The Intersection 6-12-22

Another industry crisis: Getting, keeping mechanics

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There’s the old saying about nothing being certain in life except death and taxes. Two other things that could be added are the ice cream machine at McDonald’s always being broken and dealership service departments never having enough technicians.

And before you wonder how valuable one category of employees could be at a dealership filled with all sorts of essential workers, Carlisle & Co. estimated that losing one tech costs a typical store $172,000 in lost revenue and hiring/lost productivity costs associated with finding a replacement. (There are no concrete figures on how much your local Golden Arches loses when it can’t make McFlurrys.)

That value to a dealership’s bottom line is why so much attention is paid to recruiting techs — from high schools, community colleges, trade schools and other stores — and retaining the ones already there.

Carlisle wrote a white paper stemming from its most recent Automotive Service Manager Survey that examined steps service departments are taking to keep techs. Of course, money is important, but it is not a cure-all. Read Automotive News’ Q&A with Carlisle’s Eliza Johnson about the white paper and its conclusions.

This month’s Fixed Ops Journal also takes a look at tech retention and what is needed to keep these workers happy and staying put. Dealership tech Russell Wickham channeled his frustrations with working conditions and workplace culture into a series of blogs and posts on LinkedIn that garnered a lot of attention and reaction.

Wickham also penned a guest column in this issue of FOJ on how dealerships can do a better job of onboarding new techs. And for techs such as Wickham who are seeking out better pay, more supportive co-workers and bosses and a positive work environment, WrenchWay — a matchmaker of wrench-turners and dealership service departments — helps in that effort.

The struggle dealerships face recruiting and retaining technicians won’t abate anytime soon. And that’s another certainty in life these days.

Dan Shine   

Gatik truck

In Monday’s Automotive News:

2023 Cadillac Escalade V

Upscale performance: Large luxury SUVs are moving more upscale in price, content and performance, so the Cadillac Escalade is getting fortified with an extreme performance model, the 2023 Cadillac Escalade-V. Priced at $149,000, the V’s 6.2-liter supercharged V-8 engine packs 682 hp and 643 pound-feet of torque, good enough to zip from 0 to 60 mph in under 4.4 seconds. We walk you through the details.

Mercedes EQB crossover

Mercedes’ EV plans: Mercedes-Benz expects EVs to account for about half of its U.S. sales by 2030, executives revealed at the brand’s national dealer meeting. The German luxury marque is in the early days of an EV product offensive that will bring a handful of zero-emission models over the next year. That effort will be critical to Mercedes’ aspirations of delivering about 350,000 vehicles in the U.S. next year, according to a retailer who attended the event. Mercedes aims to sell up to 45,000 EQ-branded electric vehicles in 2023, said the dealer, who asked not to be identified. In contrast, Mercedes sold 352,129 in 2019, before the pandemic and a global supply chain crisis kneecapped production industrywide. We lay out the details.

Weekend headlines

Tesla asks shareholders to approve 3-for-1 stock split:  The proposed split in the form of a dividend comes amid a sharp selloff in Tesla, which saw its shares underperform broad markets. The stock is down nearly 35% this year.

Bob Carter

Toyota sales chief calls it a career: Bob Carter, executive vice president of sales for Toyota and Lexus in North America, will retire June 30. Carter, who started at Toyota as a warranty processor in 1981, will be succeeded by Jack Hollis, who has been senior vice president of automotive operations. The retirement is part of a larger executive reshuffling at Toyota Motor North America. Also retiring is Tracey Doi, CFO, who will be succeeded by Tim Ingle, who has been group vice president for enterprise strategy.

Solid Power

Solid Power flips switch: Ford-backed EV battery startup Solid Power unveiled a fully operational production line that’s producing sulfide-based battery cells for electric vehicles. It’s a step toward developing scalable solid-state batteries that can deliver extended range for lower cost than conventional lithium ion batteries.

Honda Pilot

NHTSA probes Pilot: U.S. auto safety regulators are investigating potential safety issues with certain Honda Pilot midsize crossovers after reports alleging engine failure. NHTSA’s Office of Defects Investigation said it has received 221 complaints and several field reports on the issue.

Top Five U.S. Lease Deals  
MarketScan
What are the best deals nationally this week across the U.S.? Market Scan’s Payment Value Index (PVI) analyzes the relationship between MSRP* and the monthly payment to determine which lease deal delivers the best “bang for the buck.” For more information, visit www.marketscan.com.
Crossover/ SUV  
PVI Year Make Model Average MSRP*   Average Best Payment
90.06 2022 HONDA PILOT $45,511.92   $493.76
90.04 2022 TOYOTA RAV4 PRIME $42,677.50   $463.81
89.58 2022 KIA SORENTO PHEV $47,615.00   $535.25
89.39 2022 KIA NIRO PLUG-IN HYBRID $34,411.67   $392.59
89.22 2022 HONDA PASSPORT $43,160.00   $499.28

 

PVI Year Make Model Average MSRP*   Average Best Payment
88.74 2022 HONDA CIVIC SEDAN $27,081.67   $323.98
87.88 2022 INFINITI Q50 $50,641.67   $641.24
87.52 2022 TOYOTA COROLLA $25,171.82   $328.33
87.43 2022 HYUNDAI SONATA $30,795.00   $404.05
87.24 2022 HONDA ACCORD SEDAN $32,835.00   $436.68

 

Hatchback  
PVI Year Make Model Average MSRP*   Average Best Payment
89.12 2022 HONDA CIVIC HATCHBACK $27,748.33   $324.06
87.57 2022 VOLKSWAGEN GOLF R $45,040.00   $584.49
87.06 2022 TOYOTA COROLLA HATCHBACK $23,860.00   $320.73
86.88 2022 SUBARU WRX $35,488.57   $484.62
86.57 2022 SUBARU IMPREZA WAGON $23,638.33   $328.40
* Average MSRP is the average of the MSRP of all the individual trim levels for each model, and includes all taxes, registration and average dealership fees. Based on 36-month lease, 12,000 miles per year, 720 credit score, customer cash = 5% of MSRP, Selling Price = MSRP

Source: Payment Value Index (PVI) ™, a trademark of Market Scan Information Systems, Inc.

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June 13, 2010: Jim McDonald, who was president of General Motors under CEO Roger Smith in the 1980s, dies at 87. McDonald became president and COO on Feb. 1, 1981, a month after Smith took over as GM’s chief executive.
McDonald helped steer GM as it rebounded from recession at the start of the decade while confronting stiffening overseas competition. The company diversified, reorganized, overhauled factories and sought new ways of winning back U.S. market share. With Smith, McDonald announced the creation of Saturn, the small-car company designed to beat Japanese imports, in 1983.
In a 1987 story marking McDonald’s retirement at age 65, Automotive News called his quest for quality a “long, hard and often disappointing struggle.” Some colleagues, the article said, “say McDonald’s compassion for plant workers caused GM to postpone too long the closing of several assembly and component plants.”
A year earlier, Ford Motor Co. had outearned GM for the first time since 1924 amid growing signs that Smith’s overhaul was failing. McDonald was quoted as saying that the rewards were yet to come. “We could have eliminated a lot of investment and not reorganized and looked better right now,” he said. “But I don’t think the corporation would have existed until 1990 or existed very well.”
McDonald’s successor as president, Bob Stempel, would take over for Smith as CEO in 1990 only to be ousted by GM’s board less than two years later.

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