What is really going on here.
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I work with and visit a lot of shops in North America. This past week a dealership that has a bodyshop called all of its employees out on the rug and gave their employees an “its been rough and it is going to get rougher” speech and asked their employees to work with them and they would get thru these tough times. The owners then called many employees in for one on one meetings. The body shop manager was one of them. They recapped what they had told them all in the earlier meeting and then announced they were going to cut his pay by $1000 per month to help them thru this recession.
Now this shop under this shop managers leadership has changed a lot of things in the last few years. They have managed to achieve slight increases each year, when other shops are in decline. They have stream lined the entire shop process and become more profitable. Those changes caused the manager to see an increase in pay to the tune of about $1000 per month thru profit sharing. And they just took it away.
Needless to say, he will be leaving. But it saddens me to see these dealership owners bite one of the hands that feeds them. It makes little or no business sense and makes me wonder what is really going on here.
I know all of you guys in North America are all feeling this recession to one degree or another. Have you considered cost cutting measures to this extreme? Do you know who is making you money and who is lucky to have a job? Would you make across the board cuts or really analyze each profit center to see what needs to go, what needs improvement, and what gets left alone?
I would appreciate your thoughts.
As always gentlemen: Opinions please!
Brad Larsen
Sounds like good ol greed to me. The dealership realized that there was more money out there to be made and they want it. They cant have someone making more money than the sales dept. Dealerships dont care about body shops. Their meat and potatoes comes from new and used car sales. If they make extra money from a body shop than they are happy, if not no big deal. Its not the bussiness they are into. Most of the time the owners dont care about anyone but them selves. Sorry for the rant, its just my opinion 😛 I do paint at a GM dealer too :wak
X2
Things are tough here …. I’m just a little guy , but from what I’m experiencing I can just imagine what the big guys must be feelin :unsure:
I hear a lot of that going on. My buddy that works a a place that locates and processes junk cars across the country. he took a 10k pay cut last year. he has made some deals that is bringing in the company more money than its ever made and they still havent brought his pay back up.
Years ago when I work for a shop my boss made the comment that the only reason he felt like I worked there was for the money. I told him to quit paying me and see if I hung around. It is nice to be appreciated and to like the people you work with, but ultimately the only reason any of us go to work is to pay for food, shelter, clothing and hopefully have a little left over after taxes.
Gentlemen as always: Opinions Please!
Brad Larsen
we never fired any employee or cut their pay, but if they weren’t productive or goofed around we didn’t increase their pay. i think thats the best strategy we had to keep the atmosphere competitive. unless they were just plain terrible and they went home for the weekend, we asked them not to come back on Monday unless we called them. lol
I think dealership shops (for the most part) are viewed and operated completely different compared to an independant. I’m sure alot of it has to do with the dealer principles lack of understanding, it’s an accounting nightmere for them and I’ve seen many dealers use it as a dumping ground making it look like it’s doing worse then it is. At any rate that’s not an acceptable incentive, unfortunate to hear..
In the nine years that I have worked at the dealer Im at, I have been told month after month year after year that the shop only breaks even or looses money. Either somebody is making more money than they let on to or they have been doing something wrong for a long time. I do feel that dealership body shops are a dumping ground or just a tax write off.
Well the thing with dealership’s is all parts get run through the parts dept so on the books the bodyshop doesnt make any money on those parts. Kinda hard to show a profit when 1/2 the repair doesnt count towards your department
This dealership allowed the body shop to make 25% on all parts. The shop itself was making profit based on his profit-sharing bonuses. Management claims that the dealership is losing money and everyone needs to tighten their belts. I am sure car sales are down, and possibly parts and mechanical sales. The body shop has not been shown the numbers from all depts. Still is it right to take part of the one guys pay who is a proven performer? If everyones pay was performance based, like the bodyshop manager, then they have a motivational and promotional problem in other depts and that needs to be rectified. Depts. losing money need to be put on a fast track to improvement. It is a little hard to eliminate any of the sales or service depts in a dealership. If you do then they cease to be a dealership. But you can eliminate poor performers who are drawing salaries.
It seems there is a socialistic trend in the USA to penalize the performers and give the lazy people a handout. Socialism is simply everyone being broke at the same level. It kills incentives to work hard and get ahead.
Gentlemen as always: Opinions please!
Brad Larsen
I think that what was being asked was completely unethical. Sure, I’m just a backyard hack, but in my day job – we’ve seen the same lack of leadership. Recently our administration has cut 2/3 of our support staff and recently let most of the cleaning staff go as well. Sure, they didn’t take a pay increase (and are now asking us for a pay cut) but when they are making six figure incomes it is sort of hard to not come off like a heartless bastard when you’re cutting off at the bottom.
To my way of thinking, this is the simplist solution for the guys upstairs (bosses, owners, share holders). They see labour as a fixed (and usually increasing) cost. If they can get you to work for less by tossing out a sob story, then they will (where are the books?). It keeps the share holders happy when the price of labour goes down. This sort of thinking got us unions way back and bought us lots of other troubles.
My Dad was the owner of a large machine shop and routinely took home less salary than the top machinist. The boys in the shop knew this as there was full financial disclosure (he’d do the numbers at lunch monthly). Never lost a single employee due to salary issues as he realized early on that a business is only about the people doing the work. Never had a need for a union as he paid better than union shops and had better benefits – sounds nuts, but it worked. Happy people work harder, take pride in their work, and are committed team players. This sort of thinking is a fast track to the bottom.
Canuck, I agree. The manager asked the owner point blank if he was taking a 12.5% decrease as well and the owner said the had taken an automatic decrease back when this recession first hit in 2007. He told the owner that he had worked thru that same recession and had actually five percent increases in sales and 10% more profit after inflation both years. His simple answer to that was that the rest of the dealership wasn’t fairing so well and that we were all in this together.
Over the years I saw a lot of dealerships let their best salesman go, because people would only deal with that individual (because he took good care of his customers) Dealership owners saw this as a threat because if the salesman left, so did most of his customers. So dealers (like insurance companies) took the personalities out of it and hired a bunch of college kids and a tough sales manager (that customers never meet) to sell cars.
Brad Larsen
im in md.god bless people shoveling their cars off.i have to work saturday but that will make a 300 hour week.that will set a record.repair time and ri time.
amen
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