SSBR #126 | Auto Repair Business

SSBR #126 | Auto Repair Business


welcome to a new edition of South Sound Business Report we’re on today’s program we’ll be talking to the mechanic stay tuned hello I’m Jeff rouse thanks for being with us on today’s program and thanks also to Puget Sound Energy for its long term financial support of South Sound Business report on today’s program we’re looking at a number of independent auto repair businesses around the South Sound and we’ve seen some statistics from the Census Bureau and from the Bureau of Labor Statistics as well as the trade association it indicates from the year 2002 up through estimated through 2011 the number of shops is down from about 83 thousand to just under seventy six thousand estimated revenues and the number of individuals working as mechanics it’s also down Brian Smith is the owner of geek Harbor Automotive he’s also on the board of directors of the statewide trade association automotive service association lamington tell me about the health of the industry are things doing well or for the general repair business yeah they’re doing quite well I don’t think there’s been a more exciting time to be in this industry you know historically speaking we’re seeing obviously different things in our cars today from a technology standpoint the workload in our shops like mine life even in the current economic conditions now is it maintenance workers at repair work we’re seeing that the repair work took up a little bit whereas prior to 2008 when the economy started to suffer we were definitely seeing our business models change more for the maintenance oriented approach to our customers vehicles now people are keeping their cars longer for obvious reasons and what that’s translated to in businesses like ours is more repair work right right where somebody may have been attempted to trade a car in if they were faced with a fairly significant investment in the past that line in the sand has moved yeah they’re they’re hanging on with the cars and keep them on the road longer so they don’t have to go buy a new one of course the whole automotive industry is a little more than a hundred years old and it’s changed in the last couple of generations it’s now pretty much a global fleet Lisbon is to beat Detroit built all the cars that all of a Stroeve in this country and that’s not true anymore no yeah and you’re right the industry’s changed exponentially is it make it more difficult for people like your business it’s meet a challenging certainly but we’ve been in part of a very adaptable industry I can remember in the early 80s when the first computerized cars started coming into our base we were basket cases go how in the world we’re gonna work on these things and reality Opia is it there’s more technology and complexity in a lighting circuit and today’s cars in or wasn’t a whole vehicle back in the nineties right so again you look for adaptable and I know at the earliest times a more sophisticated computerization of vehicles the manufacturers tended to hold that technology very close to their own vest protecting their dealerships as that changed are you independent operators able to work on the as you need most definitely on information availability has been kind of a hot button in our industry for several years now there are some that will maintain that we don’t have the information that we need to avail boy and that’s simply not true us Brian let’s talk about the a sa the trade association what’s its purpose and what kinds of programs does it offer Don Lord of trade or excuse me automotive service Association of Washington is an organization of independent shop owners like us I think we have 500 or so here in Washington State we’re affiliated with the surface Association on a national level and basically the whole premise is to support member businesses help them become more successful I help them take care of their customers their employees and ultimately improve the industry as a whole so the strength in numbers comes because you can learn from each other you can perhaps group by on the services or benefits or something like that yeah absolutely in training you hit the nail on the head is first lane from each other right there are multitude of different things that make Automotive Service Association great and it need to be part of we have management technical training opportunities we have a discount extended services available to us but that Network you know whirring from fellow shop owners is really worthy than meat potatoes is I can tell you without any reservation that if it wasn’t for involvement in a sa if we were still here today there’s no way it would be the vision that we have our business congratulations on your success thank you thanks very much our program co-host Holly Smith Peterson is visiting another shop here in the South Sound and let’s take that report Robert you have a really interesting story you were the head mechanic at a local shop and when that shop closed you took some of those employees and open your own you mentioned that there were several factors that had hurt auto mechanics and their businesses cash for clunkers being one of them can you talk about that yeah the cash for clunker program designed to get polluting cars off the road offered people a trade-in for their old car if they would go out buy a new car and it was originally designed to jumpstart new car sales the problem was to qualify for a new car you had to have fairly good credit so the people that were truly driving clunkers didn’t qualify for the new cars so all those mid-grade cars with you know mid mid mileage on them were traded into cash for clunkers so people with older cars had to keep driving their older cars and the you know people with the fairly good credit went and bought new cars so all those cars that we would have normally been working on right now for their second or third owners were gone destroyed removed from the market so the upshot is that people who bought the new cars are under warranty people with the old cars can’t afford to repair them living a hole where the shops are correct you mentioned another factor to being insurance and the relationship between insurance companies and how they pay for things has also hurt your industry tell me about that yeah on the on the body shop side the way the way the insurance companies decide what they’re gonna cover and what they’re not going to cover and a lot of them now are pushing for people to use used parts or go to specified repair facilities and they’re trying to make repairs for as little as possible which is always good for them but not so good for you the consumer for example you get in a wreck and one of your wheels is destroyed you have to get one new tire well your car is all-wheel drive and has traction control system you have to replace all four so now you’re on the hook three tires that had a good 50 to 60% life on them just because one tire got hit otherwise all your lights are on and your traction control systems freaking out don’t see that of pain-in-the-neck kind of guarantees you have to deal with the insurance company on that they should pay for the other three tires but they don’t want to so that’s you know problems created by the insurance company trying to save a dime well how has you how has your shop in particular have been able to survive the recession so far opening in 2009 primarily we just really keep everything close to the chest try to pay cash for everything as possible and really watch everything we spend and be very careful about our competitiveness with other shops and still maintain a high quality standard so I try to be competitive with the dealership and use original equipment parts and try to avoid you know lower quality parts and we’ve got this problem right now a lot of people are really trying to save money and car repair because they frankly can’t afford to fix some things so they’ll go to the guy on the Craigslist and they’ll get their timing belt done and he won’t do the water pump because he saved him 120 dollars five thousand miles later the water pump fails the belt comes off the valves Bend in the engine and they didn’t save any money all of a sudden and that’s a big one right now is people trying to save money and it usually winds up costing them in the long run because they do something for the short term that saved them some money but in the long run it’ll wind up cost them you know cheap parts or cheap parts for a reason now you mentioned this your bed part of your bread and butter is European vehicles yes let’s talk about another niche which is the alternative fuel vehicles are those a growing business it’s very slow in this state we do get a number of flex fuel vehicles the problem is we don’t have any eighty-five stations in Washington State for the most part I think there’s two or three in the state right now last I checked and it’s a growing market and there the potential is out there we just don’t have that there’s a lot of biodiesel going around right now but with no standard for biodiesel you never know what you’re gonna get they don’t have an industry standard on how that fuel is filtered or anything so your hit-and-miss on the french fried diesel fuel i think you’ve mentioned too that with the alternative fuel vehicles they’re under warranty so they’re just starting to come out of market will there be four texts will there be jobs coming up for them or what kind of on the hybrid side of the system there there will be because with the hybrid cars versus an all-electric car you still have your gas powered engine the same thing that’s been around since you know the Model T you’ve got a gas-powered engine driving the generator to feed the batteries the battery packs and the generators and the electric drive systems have a fairly good coverage from the factory on for warranty the gas part of the system however is pretty much like a regular car so we still have the gas engine to deal with in the hybrid cars and their longevity is fairly good but one final question and you have mentioned the importance of hiring good workers and paying them well why is that why is that a part of your business employee retention is imperative for quality control if you have people in place that stay there you have good quality control everybody knows what they’re supposed to do and they do it if you change employees all the time your quality is really hard to keep track of because you never know what you’re gonna get you know one day you’ll have a great guy the next day you’ll have a not-so-great guy and it’s really hard to keep you know keep that quality up there if you have a lot of turnover so if you pay them well and you you know abuse them as much as possible bill I had to throw that in there you you you’ll have a better product in the end no matter what it is okay Robert Collier thanks so much for being with us today and sharing your shop so far on today’s program we visited two different independent automotive repair shops from around the South Sound and talked with their owners and their managers but beyond them and their employees there are other businesses related to the automotive repair world this is Mike white he’s an entrepreneur franchisee of Matco tools has been for four and a half years basically your job is to bring the tools of train to the mechanics or servicing our cars so you’re out talking with people in the shops and what kind of trends have you been observing in your time well the past four and a half years I’ve seen the shops go from say maybe six mechanics in the shops down to four I’ve seen shop owners come back into the shops and actually work on the cars themselves where before they were doing more the administrative and that’s that’s pretty much it I mean you know just the the downsizing a little bit of some of these shops is to squeeze on are people feeling the pressure of the economy absolutely and I mean we are – and you know I’ve seen guys they back off on their tool there there are tool purchases and some guys have a harder time making payments on the things they’ve already purchased so that is you know the biggest thing that I’ve seen you know in in the industry now your business Mike is basically a retail store on wheels Frank you take the showroom to the shop yes how does your business operate is are you dealing with the shop owners or are used to making sales to the individual mechanics both okay the shop owners here again with the shop owners that are actually in the shops still working will buy tools for themselves or if they need shop equipment you know scan tools and things of that nature they’d usually do the bigger purchases the technicians themselves are required to buy their purchase their own tools to you know to make their money so it’s I deal with both and sometimes even the service writers get involved because they may work on cars when they’re at home okay so that’s you know it’s it’s pretty much everybody at the shop and you go we’re in what I would call a general automotive repair shop you also call on body shops and what other kinds of accounts do you have in your route yeah body shops school districts golf course maintenance facilities just to name a couple any anywhere where there’s a mechanic we go to and maintaining equipment or providing service are these others customers are they showing signs of what we’re all facing in the economy absolutely absolutely the golf courses I’ve seen they have less usually most golf courses only have one mechanic anyways I’ve seen somewhere that some golf courses that are sharing mechanics now that I see that there they’re repairing more equipment though than purchasing more equipment is what I’ve noticed and the school districts I would say have stayed relatively the same I mean they they deal with our precious cargo that’s right kids on the bus or unimportant exactly so it’s I’m glad I know the technicians that work on my kids as bus but it’s so inside your truck what would your customers be seeing of what would they be looking for depending on the technician my newer technicians are going to be looking for more basic tools whether those are sockets screwdrivers ratchets and things of that nature or maybe a new toolbox the the older technicians are generally looking for maybe more specialty tools okay you know you know or scan tool equipment things that are specific to a certain job on it on a car give us an idea of the price range of tools basic tools and up through the scan equipment I you I think you mentioned that a good computer analyzer can be $50,000 or more absolutely and there’s um but they also you can start with a basic code reader you know that cost you a hundred bucks but that can also help a technician out to get him you know to solve the problem with the vehicle and a good socket set or a good toolbox we have tool carts that start at $200 and I’ve got one on my truck right now that retails for 12,000 well so your typical request might have changed a bit over time but you’re still finding good customers out there absolutely the technicians that are in the shops now I think are fairly stable I think the economy has probably already washed out any that we’re not quite as strong correct and I think that what we have now is I don’t I don’t believe we’re going down any further I think that I’m seeing you know the shops come back the past six months have been my business has been tremendous it’s been it’s been fantastic so I the only reason my business is that way right now is because the shops are busy thanks for being with us okay quite you for having me Matco tool route sales here we’ll be back with more of our program after this word from our sponsor Puget Sound Energy for more than 12 years Providence st. Peter hospital has been partnering with PSC’s energy efficiency program as a result in the past year we’ve been able to save over 700,000 dollars on our utility bill what PFE of doing by investing in renewable energy and wind farms is really an investment in the future we’re in the community and on call for our customers day or night PSC is looking hard to provide me and my family with dependable service the college is celebrating its 70th anniversary how long is this program been around and what’s the growth in like the automotive program here at Clover Park has been around almost 70 years I don’t know exactly how long but it’s been a major part of clover Park in vocational education here the enrollment has always been steady I was a student here back in the 70s and the program was full then and right now we have a two-year waiting list waiting to get into our automotive program here at Clover Park what’s the capacity what are the numbers right now right now we’re running a full capacity we’re running approximately 20 students per instructor including our the body shop side of the house we have somewhere around 200 students in this building and how many instructors there are six instructors for product auto technician instructors in two collision instructors and there’s a newer part of the program that you were part of setting up that is the hybrid program correct and can you tell us about that yeah we started this hybrid program about four years ago I saw that that industry was changing this was a car that was coming out that we really needed to be able to work on and I looked at the safety aspect of it these cars are operating at over 500 volts 3 phase AC lots of amperage and so it’s a huge safety factor so I wanted to make sure that we got students coming through clover Park that could go out to industry and work on these cars diagnose them correctly and do all of that safely what’s the student growth been like well like I said we have over a two year waiting list so the industry has always stayed very steady in employment has always been really good for auto technicians but for the hybrid part of it for the hybrid part of it we’re seeing a growth the first time I offered this class I only had three students the last time I ran it in the spring I had 16 students for that huge multiplication factor it is said you have already had students who are told you that they’re interested in going through the program next year correct it looks like I’m going to be able to run a full class once again next spring so what kinds of jobs are you teaching here what kinds of skills are these students going to come away with in both programs in the auto technician program the students that complete the degree program are going to be general repair technicians that they they can go to work at a dealership they can work at an independent they can work at at any of the tire shops and things like that but the people that come through the hybrid portion as well it gives them that extra piece where they can work at a shop that is specializing in hybrids so to work on the hybrid or to be in the hybrid program you have to first have experience with Auto Service correct to go through my hybrid section they have to complete an entire automotive program or have two years industry experience and then they have to pass my little oral examination before I let them in are there any specialized jobs for those who go through the hybrid program most of the dealers nowadays I’m sorry the most of the manufacturers have some form of electric or hybrid vehicle today and at the dealership level they won’t allow people to work on those cars without training in them so I’ve already placed a number of students at local area dealers that that sell hybrid vehicles and it was because of their hybrid training that they got from clover park okay and what is the future of the program look like what do you have in the works as far as the auto services we are continuing to grow the hybrid piece and we also have an alternate fuels piece and so we’re we’re experimenting with diesel and compressed natural gas and hydrogen when I taught the class in the spring we actually made some biodiesel and we also made some hydrogen and we ran a small gas engine on some hydrogen so it was kind of fun very cool depen the jobs could you get with that training once again with the alternate fuels thing especially with the diesel and the growth in vehicles that are producing diesel engines today you know it’s a much better market and so if you have training in net it’s going to make you a much more flexible employee it’s going to open up the possibilities for employment as well okay and finally just the automotive services industry as a whole where do you see that going in the next five years or so the I see it just getting better and better all the time the cars are safer they’re more dependable and they ever have been the technology the growth in the technology has been incredible today’s automobile has more sophisticated electronics than what it took to put the first man on the moon so where we’re starting to see people that are coming in that are more excited maybe not as mechanically inclined as they used to be but they’re very techno savvy and because of that they’re able to work on today’s car and it’s just gonna get more it’s exciting time to be in the automotive industry that’s fantastic to hear Wayne bridges thanks for being with us today hey you’re welcome Thank You Holly we have one more stop on our trip around the South Sound looking at some fine automobile repair shops today for program this is Mark Simon’s bar owner and operator of Ralph’s import Auto Service which has a location in Fife as well as this one in Lakewood beside him is his dad Ralph Ralph started this business in 1970 after coming to the u.s. from Germany before that Ralph what was it that I’m understanding that your background in Germany was tool and dye purchasing and how did that translate into an auto repair Wallace for mercedes-benz so in there so I just then in 1970 found interest in that and back then you know I mean it’s a if we had a good basic training you should but could do anything and so you started with all all models of automobiles or what was most back then it was it was mixed or domestic in the European semester but mota mystic in Europeans and then later on we find star which is bull man so mark I know that you initially didn’t follow your dad’s no into the shop Wow what did you do I was a food and beverage manager for golf and country clubs and into clubhouse management where locally here I worked with Fircrest Golf Club okay and as a general manager for Midland Golf & Country Club in Midland Texas I see that’s not quite like repairing people there what about it though is transferable the customer service end of it is you know I I grew up around the shop so mechanically inclined I was and always had a passion for vehicles and but I brought the customer service into our business a little because I had that extensive background with you know building customer service and and so that I guess that’s where I had Rolfe that you have in your mind when you started your business and he was just a little whippersnapper did you think maybe he’d come to it I kind of thought so but then it’s just this street got rougher and rougher and then he didn’t show much interest as a youngster you know I mean so it’s a yeah except the guy would go away but then later be talked about it and I’ve got 30 mm and there and I thought it was good for the business because you know it’s there that’s what the shop needed what’s their management skills and I mean so it’s which I didn’t have so so you were very successful in operating a business you now see your son being very successful in operating and yet it’s a different business in some ways isn’t it pretty much but but they’re not brought the customer base and I mean which is you know it’s trusting and it trusted him right away and I mean it’s no which was what’s good thoughts how do you see it different in today’s generation versus what you saw maybe when you were a youngster hanging around the shop the day my dad was a mechanic he was a mechanic and so he was able to build that trust level real well with his customers because he could explain to him the mechanics of it and and how the operation of the car was my version I didn’t know as much about the mechanical of the vehicle the mechanics of the car so I guess the biggest difference between what I saw growing up is the fact that he was working on the cars and I myself don’t as I work on the cars that much so we had to change you know that the customer base are real similar to the Country Club and versus you know what R and B in the high end you know Mercedes BMW their customer base was real similar to the country clubs to our business here so I I started doing more of you know building the trust through through explaining the costs and and and not so much on the mechanical and but more of the customer and what we’re gonna do for you you know pickups and deliveries rental cars some of those aspects that my dad did initially do a lot of back then and so that’s a you know that’s what a lot of customers are looking for these days or more the added benefits of why they have why they bring their car here the mechanic and is mechanical and is one end obviously they trust us because we you know know what we’re doing we’re on the cars but a lot of people can do that and so one of the things they liked about our what we’ve built here is the added features that go along with it well if you’re still able to walk through the shop I noticed and what do you see happening differently today than when you were operating the business well the thing is it’s a you know it’s you can’t be jack-of-all-trades and be good at it and so it’s it and that’s why you have to have the skills to hire somebody which can do the work for and have service advices which are the same the main thoughts and you see I used to be the mechanic the service adviser to Janet and I mean and his son didn’t sign on and it makes it tough to do to be a good mechanic she’s certainly cause she couldn’t because I’m not trading any other fields excepting the mechanic right so there’s some technology different now are the cargo should naturally use it now it’s all mainly electronically so it’s cost last come this is the last laundry and I mean they’re developed into fascinating to see two generations in one shop thanks mark thanks Ravi the to Simon’s for sharing their story with us today Holly and that’s our South Sound Business Report look at the automotive services industry we thank you jet sound energy for its long time sponsorship of this program and our special thanks to Richard Aronson and mobility media design for his assistance in the production of this program we’ll be back next week with another episode of south found Business Report and we invite you to join us tune in same time same channel you


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