools to create a repeatable process and, more importantly, money to it. In my opinion one of the trends in the last three, four years, and it’s not just digital inspection. Where is that going? To what degree does an independent, what are the challenges to run a smooth operation. Because we haven’t solved everything yet, I’m sure.
BC: Awesome. So it’s fair to say in my assessment that all of these items are going to take some innovation so what I’d like to do, because Uwe’s our Chief Innovation Officer, why don’t you go ahead and choose one and then let’s go ahead and dive in and dissect what is the impact on the shop today and in the future, how it impacts the end user motorist, and what processes or tools might be needed. So if you want to go ahead and choose one then let’s go ahead and get these guys to open up and give us some information.
U: I would love to start with the technician shortage, and the qualification and education. It seems to be something no matter what shop you are, where you’re located, that keeps people up at night. And it’s interesting to me, often independents the name means “I’m the lone wolf fighting for my market share in my location. I cannot recruit any more because there’s nobody to recruit.” And how the network of independents now can come closer together and build a foundation for the future industry. Right? That seems to be, I mean there are so many organizations out there, but it doesn’t seem to help and to create an apprentice program which is carrying the weight it should. Does that make sense?
F: It does, and I think it kind of ties in together with being multi-location. Right? Some guys just don’t want to, they said “I like going into the office at 7:30. I like turning on the coffee. I like doing this, I like doing this.” And that’s fine, but here’s what’s gonna happen: you’re not going to be able to attract true talent if you don’t have a path of advancement for them. Right? I think the days of just coming to turn wrenches is four or five years before I move on are gone. I think we need to truly provide careers for people. And I think that’s what’s missing from our industry. I was talking to a young man yesterday, started out his career as an automotive technician and his mindset was “I don’t want to be a mechanic for my whole life so I’m going to go to school and do something else.” And that’s kind of the problem, there’s nothing in the future for them. So if I can’t generate four, five, six, seven, eight million dollars in sales a year, I can’t afford to do what those young people are looking for. Today they want flexibility. They want to know, you know, “I don’t like getting up early, can I come in at nine and work until six or seven or eight?” Well, can I provide that? No. Because my head is stuck in eight to five, eight to five, eight to five, eight to five. So what do we need to do as an industry to change and adapt to what the needs are for the young people now that can come in. So I could start you off as a tech, just general service, we’re going to get you trained and if you can learn to diagnose and then you’ll become a diagnostic specialist and then look I’ve got four locations, I’ll need a shop foreman over here then I’ll need this position over here then you’re going to get to a certain age and we’ll have you teach the other people and then what does that look like? And providing retirements and things like that for their future. I think that all kind of ties in together. I don’t think you’re going to be able to truly attract the best people if you’re doing five or six hundred grand a year and just kind of, you know, happy making fifty grand a year as an owner. I just don’t think that’s a good plan for the future.
BC: Well if you’re defining a career path is what we really need to do in the digital shop because that’s where everybody should be – in the digital shop environment. As a complete success solution do we start out by defining roles and roles that might have some overlap initially but as you grow a defined role. So I have an inspector, an estimator, a technician, an employment booker and so on. So Bruce, do you have specialized positions within your shop and is that a way that we need to start thinking about going? Not just focus on technicians but an overall career path in the automotive industry all the way from cradle to grave, so to say.
B: Right, yes. Well, we just implemented the production manager. So we have three service advisers, production manager gets to oversee it and make sure all the steps are getting done between them and the techs. And then with the six techs, one of them is the lead tech of course, a foreman. But I can definitely see, like Frank was saying, as growing there is a need for these guys to see somewhere that they can advance to, for sure. Just like in any career. And multi-locations or expansion can create that, like Frank says. “Oh, I’m going to need a foreman out here. When I start that new shop I’m going to need someone to oversee.” And you grow and train key personnel to give them something to work towards. If nobody has a goal or an idea in mind, they’re just there punching a clock. When they have something to work for, it completely changes their attitude, their drive, everything. Seeing that opportunity, so we’re definitely seeing that. I don’t have a parts department specialist yet, but I think that is, I’m already finding that something where we’re losing some efficiencies, definitely. We’re fortunate enough that our parts delivery in this town is a half hour, forty-five minutes at worst. So it’s pretty good, but in some locations I imagine, Frank, you probably have to wait an hour to two hours sometimes for the parts.
F: Yes
B: And all of the big centers, so that kind of stuff being right on top of the digital process – and like you were saying, it’s not just digital inspection Uwe, it’s the digital process from start to finish. Which really ties it all together. Sure, we can all do inspections. There’s tons of other platforms. But the way it all brings it together with the whole process. The drop off, the setting the tiles in the right position, estimating, the ordering parts, the waiting for approval stages in the process really define who you can be and what you can produce in a day is what I find.
BC: Staffing really has a huge effect on a shop, especially when it comes to cost. Cost of these employees is going to be a lot higher. The investment that we have to do in them is a lot higher. So, what are some of the things that has to happen in the shop to go ahead and be able to get the customer where they’re will to go ahead and pay for those additional costs that we’re absolutely going to have to charge?
U: Bill, can I go back to the technician thing?
BC: Sure.
U: If that’s ok. Because we kind of now do a transition from technician to overall digital process and I think there’s one thing where I had a big “ah ha” moment a few weeks ago and I want to share that with you. One of the other rival shop owners approached me and said “Do you offer equipment and teaching for schools?” And so there’s a technician college in Ventura, it’s a two year program, they release about 160 people per year to the automotive field, right? And there was the question – are we willing to help in teaching them digital inspection and maybe process? And the reality became the following – a big OEM sponsors this school with $400,000 a year and basically takes a clear impact on what is being taught. And out of those 160 students, eighty were already interns for those dealerships of that OEM. Half of them. Right? The other, I can’t remember the exact numbers, but another forty with other OEM internships, and the rest were interning at a few independents or working at home depot. So that to me showed if there’s not a clear path – we talked about career path in the shop – I think we have to start where they get the excitement to working in the profession. If there’s no apprenticeship program that starts locally – and maybe that auto vitals network can do anything there. We have a few shops in that network, right? We’re working with Napa or whatever. Right? But that is where we clearly, to me, a short coming that the OEMs have seen where it starts and invest there. So how can an independent, an individual independent, and the answer is probably not much. But how can a network of shops have a similar leverage? What are ideas to get there, right? And how can AutoVitals help?
BC: The first thing the independent shops can do is they could stop going ahead and talking so bad about themselves and others in the industry where we don’t look so ugly to everybody.
F: I don’t know that that’s as big a problem, Bill, to be honest. I think there’s more good operators than not. But I think the bad operators get all the press.
BC: Yeah, that’s definitely true.
U: So Frank, Bruce, what do you think would be a good step in that direction? If you agree with me that this is a highly important thing to do to go outside of your shop walls, so to speak, and engage. And how could we help if, you know, magic wand.
B: I think working together is the first step. I know over at Transformers Institute we’re talking about creating some buying power with all of the shops in our network. And I think this branch into this school system is a logical step that should be added to it. When I show up at a school board meeting, or not a board meeting but the advisory board for the automotive classes – and I did that for a few years – and all the big shots from the dealerships are there, you know, just telling me when to stop. Just like you said, with the money, I can’t compete with that alone. As a group we can probably make a difference. As a group if we could even tie it all in together with a company like AutoVitals that’s a national company then it gives the rest of us national credibility. So I like your idea of giving $400,000 a year to local schools.
*general laughter*
U: What I also see – there’s a beauty about independents which is unrivaled. That’s the proximity to the community. Whether that’s location-wise but also be part of the community. Right? In my opinion, that’s a leverage which is unparalleled, no OEM can say that. No local dealership can say that because to be honest, local dealerships are not local anymore. They just have a location and have to serve fifty miles radius because of the consolidation of the dealerships. To make money leads to that consolidation, right? So this customer service proximity to the local community is incredibly important and not leveraged in this particular case. So maybe you don’t need $400,000. Maybe $50,000 is enough but you’re part of the local community and make a difference.
B: And maybe it’s even about money, maybe it’s about involvement.
U: Exactly. Yes.
B: How can we help? What do you need? Boots on the ground kind of help.
U: Right. Thank you for saying that. And we had that with Napa but it didn’t take off. If you were a local shop, and you used AutoVitals DVI, you’re willing to be available as an instructor for your local school, right? And if you do that, AutoVitals gives the equipment for free to the school. That was an idea where there’s a win-win-win in this. So building a network of AutoVitals users who are willing to go to their local school and say “Hey, I spent X amount of hours per month in helping and instructions of future technicians” would make a huge difference.
BC: Does it need to start earlier, though? Simple things sometimes work really well, like putting together a career path description and getting it to the schools for their guidance counselors to start talking about in the freshman, sophomore, junior years?
U: No, I agree with you. But there’s a chicken and egg problem. You can talk about it, but you have to have some evidence. “Hey look, we did this over there and it worked out great. Talk to my buddy over there that I play sports with and he through that career and look where he is right now.” We have to start somewhere and I would do that in parallel, is what I’m saying. The more evidence that we have that it works for the shops, the more we can reference it.
BC: And then as we get these younger people come in to the industry, stop treating them like shop cleaners and so on, and actually start using them to develop a career path because in the OEM that’s a real common thing. They go to the trade school, they go to the OEM. They do warranty work only, mop the floors, do whatever. And pretty soon they’re out of the industry because they’re burned out.
U: So are you saying that the apprentice program also has a kind of curriculum a shop owner signs up for? So there are certain things they apprentices should experience in the shop otherwise they cannot be an apprentice in that shop. So there’s a skin in the game aspect of it where the industry is helped as a result. If that makes sense.
BC: Absolutely. And the tendency really is in the industry, and I actually participated in a forum the other evening on this exact topic, the tendency is to focus 100% on technicians only – which we all need technicians. But they don’t talk about any other program. Service advisors, parts people, dispatchers and so on. So those people seem to get left out on the outside and we only recruit people into those paths when they can’t bend over a fender anymore.
U: Mmhmm.
B: It’s funny, my recruitments lately I just hired two new young service advisors to help with all of our work that we have. And they both were completely blown away that an automotive shop runs how we do it. Because their mindset is they think it’s just a mechanic shop and they’re just going to answer calls. Soon as they see all the systems and procedures we have in place the lightbulb goes off and they see a career in here. Because there is advancement, and there is targets and goals and all kinds of fun stuff. They couldn’t believe that an automotive shop runs like that. So I got instant buy in from them, they’re loving it. Having a great time.
U: So we should use that and have a little video and go to the schools for that, right?
B: Absolutely. A complete demo video shows the process of every person that we can log in and run a fun recreated demo. Show them what it’s all about and what it’s like. The customer experience side of it and everything
U: Right
B: It would be fantastic, and lightbulbs would go out.
U: And contrast how it was five years ago, ten years ago, and see how different that is now. And there’s a real career and it’s not just grease monkey image. Which is probably stuck in many of the young people’s heads.
B: Absolutely.
BC: As far as tools needed, then, what we need to work on is defining a career path and roles inside the digital shop environment. And then put together something that can be brought to these different schools. Is that correct?
B: Yeah
U: And shop owners who are willing to go to their local schools to get involved. They could with that material, the videos probably not their only thing.
B: Have a local DVD with all your shops. Start there, start growing, the digital inspection. And then start going into the local schools and then, really, we all can grow at the same time.
BC: So this would be –
U: I see also another trend and I have no statistic or evidence but schools save money and there used to be schools who ran an auto repair shop, right? Incredible. I don’t know of any right now. They save cost and energy. When we say local schools is it high schools? Is it technical colleges? Any vocational school? All of the above?
B: All of the above.
U: All of the above.
B: Yeah. You need to generate interest at the high school level.
U: Yeah.
B: My grandson just graduated with honors, 4.35 GPA and all of these accolades and doesn’t really want to go to college. Maybe he’ll go to trade school. Ok, good. But he’s never had any exposure to that up until right now, so he doesn’t really have a direction. So I think, you know, you start percolating those ideas like we used to do in the path – not back when I was in school when it was “put this kid in the mechanic class he’s no good for anything else”. I think that needs to be part of the path, starting that far back.
U: And I think if I’m trying to imagine how that would work, there’s also a clear portion of it which needs to show how the development from purely mechanically controlled cars to how computers and reels happened, and how that changed. And how the motorists changed too in their expectations. Trends which can be made, a platform for that video showing the job has changed completely. The only thing which is the same is still a local business. Part of the community. But the way it works has so many aspects changing. And that makes it very attractive for young people.
BC: This would be great to go ahead and summarize this topic if you wouldn’t mind, Uwe. And then we’ll take it to the facebook forum and we’ll start collecting information from the other 4,000 brains that we’ve got out there that really need to participate in that topic.
U: Ok, hopefully I get it together.
*general laughter*
F: This is gonna be a good one.
U: We need to organize a network of shops, shop owners, managers, who are willing and enthusiastic about teaching the next generation of not only technicians, but staff members in the shop and their particular roles. So I would see that as an AutoVitals job, reach out to them, find a group of people who are either already active or willing to do that. And then discuss what material they need to be equipped with to create the excitement. And maybe we start with awareness, to Frank’s point, right?
BC: Awareness is the number one step in the problem, that’s for sure.
U: Right. And create an excitement for “hey there’s a career that no one knew existed.” And then once there is a groundswell then we go to any type of school. And maybe their approach for each school has to be a little different. I can imagine that approaching a high school and approaching the college in Ventura I was talking about is probably different. And then if we could excite shop owners to sign up for, let’s call it, a digital shop apprenticeship program. Where there’s kind of a, you know, some framework for the curriculum clear. And then become instructors at the school and in return get apprentices and do that nationwide.
B: Yeah, do it.
U: Including Canada, that sounds like a feasible thing, not an outlandish idea.
BC: And if we think about this with the motorist in mind, right now if we don’t do this the motorist is going to have a lot of things happen. The prices are going to go up. The ability to get their vehicle fixed in a timely manner is going to go completely away. And they’re also maybe potentially going to be forced into buying new vehicles all the time because they don’t want to keep that vehicle thirteen years plus, which is what they’re doing now. So there’s a lot of stake for the motorist also. And if we keep them in mind, in this whole process, then I think we can be successful. So we could take that to the forum, we’ve all got some things that we can do on that. So let’s go ahead and dive into the other one on there. Actually, this is a good segue because what we talked about in the technician really has got the root of coming from the technology and the other things that we talked about. Bruce, if you go ahead and start down here as far as the impact on the shop that we already started a little bit on the technology, maybe we’ll continue from there.
U: I don’t know, Bruce, I’m not clear where Bill is going. What do you mean exactly, Bill?
BC: So we talked about the first thing we come up with that keeps them up at night and that is the changes of reliability in the vehicle, driven by technology, adas, telemetrics, and so on.
U: It’s an enormous feat, yeah.
BC: Yup. And so how is that going to impact the shops and let’s start down that path. How is going to impact the shop and the motorist and then what do we need to do to get ahead of this before it runs us over.
U: Can I add one more question to both of you? Starting with Bruce – in my observation, this transition from mechanically controlled cars to computer and wields has created an expense, especially for the all makes/all models shops on the diagnostic end. Which can break the book.
B: Right
U: So how do you, in all this J-25, 34 has changed the market a little bit, and yes scanners have gotten maybe a little cheaper but you pay for subscription on the back end. But it’s not only that, it’s also the knowledge about what’s going on and haters is just one aspect of it. Where do you see this going? I’m scratching my head and saying “one individual tech might not be able to master that.” And again, I say all makes/all models as a backdrop. Is there mobile diagnostician future here? And are companies doing this already? Or is it limited to certain aspects of the car only? Programming. Reprogramming. And stuff. Where the *coughing obscures audio* are even more expensive. So I just want to add that.
B: Right. There’s a couple trains of thought on that and I’ve got a friend in Edmonton in Alberta in my group. He started off as a mobile diagnostician, had his own mobile shop. Now he has his own shop and he only specializes in certain makes and models and very difficult diagnosis and that’s all he does. He doesn’t pretend to do them all, he doesn’t want the odd jobs or whatever. He is just for diagnosing specialty stuff. So there is these trends starting to happen for sure because it is big. So I guess looking at it from all sides there’s a couple options. If your shop is small and not profitable enough to afford all the training and all the tools to do it, there is an option out there. Or you expand and grow and charge accordingly. I was looking on the forum the other day and someone was asking if they should actually charge per diagnosis if the person gets the repair.
F: Of course you should. Who wants to know that for free?
B: If you don’t charge for diagnosis, how can you afford to buy the tool to diagnose? You can bring it down as simple as possible, but profit’s not a dirty word. Many people get in this industry and think they can’t charge because they have an emotional bank account. But you have to be profitable to buy the tools to train your staff to do it. And like you said, paid ask coming in for everybody and the multi platforms we have to do it, we just bought another two tools the other day. You just have to. But, if once you’re profitable enough, the decision is easy. If you have to think about “Oh my god I need to buy one more ipad for a guy, I don’t know if that’s possible” you’ve got other issues you should be working on to start with.
BC: You’ve got bigger problems than the price of an ipad.
B: Absolutely. You know my guys come to me start saying they’re acting really slow, battery time, and I just boom order three more, get them on the floor and let’s get going. Move forward. Implement. A man, woman, patient, king. Get it done.
BC: So are we talking about specialization within the shop or within a group of shops? Or where do we see the industry trending?
F: I see it a little differently. I see, um, we have a couple mobile guys out here. And, you know, when Frank’s gets to a point where they’re looking for outside help, the mobile guys are like “here”. Right? And what I see is a trend of what I see happening more and more is a centralized programming and assistance model. Autologic’s doing some of that right now. But we’ve reached their capacity pretty quick. But I see that centralized, true centralized qualified step by step “let me log into your computer, let me see what you’re seeing, put this probe on that wire, do this, do that, ok let me see the acidoscope patterns that you’re seeing oh look there’s your glitch.” Right? That kind of –
U: Remote. Right?
F: Remote.
U: Centralized meaning…
F: Centralized remote. I think that’s going to be more the trend. The days of, you know, “let me check your car out for free” have got to come to a grinding halt for the reasons Bruce said. I just paid, not too long ago, I think it was last year, my subscription for my Mercedes Benz entry scanner. $16,000 for, like, three or four years. That 300 something dollars a month. That does not give me access to the website to download the documents and gather all the other information, gotta gather that separately. The days of using a generic scanner to look at a car, these cars are getting too complicated and things are happening very quickly. That’s just not going to be enough anymore. Another note we mentioned was just the other day, FTC came in and said manufactures that fail to demonstrate why they should be the only ones allowed to fix their products. And it’s telephones and it’s computers and it’s automobiles and it all falls under the Magnuson-Moss Warranty Act of 1974. And you’ve got to look it up and you have to understand it, it’s very complicated. And the FTC basically came out and said “yeah but there’s qualified independent service providers” so we’re going to see a big shift in the information that’s allowed to us. There’s going to be quite a few fights in the government over this. That’s going to, I believe, help. That guy’s got ten million dollars to invest in a centralized, remote diagnostic capability and all I have to do is spend four or five grand on the thing to plug into the screens or whatever. It’s going to be a game changer, it really is. I do see that happening in the future. If anybody knows anything about that let me know so I can buy the stock now.
*general laughter*
BC: We’re transitioning more to same as the medical industry is. ‘Cause they’ve got, you know, family practitioner and then they’ve got hospitals and then they’ve got surgeons and they’ve got specialists they go to when all else fails. They’ve got the morgue that does the delivery at the end. Everybody is, you know, we’re trending in that direction. We just need to go ahead and use some of the business models that have been laid out in front of us for them. They’ve got apprenticeship programs and schools and so on, and they start them out at a really young age. When they’re crawling, you know, you’re going to grow up to be a doctor or nurse or whatever. And we need to go ahead and adopt the same thought process.
F: So I think I see where you’re heading with this. So a car can come in three times for an oil change – er – oil leak problem and if I can’t fix it on the third visit I can refer them to the oil leak specialist.
BC: It’s almost getting to be this way and if you think about it we’ve got quick lube facilities that they’ve got things that they’re good at and a business model that works for them. But when it gets over a certain level they have to recommend it to go to a “hospital” which would be a Frank or a Bruce here to go ahead and go further. So we can lose some business to them as long as we know that we can gather up them people, their clients and stuff, for the things that are actually profitable for us. Although we’d rather do everything from bumper to bumper, realistically we lose some of them to these other types of businesses.
F: And we don’t do a good job of going out and introducing ourselves to those businesses and saying “we could be an ally and not a competitor and here’s how.”
U: So I would like to go back to diagnostic and bring up another topic in the context which is we believe that a lot of diagnostic works undetected because only if there’s an engine light people are going to plug in a diagnostic. And it’s expensive technician work, and so it advises often afraid of selling it, right? So it just gets bypassed. In other words, I believe, and I am not the only one that there is, today, an unknown amount of diagnostic work which is undetected. So I can tell you, because you mentioned AutoLogic, we are doing, right now, a little pilot project with Optus to enable the detection of this as part of the inspection process. As automated as humanly possible. So it just becomes part of your inspection process. It’s not diagnosing the problem. It’s detecting whether there is an opportunity for the service advisor to present it to the motorist and sell diagnostic work so the diagnostic technician on staff or somewhere else can actually do the work.
F: I think that’s brilliant, and I look forward to seeing that in action. I love the idea of pre-scanning a vehicle before anyone touches it, regardless of what it came for.
U: Exactly.
F: And then having those results available for the technician to do a quick analysis of and go “you know what, these three U codes are interesting because now I’ve got a communication problem. Perhaps I should make them aware of, they should be looking into that.” Whatever the case may be. That’s a very important tool.
U: And to be honest, if you look at the current inspection as a visual inspection, more or less, I mean, it’s more than that because we’re now in the great hunter and other things, right? And you have battery testers and blah blah blah. But this takes it to the level, let’s look into what the computer finds and has stored as a problem or potential problem. And not “let’s wait for the customer to see the engine light to come in” or “let’s wait for the customer to report a concern” drivability, or whatever it is, and then diagnose.
B: I always love examples, real world examples. And we had this exact example the other day. We got a 2017 Cadillac Escalade comes in to diagnose a noise vibration while driving. So while my tech’s driving it, the engine light happened to come on. So when he came back he said “well let’s just throw the scanner on it.” The engine light came on because it’s got a little bit of running rough that happened to do it while we were testing it, but there were seven other, like Frank was saying, some U codes and lane avoidance codes and parking sys codes that, like you said, doesn’t turn on a light. Nobody’s even aware of it unless it’s scanned. So perfect example of what Frank was saying. Part of your initial is a scan for basic hidden codes and then we can direct the diagnosis. Yes, we should do a diagnostic on this, it looks like it’s going to become a bigger problem. We’ll make you aware of this. And give the customer a choice.
U: Yes.
BC: Well, really, this needs to be an all systems scan. So this isn’t taking it and over to a generic scanner and put it in there. We need to know all the modules, number one. And number two our service drivers need to start reconveying this to the customers – these are safety or reliability codes. Because you see too many times where vehicles are driving around with TPMS lights and these other lights on and then the service provider is saying “Oh well you can drive the car without that.” Well, the government mandated it to be there. So this is a safety or reliability code, and this needs to be addressed. So the mindset for some service advisors needs to be addressed in this picture also. And if we could make it to where the customer gets the information and then comes to the shop when it doesn’t get presented and says “I’ve got these things on, and it says safety or reliability on it, you know, can we get this addressed?”
F: And especially to Bruce’s point, what if you had collision avoidance codes?
B: Mmmhmm.
F: Right? Next thing you know the car’s getting wadded up, and could that have been avoided?
B: And one step further, which is while it was just at ABC shop,
U: Right
B: They looked at it, and then there’s evidence that they looked at it but didn’t tell the customer about it, are you actually on the hook for any of this now? So, you just, yeah.
U: Well the engine light comes on a day or week after the shop, is that to your shop? Why didn’t you find this?
F: Right, and you missed the pending code that’s been there for 37,000 key cycles.
U: Ok good, Bill we have seven minutes left and we haven’t even scratched the surface.
BC: So I guess to summarize that if you would, what are the tools that we need to go ahead and get to the shop before this? Do we need to go ahead and explore some, maybe taking it and working on some inspector sheets that go ahead and have some of these new technology in them that are available to others working as a team? Do we need to go ahead and, what are the things that we can do to help in this process? We can’t stop technology from coming, but what can we do to –
U: In this particular case, if we really talk about diagnostic, we need to find a way where the inspection, as you said, is in all systems and gives a health check in the least possible time. Because we still have the problem that service advisors might cherry pick and stick with what the customer’s coming in for. Right? And as Frank famously said, a tech minute is $4.30 with inflation today is probably approaching $5.
F: Yes, $4.72
U: $4.72
*general laughter*
U: And our job jointly is to find the best process and the tool integration, in this case, the Optus, to make this happen. The bigger topic is, which I had hoped we can get into is what other elements between drop off and pick up, or even beyond need fine tuning addition or whatever. And new roles like the production manager. It’s actually funny, I have to tell you a short story. I went to a collision shop to watch their process and the guy uses the role production manager like it’s the most normal thing on the planet. So it’s really interesting. So it’s not something completely new, right? So what’s more out there? And I don’t know, I’m sorry I cannot summarize it for you, Bill, because I feel we need another half an hour to dissect this and see what we have achieved but what’s still out there. Maybe we have to do it next week or another time. I don’t know.
BC: Well there’s two things that would actually help us in that. One is that people go ahead and subscribe to the podcast on apple, google, or one of the other places on. So that way they can go ahead and continue the discussion. Be able to pass this podcast on to other people in the industry that probably need to hear some of the stuff that we’re talking about. Or go to and click the button on there to go ahead and send some information to us. Or go to the Facebook forum and continue this discussion on these two topics, or propose something else related to the things that are keeping you up at night. Let’s start dissecting it and continue going forward.
U: So can we –
BC: Plenty in the industry that keeps people up at night.
U: Yeah. So Bruce and Frank, if you enjoyed this today, I don’t know when the next available time slot is, but I would love to continue doing that.
F: Anytime, just let me know. And I can’t find my calendar tab right now but just let me know and we’ll figure something out.
U: Sure, we’ll coordinate.
B: Yeah.
U: Anything the two of you would love to point out which we haven’t covered now and it should be a topic of the next session? I personally, we haven’t talked about motorists and their actions. And that’s –
F: You know, that’s a big one.
U: That’s close to my heart. And I would love to go more into it, but I don’t want to –
BC: And we really haven’t talked a lot about the processes in the shop that have to change on not only the topics we’ve already discussed, but there’s going to be other processes that as we go on into the future, they have to be changed.
B: Absolutely.
BC: I have shops asking me all the time “where am I going to go ahead and get a flat bay where I can put all this adas calibration equipment in? So, you know there’s all kinds of stuff that’s coming out that’s going to really drive us nuts.
F: I think it’s too early to start busting adas personally, so we can have that as another discussion. I’ll give you my thoughts on it.
B: Cool.
BC: And we’ve also got the transition to not only hybrid but fully electric vehicles.
U: Yes.
BC: That’s looming on the horizon. We’ve got enough topics that we’ll never run out of them. We just need to go ahead and understand what the change in the shops is going to be, how does it affect the motorists, what processes we need to change and the tools that are going to be necessary especially in our digital world as a complete shop success solution. How do we get ahead of the curve and make sure we stay there?
U: Yup.
B: And there’s always telemetrics too.
F: Right?
U: Oooo! Yes.
BC: That stuff. Uwe knows a little bit about that stuff.
U: My favorite topic. Actually, not anymore.
F: Not anymore, used to be. I would love to see us get back to the device plugged into the OBD2 connector that we communicate with the car. So let’s go in that direction.
U: Ok.
F: Alright.
B: Cool.
F: Great meeting guys.
BC: I want to thank you all for joining. You always got a lot of wisdom that you share, and we look forward to doing it real soon. And again, I’d like to encourage people to go ahead and download the podcast. Share it with somebody that may have the same opportunity for improvements that you do. Also Digital Shop Talk Radio I think we’re up to 120 something episodes in there. And there’s a lot of great wisdom in there from a lot of shop owners just like you.
F: Awesome.
B: Awesome. Well thanks for having me, it was great.
U: It was.
B: And I’m always available.
U: Awesome
BC: Alright have a great day and let’s all go make some money.
F: Be well, thanks guys.
B: Bye.

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