Canadian Technician July/August 2013

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TUNNEL VISION How preconceived notions and shortcuts can undermine your diagnostics

AUGUST 2013

WWW.CANADIANTECHNICIAN.CA

ALSO: Q A new column by Alan Beech Q Celebrating the skilled trades Q Extended hours: the new normal

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CANADIAN TECHNICIAN AUGUST 2013

contents

Canadian Technician – August 2013 – Vol. 18 No. 6

FEATURES Celebrating the skilled trades .........................................19 Skills Canada’s National Competition in Vancouver draws thousands of students and apprentices from across the country to compete in 44 different trades.

Avoiding diagnostic errors ...............................................23 Faulty assumptions, missed steps, rushing past the basics…

Learn how to minimize mistakes by sidestepping the most common traps.

COLUMNISTS It’s Your Turn by Peter Carter ............................................... 12

23

Collective Wisdom by Alan Beech ...................................... 15 The Car Side by Rick Cogbill ................................................ 30

DEPARTMENTS Service Notes .................................................. 5 Letters .............................................................. 6 Out & About ..................................................... 8 EyeSpy ...........................................................10

30

Products.........................................................26 Ad Index .........................................................29

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GENUINE TECHNOLOGY

INSTALL

SERVICE NOTES

Our virtual 20-Group A new regular feature in the magazine explores the lessons and strategies that develop in peer groups.

VOLUME 18

NUMBER 6

451 Attwell Drive, Toronto, Ont. M9W 5C4

By Allan Janssen They say dance like no one’s watching.

But my friend Pete says that just leads to bad dancing.

You want good dancing? Pete says dance like the whole world is watching.

When we know there are eyes on us, we tend to be on our best behaviour (although I don’t know why that doesn’t hold for the occupants of the “Big Brother” house where the ever-present cameras only seem to capture tomfoolery).

The recent bombing at the Boston Marathon has given us a reminder of how much our public lives are, in fact, lived in front of cameras. Now imagine not only a camera following you as you work, but someone whose opinion you value watching your actions in real time.

What we’re really talking about here is accountability – for everything from bad dancing to bad business decisions.

Accountability is a big part of the “20-Group” concept that has taken hold in some industries – most notably the auto dealership world.

These groups, which started sprouting across North America in the late 1940s, allow dealer principals to meet on a regular basis to discuss sales, accounting styles, marketing ideas, and competitive environments. Perhaps the biggest part of their success stemmed from transparency. Members submit monthly numbers for communal analysis, and everyone plays the dual roles of cheerleader and devil’s advocate as they review successes and shortcomings.

The concept was slow to reach the independent sector of the automotive aftermarket repair and service world – perhaps, because independents tend to be a little too independent for their own good.

But a changing world is changing attitudes. It is becoming widely accepted that managers need to learn business

skills as urgently as technicians need to learn mechanical and diagnostic skills.

Recent discussions at the Congress of Automotive Repair and Service (CARS) have revolved around the idea of using modern technology to dramatically increase the number of independent shops participating in 20-Groups. They call it Twenty 2.0, and it’s a wildly ambitious idea that could pay huge dividends if shop owners submitted themselves to the process.

I think it’s fair to say that most shop owners could do with an immersion course in basic management theory.

Many of them got into business through the back door of being a technician first.

And, as one of our letter writers points out this month, “a technician’s license doesn’t come with a business degree.”

With all of this in mind, we’ve added a new column to the magazine this month. “Collective Wisdom” explores the lessons and strategies that develop in peer groups.

The facilitator in our virtual 20-Group is Alan Beech, a strategic thinker based in Hamilton, Ont. He’s been in the automotive aftermarket since 1990, and has benefited from peer groups for over a decade. As a facilitator, he now helps shop owners navigate the troubled waters of modern business and gain a competitive advantage in the marketplace.

Alan is a tireless advocate of peer groups. He says when shop owners meet regularly to share ideas, compare notes, and analyze their businesses, amazing things happen.

We couldn’t agree more.

If you don’t belong to a peer group, this won’t take its place, but it might give you an idea of what you’re missing.

I’d like to hear what you think.

You can reach me at allan@canadiantechnician.ca.

EDITOR Allan Janssen allan@newcom.ca (416) 614-5814 CONTRIBUTING EDITOR Sarah Voigt sarah@canadiantechnician.ca PUBLISHER Martyn Johns martyn@newcom.ca (416) 614-5826 CIRCULATION MANAGER Lilianna Kantor lily@newcom.ca (416) 614-5815 DESIGN & PRODUCTION Tim Norton production@canadiantechnician.ca (416) 614-5810 GENERAL MANAGER Joe Glionna PRESIDENT Jim Glionna PUBLISHED BY Newcom Business Media 451 Attwell Drive Toronto, Ont. M9W 5C4 Canadian Technician is published monthly except for January and July by Newcom Business Media, Inc., 451 Attwell Drive, Toronto, Ont. M9W 5C4. The magazine serves the Canadian automotive repair and service industry. Subscriptions are free to those who meet the criteria.

For others: single copy price: $5.30; one-year subscription in Canada: $42.00 ($40.00 plus applicable taxes); one-year subscription in U.S.: US$60; one-year subscription in all other countries: US$90. Copyright 2013. All rights reserved. The contents of this publication september not be reproduced by any means, in whole or in part, without prior written consent of the publisher. The advertiser agrees to protect the publisher against legal action based upon libelous or inaccurate statements, unauthorized use of photographs, or other material in connection with advertisements placed in Canadian Technician. The publisher reserves the right to refuse any advertising which in his opinion is misleading, scatological, or in poor taste. Postmaster: Send address changes to Canadian Technician, 451 Attwell Drive, Toronto, Ont., M9W 5C4. Printed in Canada. Second class mail: Postage paid at Toronto. Canadian Publications Mail Sales Agreement #40063170. ISSN 1710-7644.

:H DFNQRZOHGJH WKH ÀQDQFLDO VXSSRUW RI WKH *RYHUQPHQW of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.

Kenneth R. Wilson Award Winner Member

Canadian Business Press

Tunnel Vision

By Wayne Moore 1-905-632-8770 AUGUST 2013 CANADIAN TECHNICIAN

5

LETTERS And don’t say you can’t afford it… you can’t afford not to! You owe this to yourself and the industry to do it right.

Then, if we could get all independent shops to agree to good, solid operational standards, we would be a force that dealerships couldn’t compete with.

We need consistency in our ethics, behaviour and image.

I guarantee that if we committed to the above, the majority of today’s problems would quickly vanish!

EDUCATING CONSUMERS IS KEY TO DEFEATING BACKYARDERS

WE NEED TO SOLVE THE MOST PRESSING PROBLEMS FIRST

Your editorial “How Jim Bob Got the Job” (March 2013) raises many good points.

There will always be a niche for backyarders to eek out a living. I wish I had a nickel for every time someone said, “I have a neighbour who can do it cheaper.”

It’s time we started using the same tool that Jim Bob uses: the Internet.

We need to put articles out on our Facebook and Google pages and our web sites that clearly point out the benefits of dealing with trained certified automotive professionals. Let’s talk about legal and insurance issues.

Proper education will help stamp out the leeches that undercut our business.

If consumers are given the full story, it will help them to make better-informed decisions.

I just took your “Next-Step Survey” (April 2013) and thought I would add to it with a quick e-mail. The way I see it, we have three very different problems in our industry.

1) We have a slew of backyarders out there. We need to lobby to make it against the law to repair any safety related item on a vehicle unless you’re a licensed apprentice or tech.

2) Financing is a problem for many shop owners. We’re looked down on by banks. And even if you can get funds, it’s usually at a larger interest rate than most other industries.

3) Suppliers continue to sell to backyarders and techs who do work in their driveways – stealing work from the shops that hire them.

Let’s work together to sort out some of these issues.

Bob Ward Owner, Autoguys St. Thomas, Ont.

IGNITION TECHNOLOGY IS COMING FULL CIRCLE I really enjoyed the article on ignition change (May 2013). There is plenty of good information there.

I may be dating myself, but I believe that back in the 1930s, Ford used DIS. We called them chatterboxes. They had a coil for each cylinder.

We seem to be coming full circle… only smaller and more efficient!

Peter Abela Alignment Plus London, Ont. Member, CT Advisory Panel

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CANADIAN TECHNICIAN AUGUST 2013

Robert Summers Tiverton Truck & Auto, Tiverton, Ont.

TO BE A BUSINESS PROFESSIONAL YOU NEED BUSINESS TRAINING We are the only ones who can solve the issues our industry faces. And the first step is for everyone in this industry to recognize that this is a “profession,” and we have to approach it professionally and responsibly.

If you’re a technician opening your own facility, remember that a technician’s license doesn’t come with a business degree. Get professional help immediately. If you do, you’ll never look back.

Dave Peck Peck Brothers Automotive Thornhill, Ont.

WHAT ABOUT PERFORMANCE CHIPS? The SES light article (“Clean Air Challenge”) in your June issue brought a question to mind: have you ever covered the pros and cons of using performance chips? Most offer a fuel economy setting and a “power” setting. There are also add-on exhaust systems and DPF delete kits. These can all have positive and negative effects on the environment as well… and they could also be good for business (repairs after improper use).

Dave Madden Service Manager, Wood Wheaton Honda

Editor’s Note The use of performance chips – or adjusting the PCM from the original OEM software – is against the law in Canada. I know many people do it but if the software is modified, the vehicle no longer meets the specifications that the government certified. Updated software provided by the manufacturer is supposed to meet or exceed the emissions certificate the vehicle was designed for. (There have been instances where even the manufacturer has used software that was not proper and they had to pay a hefty fine when it was discovered.) And, a word of caution: high-performance vehicles and diesel trucks are routinely scanned when they’re at a dealership for service. If performance modifications are discovered, it could void the warranty. The use of permanent non-erasable trouble codes is also a way to see if software has been tampered with. Bottom line: you’re on very dangerous ice using performance chips.

—Jeff Taylor

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OUT & ABOUT

Consumers demanding extended hours, NAPA Canada boss says Get ready, because this is the “new reality,” Robert Hattem tells Autopro shop owners at national convention.

By Allan Janssen The president of NAPA Canada says independent repair shops that want to compete effectively against new-car dealerships may have to consider extending their hours of operation.

Speaking to Autopro shop owners at their 30th annual convention in Niagara Falls, Ont. recently, Robert Hattem said more and more dealerships are staying open late into the evenings and all day on Saturday.

“This is the new reality. That’s the push. There’s going to be extended hours in our business,” he said. “We may have to service the consumer at hours that we’re not used to.”

He acknowledged that the issue is a sensitive one that causes anxiety about quality-of-life issues.

“Everyone’s got the fear factor about working on a Saturday. But this is not a question of working on Saturdays. It’s a matter of servicing your customer,” he said. “It’s about organizing your business in such a way that you’ll have people there to serve those customers.

If your customers want that service, you’re going to have to think about it.”

He said Autopro would not dictate hours of operation.

“No one’s going to force you. You’ll have to decide whether you’re happy with 2% sales growth or you want your business to grow at a rate of 8-10% a year. It depends on how motivated you are to fight for your marketshare.”

Hattem repeatedly stressed that new-car dealerships are the real competitor to Autopro shops, not other independent automotive repair shops.

“They’re doing a lot of things to 8

CANADIAN TECHNICIAN AUGUST 2013

“This is not a question of working on Saturdays. It’s a matter of servicing your customer.”

retain their customers. They’re financing longer. They’re giving out maintenance packages that they weren’t giving out in the past. They’re being more competitive on the pricing of repairs.”

He said another big issue that is coming down the track is telematics – the direct link with consumers to get back into their repair bays on a continuous basis. He said Autopro is “doing some tests” on an aftermarket system that will give shops a fighting chance on the telematics front.

“We’re developing a strategy to overcome the telematics issue, because that’s going to be the biggest issue that we face from a customer-satisfaction perspective,” he said.

He also encouraged Autopro shop owners to invest in their showrooms.

“Think of the customer. Think of how you feel when you shop. What is the environment you’re looking for,” he said. “It’s important that you keep your showroom maintained and upgraded. Think of different ways that will satisfy your customers.”

Hattem also offered perspective on recent economic trends, calculating the impact they are likely to have on the automotive repair industry. In particular, he discussed a Canadian economy marked by slow growth, low inflation, even lower interest, and rising consumer debt.

“When you look at these challenges, it is just a template for what we need

to do in moving forward in our businesses. It’s not doom and gloom, it’s a challenge,” he said.

For example, underperformed maintenance continues to rise, begging a response from the auto repair industry.

“People are not maintaining their vehicles the way they should. And that has several consequences for us. There are things we need to do collectively to address that,” he said. “For one thing, it’s not good for the environment when vehicles are not well maintained. It’s not good for the consumer. At some point they’re going to have to repair those vehicles and it’s going to cost them more. You have a role to play in underperformed maintenance. You see your customers every day when they come in. And that’s something you have to explain to them.”

He particularly urged them to start considering their ability to service luxury vehicles, including European brands like Audi, BMW, and Mercedes Benz, which is one of the fastest growing segments in the market. The number of luxury vehicles on Canadian roads is expected to grow from 1.7 million units (or 7.7% of the total) in 2011, to over 2.8 million (10.9%).

“We’ll see significant growth in this area,” he said. “So what are we doing to attract those customers into our operations? We can’t just leave that segment of the market to the OEs.”

Trial of Ontario technician unlikely to get underway until at least 2015 Joe Ramono faces charge of criminal negligence causing death after a pickup truck he certified as safe was involved in a fatal collision.

The case of an Ontario technician facing criminal charges related to a vehicle safety inspection is not likely to go to trial until 2014.

Pretrial discussions in the case of Joe Ramono of Scarborough, Ont., were held June 13 in Peterborough, Ont. He is charged with criminal negligence causing death.

Crown prosecutors and defense lawyers involved in the case met to set dates for the preliminary trial proceedings which would pave the way for the official trial.

Lisa Wannamaker has been named as the crown attorney in the case. The preliminary trial will not be held until fall 2013.

Details of the pretrial discussions and preliminary proceedings cannot be reported.

Ramono was charged with criminal negligence causing death in November 2012, following an investigation by the Peterborough detachment of the Ontario Provincial Police and the Ontario Ministry of Transportation.

The charge stems from a fatal

head-on collision near Peterborough, Ont. on Aug. 3, 2012, in which a Dodge pickup truck driven by 21-year-old Joseph William Towns of Lakefield, Ont. crashed into a vehicle driven by Abigail MacNaughton, 27, of Peterborough.

MacNaughton was airlifted to hospital, where she later died.

Towns was charged with dangerous driving causing death, criminal negligence causing death, and two counts of uttering forged documents.

The Dodge pickup truck had been certified as safe by Ramono a month earlier, on July 4, 2012.

After a three-month investigation, officers from the Peterborough detachment of the OPP and enforcement officers from the Ministry of Transport executed warrants at Pro Street Auto Sales in Scarborough, and conducted a mechanical inspection of the truck after the collision. The inspection, OPP say, revealed that it did not meet the safety standards that would allow it to be operated on Ontario roads.

Shad’s breaks $4 million mark The automotive aftermarket’s annual charity golf tournament, Shad’s R&R, has added another $160,000 to its donations for muscular dystrophy research.

That brings the grand total donated over the past 40 years to over $4 million.

This year’s event was held at Station Creek Golf Club in Gormley, Ont. in June. It drew hundreds of golfers from across Canada and the United States.

Catherine Sharrard, CEO of Muscular Dystrophy Canada, received the cheque for $160,000 from members of the Shad’s R&R board. She said ongoing research into the chronic disease has allowed people with MD to live better, longer, and more active lives.

AUGUST 2013 CANADIAN TECHNICIAN

9

OUT & ABOUT

Precision Brand Precision Engineering

CIAA opens Alberta chapter

Precision Performance

Wayne Paulson, owner of Kingsgate Automotive in Edmonton, to act as president of the Canadian Independent Automotive Association’s first provincial chapter.

NEW

A national association for the independent aftermarket has its first provincial chapter.

The Canadian Independent Automotive Association (CIAA), which has its roots and much of its support in the west, now has an official Alberta chapter.

Wayne Paulson, owner of Kingsgate Automotive Ltd., in Edmonton, was chosen to serve as the chapter’s first president.

The newly formed Alberta chapter has been granted membership in the AMVIC Society representing the service and repair industry for the province of Alberta.

As a member of the AMVIC Society, the CIAA Alberta Chapter can appoint an individual to represent the service and repair industry on the AMVIC board of directors.

Nancy Suranyi, a part-owner of Namao Automotive Ltd. in Namao, Alta., has been chosen to represent the CIAA Alberta Chapter on the AMVIC Society board. She is a past chair of the AMVIC board of directors.

The CIA Association is a non-profit organization that represents the independent automotive repair industry with membership across Canada.

Hardware Included

The Alberta Motor Vehicle Industry Council (AMVIC) is a non-profit society, led by a board of directors representing motor vehicle industry associations, the motor vehicle industry at large, and consumers. It regulates the motor vehicle industry in Alberta.

All automotive repair facilities in Alberta are licensed under AMVIC. “We feel that our independent repair shops in Alberta will be well represented

by Wayne Paulson and Nancy Suranyi,” said CIAA president Rita Kause. “The CIA Association thanks everyone that worked so hard in the last few months to make this Albert Chapter a reality. The AMVIC goal is an important stepping stone to future goals that can be achieved for our industry by working together.”

Kause said CIAA will continue to reach out to shop owners across the country, and seek greater support to help improve the automotive repair and service industry.

“If you shoot one little metal BB at a window, you probably won’t break the glass,” she said. “But when you super-glue a couple hundred of those BBs together into a ball, you will shatter the window.”

EYE DIY SPY nightmare

®

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CANADIAN TECHNICIAN AUGUST 2013

Geoff Last, an apprentice at K.I.S.S. Auto Repairs in Kelowna, B.C. sent in a classic case of a DIY job gone wrong. The owner of this 2002 Sebring convertible had tried to diagnose a no-crank condition, and ended up destroying the ignition cylinder. In the end, the entire steering column had been taken apart and bolts and relays were scattered around the vehicle. There’s so much to say about this job! See more pictures and text at tinyurl. com/eyespy295.

Have an interesting picture to share? Email a high-resolution image to: allan@canadiantechnician.ca

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ITS YOUR TURN

A sardine-flavoured customer lure A party with food, fun, and music is a summer tradition at Bento’s Auto Repair in Toronto. And it’s not bad marketing either!

By Peter Carter

I’m a guy of Irish/Scottish descent, born and raised in Sudbury, Ont. An activity that does not come easily to me is dancing.

So if you predicted that on a summer Sunday afternoon, I’d be dancing to a remarkably deft Elvis impersonator crooning “Suspicious Minds,” surrounded by stacks of tires and oil drums in the back lot of a downtown Toronto auto-repair shop, I’d have said you were nuts.

But that’s exactly what happened.

And not only was it the most fun I’d had in years, it guaranteed that the next time one of our family vehicles needs servicing, it will get fixed at the shop where that dancing was done.

The place is Bento’s Auto Repair, a 24-hour, eight-bay operation a few blocks from our house in the city’s west end. The owner’s full name is Bento De Sao Jose, but to people who know him, it’s just ‘Bento.’

Every year, Bento invites the community out to an appreciation party. This year’s – Bento’s 44th in business – was the first one my wife Helena and I heard about.

We decided to attend at the very last minute. We’d invited my brother Eddie over for supper. Before he arrived I did a beer-store run that took me past Bento’s. I saw the “free barbecue” sign.

I got home, mentioned it to Helena and she asked, “Why not?” So we texted Ed the new plan: “Meet us at Bento’s.”

We walked the block and half to the shop. On the front of his lot, he let a few community groups set up church-hall 12

CANADIAN TECHNICIAN AUGUST 2013

Bento De Sao Jose with faux Elvis at his annual customer-appreciation party in Toronto.

tables so they could show off their good causes. A little further in, a bunch of youngsters played in an inflatable castle. Beyond that, in a fenced-off area, there was a crowd of people at three long rows of tables. A few Bento staffers manned the barbecue, turning out burgers, catcher’s-mitt-sized veal cutlets, and sardines that were so big I thought they were perch.

Beer, with the proceeds going to Toronto’s Hospital for Sick Children, was $2.50 a can.

And on stage was a one-man band, cranking out Portuguese dance tunes. A handful of women twirled on the dance floor.

Later, a couple of middle-aged guys

– could have been a pair of Bento’s techs – passed the mic back and forth, proving that they could sing really, really well. One of them strolled among the guests while he sang, flirting with all the women.

And, of course, there was the aforementioned Elvis impersonator.

Everybody was drinking and laughing and eating. My wife ended up dancing with one of Bento’s cousins.

I took some pictures and then had another beer with Ed. “I think Dad would have loved this,” he said.

He was right. The setting reminded Eddie and me of the garage operation my late father had, back in Sudbury.

He, too, had mountains of tires in the back lot and a bunch of mechanics working for him. And he loved parties.

Dad would have been there.

I put my beer can on the bench and joined Helena on the dance floor.

I’m already looking forward to Bento’s next party… but we’ll be back to his shop long before then.

I don’t know about yours, but in my family, if my wife likes a supplier, that’s the supplier we use. And with this summer afternoon customer-appreciation day, Bento won a few customers for life.

Peter Carter is the editor of Today’s Trucking, a trade magazine from same company that publishes Canadian Technician.

OF THE YEAR

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COLLECTIVE WISDOM A management feature that explores the lessons learned in peer groups.

Watching your cash flow One of the most stressful things about being in business is making sure there’s enough cash to pay the bills!

HEY BILL, At our last meeting, I noticed that you had a lot of questions about cash flow.

I wanted to send you this follow-up because from what you were saying at the meeting, this is a major concern of yours.

You said you’re always thinking about your bank balance, always stressed about how the bills are going to get paid, and you’re wondering how

you can invest in a service advisor when on the surface of things, that sounds like it is going to make your cash-flow problems worse.

First of all, let me say that you’re not alone in these concerns. I’ve noticed that shop owners don’t like to talk about their cash-flow issues. Either they don’t want to give away too much information about their business, or they don’t want to look foolish.

Whatever the reason, the result is that

they tend to think they’re the only ones who struggle with it.

The truth is, it’s a very common problem – particularly in our industry – and it can really take its toll, both at work and in your home life.

I’m a firm believer that if you don’t have a strong home life, your business won’t be strong either.

That’s why it’s so important that shop owners get together at least monthly to talk about common problems and find workable solutions.

The reality is business is tough.

There are so many threats from every side. Cash flow is just one of the threats.

So let’s dig into the problem.

Cash flow is seldom the underlying problem. It’s just a symptom that something else is out of whack. Usually it’s a bunch of things that need to be straightened out.

One of the biggest contributors to poor cash floor is insufficient gross profit percentages. That robs your business of the profit you need to keep things working smoothly. With insufficient gross profit percentages, you’re almost guaranteed to have accounting problems that can wreak havoc with your bank account.

Doesn’t that sound exactly like what you’re going through?

I’ve been going over your numbers and I think it’s fair to say that cash-flow problems have been showing up for a while in your business.

Let’s look at the problem from a lack of profit point of view. As you know, everything starts with knowing your key performance indicators. In your AUGUST 2013 CANADIAN TECHNICIAN

15

case, you need to pay special attention to your parts gross margin and your labour gross margin.

We talked about how you’d like to achieve a 50% average margin on your mechanical parts sales. Last month you bought parts for $26,550 and sold them for $45,000. That’s a parts gross margin of 41%. A 50% parts gross margin would have meant selling those parts for $53,100, and it would have netted you an additional $8,100 dollars.

PARTS GROSS MARGIN The difference between the sale price of a part and the cost of the part determines the profit. To calculate parts gross margin, divide the profit by the sale price.

$26,550 ÷ $53,100 = 0.5 or 50% A good target for automotive repair shops is 50% on mechanical parts… generally less on tires.

There are some good ways to make sure you obtain your targeted parts gross margin. Many automotive management systems allow you to set up a pricing matrix. It’s not quite as simple as just doubling the cost of every part to get a 50% parts margin. It would be difficult to justify charging $1,000 for a $500 ECM. But you could easily get many times the cost price for small items.

Similarly, it is difficult to get your target margin on items where the sell price is commonly accepted – batteries, for example. You may not make your margin there, but you make up for it on other parts. The challenge comes in setting up the matrix to be sensitive to the pricing level and the sales category.

At last month’s meeting we also talked about the labour gross margin.

We said for every $100 you charge for labour, you should be paying your technician $30, which leaves a 70% labour gross margin for your shop. Last month, you had labour sales of $47,000 and you paid your technicians $20,210, for a labour gross profit of 26,790. That gave you a labour gross margin of 57%.

On labour sales of $47,000, you should 16

CANADIAN TECHNICIAN AUGUST 2013

have paid your technicians $14,100, leaving you with $32,900.

LABOUR GROSS MARGIN The difference between the amount of labour sales and the amount paid to the technicians is the labour gross profit. To calculate the margin, divide the labour gross profit by the labour sales.

$32,900 ÷ $47,000 = 0.7 or 70% Most shops, try to attain a 70% gross margin on labour sales.

Setting your labour gross percentage starts when you set the wage structure for your technicians. You should be paying the tech 30% of what you’re billing out.

If you’re not attaining that 70% target, you may have a problem with that technician. What is his productivity?

Or you may not be properly estimating the time needed to complete jobs. Or perhaps your labour rate is too low.

That’s something we’ve covered before and we’ll cover again. But something clearly needs adjustment.

As you can see, Bill, when you add up the low gross you earned on both parts and labour, you shortchanged yourself by about $14,210 in a single month! At that rate, you’re losing about $170,500 dollars a year – money that should have been in your bank account!

I know what you’re probably thinking. I make it sound so easy to bring these numbers up, right?

Well, Bill, the reality is that a number of the members of our group are hitting their targets in these areas. Have a look at the monthly numbers for Cecil’s Brake & Exhaust. He had the same struggle.

Have a look at his results. It just takes determination. And next month we’ll dig into how we can set things up so you’re always achieving the correct number without even having to watch it.

When you fix these problems properly, they stay fixed.

There’s one more area where you can understand your cash flow better.

Bill, at the meeting you shared your frustration, that your yearly income

statement shows that you made a decent profit but you had no relief from your cash flow problems. Why? Well, I know that you recently took out a mortgage to purchase the building you’re in. And, like many business owners, you purchased the building with a holding company. But I’ve been looking at your numbers, and I see that your monthly mortgage payment comes out of the current account for the business. The problem is, you’re not charging yourself a monthly rent expense. This artificially inflates your profit and depletes your cash.

You want to make sure you’re journaling a rent charge from your holding company. When you do this, there’s a better match between the profit reported on your income statement and the balance on your bank statement.

I’ve seen it lots of times. A business owner will look at his monthly income statement and see that he made $8,000 that month but he never sees that $8,000 in the bank. The reason the mortgage payment does not show up on the income statement is that it isn’t being journaled in.

So, Bill, you can see that your main problem is not really cash flow but a little accounting error and a lack of attention to your KPIs – particularly parts gross and labour gross percentage.

From now on, at every meeting we’re going to be looking at what the KPIs of a thriving automotive repair shop should be. You’ll be amazed at how profitable you’ll be when you pay attention to those KPIs. And working together, as a team, we’ll be able to help each other meet our targets.

Remember, the failure of one of our members should be considered the failure of the group.

I look forward to seeing you at the next meeting!

Alan Beech is the owner of Beech Motorworks in Hamilton, Ont. He also has a consulting business, advising shop owners on modern management principles. Want to know more about peer groups? You can reach Alan at alan@beechconsulting.ca.

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A Complete Line of Quality Brake Products Hundreds of young men and women took part in the 2013 Skills Competition.

Next year’s Skills Canada national competition will be held June 4-7, 2014 in Toronto.

Celebrating skilled trades in Vancouver Skills Canada national competition draws thousands of competitors in 44 different trades. Ontario apprentice wins automotive service title.

By Allan Janssen Scotia came in third.

Adam Bochek admits he gets bored easily.

High school winners were Etienne Thankfully there’s so much to learn Trudel of Quebec (gold), Austin in the automotive service and repair McWilliam of Ontario (silver), and trade, that he never gets bored at work.

Paul Pillipow of Manitoba (bronze).

“This has definitely kept my While Bochek says winning the interest,” says the third-year apprentice competition was a gratifying experience, at Eccles Auto Service in Dundas, Ont. he’s a little disappointed that it won’t “If I stop learning things, I’ll stop doing qualify him to take part in the 2015 this. And in this job, there’s always World Skills Competition in Sao something new to learn.”

Paulo, Brazil. For one thing, Canadian He’s learned enough, in fact, to competitors will be drawn from next make him the post-secondary champion year’s nationals. For in the automotive another, competservice category at the itors at the internaSkills Canada national tional event must be competition in June.

22 years of age or He beat 17 other younger. He’s already competitors from all 24.

10 provinces, as well Still, it was fun to as the Yukon and the travel to the nationals Northwest Territories, this year. He’d never to claim the title.

Aaron DeBoer of “I’ve always been into mechanical been to Vancouver Manitoba came in stuff,” says Adam Bochek. “Early in high before. “It’s like a second in the post-sec- school I knew I wanted to be a tech and cleaner Toronto,” he ondary division, while I started pushing myself in that direc- says with a wry grin.

It’s not the first time Jimmy Bowes of Nova tion. I came up with a long-term plan.”

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19

he’s excelled at Skills Canada competitions. As a high school student he twice won the Ontario provincial title, parlaying them both into national titles.

And as an apprentice through Mohawk College in Hamilton, he placed second in provincial competition a couple of years ago. All that experience helped him win this year.

“I don’t want to say it doesn’t matter what you do, but there’s a style they’re looking for and it all boils down to a score in the end,” he says. “As much as they say it’s about who fixes the car the best, there’s a bit of a ‘game’ to it. You have to know how to score points.”

Martin Restoule, national chair for the automotive competition at Skills Canada, says the tests are “challenging, but not impossible” and they’re designed to reflect the latest changes in the repair and service industry.

“I’ve noticed that the students, as a whole, are managing to keep up with all the new automotive technology, which has greatly improved over the years,” he said.

Part of keeping up with the trade is having the latest service tools. And for his part, Bochek is amassing a fine collection.

In fact this year, after winning the national title, he treated himself to a new digital torque wrench and a couple of drills.

It was really just an excuse to indulge his appreciation of the intricate instruments that are both the joy and the curse of his trade. Like most techs, he begrudges the expense they represent, but he enjoys working with well-made tools.

“You have to keep up,” he says.

“I take a chunk of every paycheque and buy tools. It’s just part of the trade to spend $5,000 a year on tools.

Sometimes I think that’s not too bad.

But I’ll admit that it adds up pretty fast.

By far, this is the most expensive trade to work in. By far!”

So far, in a career that has just started, he estimates he’s spent somewhere in the neighbourhood of $25,000 on tools.

That’s not to say he’s particularly good about keeping track of the one he owns.

“It’s a bit of a mess,” he concedes, as we go through the drawers of his toolbox, “but that’s how I work. I just try not to lose more tools than I keep.”

Becoming an automotive service 20

CANADIAN TECHNICIAN AUGUST 2013

technician always seemed to be in the cards for Bochek.

“I’ve always been into mechanical stuff,” he says. “Early in high school I knew I wanted to be a tech and I started pushing myself in that direction. I came up with a long-term plan.”

Although a lot of students took the auto shop class as an easy credit, they soon found out it wasn’t the ‘bird course’ they were expecting.

“Out of the 20 or 25 kids in the class, only about a half dozen really had the potential to do well in this trade,”

he says. “There’s a lot to it. More than most people think.”

Fortunately for him, he hasn’t been relegated to the simple or mundane tasks at Eccles Auto Service.

“I get to do a lot of diagnostics.

I know that’s not very common for apprentices,” he says. “I get to work on a lot of stuff that you wouldn’t normally get to do at a lower-end shop.”

It’s the kind of challenge and variety that he wants in a career.

“It keeps me from getting bored,” he says.

Nationals was ‘warm-up’ for WorldSkills competitor Tyler Kenyon, of J&E Motors in Wetaskiwin, Alta., represented Canada at the World Skills Competition in Leipzig, Germany.

Before he left, however, he attended Skills Canada’s National Competition in Vancouver to get some last-minute practice in.

The National Skills Competition held in Vancouver in June was “just another warm-up” for the automotive apprentice who would go on to represent Canada at the WorldSkills Competition.

Twenty-one year-old Tyler Kenyon joined 28 of his fellow Tyler Kenyon “Team Canada” members to get one last taste of competition before heading to Leipzig, Germany in July.

“It was more training for me,” he says. “I wasn’t representing a province, I was representing Team Canada.”

As such, he wasn’t eligible for awards. Those went to the 18 young men from all 10 provinces, as well as Yukon and the Northwest Territories.

All of the competitors were told they’d be competing alongside last year’s national winner, but that his scores wouldn’t count.

“I got to know a few of them,” says Kenyon. “I could see they were all a little worried and anxious, hoping to get gold.”

It was old hat for Kenyon, who has been through the process several times,

winning the Alberta provincial competition and last year’s nationals in Edmonton. This time around he was expecting to do well.

“I’ve had a whole year of practice,” he says. “I’m getting very familiar with how they make the competition and what I have to do to score points. It’s a whole year of getting into the competition mindset.”

The judges went up to him privately afterward and gave him notes on his performance, as well as some ideas of how he might have to able to improve his results in Leipzig.

Over 30 Canadian competitors were scheduled to participate in the World Skills Competition against more than 1,000 competitors from 61 countries and regions around the world. Results of the competition were not known at press time.

Kenyon has worked at his family’s J&E Motors in Wetaskiwin, Alta. since he was eight years old. Next year he’ll finish his apprenticeship and write the exam to earn his red seal certification.

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When we’re rushed, we’re more likely to make faulty assumptions, miss a crucial step, or forget the basics we learned in our first year as an apprentice!

By Jeff Taylor

I

recently stumbled across a blog that really got me thinking about the way we technicians go about our day-today routines.

The blog was about the common mistakes the average tech makes during a diagnosis, and how these can affect the repair and cause comebacks.

Wouldn’t you know it, about a week after reading the article, I caught myself

making one of the fundamental diagnostic mistakes the author had warned about. It reminded me that if my diagnostic strategy is flawed from the start, even the simplest problem can quickly become a nightmare job.

We’ve all developed our own unique way of approaching common repair situations. But with so much information available to us these days, it’s really easy to deviate from a logical path and fall down a few rabbit holes.

TUNNEL VISION Probably the biggest problem is when we develop tunnel vision. The dictionary defines it as when one’s visual field is severely constricted, or when one has an extremely narrow point of view.

This loss of vision – or narrow-mindedness – can easily manifest itself in our day-to-day routines, especially when things become too familiar.

Let’s say a 2004 Monte Carlo comes in for service. But the low-tire light is on, so after the tech performs the service, he turns his attention to that.

He notes that the car has recently had the steel wheels and snow tires installed.

A quick check with the TPMS tool indicates there are no sensors in the snow tires. The tech figures this is the issue and stops looking for other possible problems. He assumes it can’t be anything else… but he’s wrong.

A quick check of how the low-tire AUGUST 2013 CANADIAN TECHNICIAN

23

light system functions on this vehicle will confirm that it uses the indirect method for tire pressure measurement and there are three different ways to turn out the light after the pressures have been checked.

The lesson here is simple: don’t assume. Every vehicle is different in the way it operates and the way it’s tested.

Even the same models of the same year can have different systems onboard.

to a reflash to resolve the issue. This car didn’t need an EGR valve. It just needed a software update.

Now we have to explain to the customer why it wasn’t fixed right the first time.

SILVER BULLETS

Common knowledge and generalizations can easily lead to bad decisions as well.

Another TPMS example. Let’s say a customer brings in a new 2013 Dodge pickup, and the low-tire light is glowing away. The tech is called and he quickly checks the tire pressures. They’re all equal… so he figures there must be something wrong with the system, and since it should be under warranty, he suggests the customer go back to the dealer.

A further inspection would have shown that although the tire pressures were equal, they were all equally low.

They were about 7 PSI lower than what the TPMS module wanted to see.

It’s a simple mistake but it can cause a big issue with customer confidence.

There is a real temptation to rely on pattern failures for your diagnosis.

We’ve seen the same problems crop up year after year on certain makes and models… and it can lure us into a diagnostic loop.

Say a customer comes in with an ABS light on in a Buick Rendezvous.

The scanner shows a C0040 right front wheel speed sensor circuit. A road test shows its working and the resistance is in spec. We’ve changed hundreds of these, and the cheap offshore replacements are of dubious quality – so it has to be the hub, right?

Not in this case. It was fatigue in the wiring harness going to the sensor.

Because we didn’t think of that, or test for that, the ABS light was on again a couple of days later.

Use a pattern failure to aid in your diagnostics… but don’t put all your faith into it,

IGNORING INFORMATION

GENERALIZED TROUBLE CODES

Not checking all the facts is a huge problem in our industry. One of the easiest things to overlook is a TSB. Failing to look for recent TSBs can easily turn an otherwise simple job into a huge comeback headache.

Let’s say a customer brings in a 2001 Impala with a 3.8 V6 for a checkengine light. A scan shows two codes: a P0404 and a P1404. Both are EGR codes and relate to it not closing. The scanner shows that the valve was closed, and functioned OK during a test but if the PCM was setting these codes, the EGR must be the issue. It’s super easy to change so the tech goes ahead and does that. Codes are cleared, and the customer pays the bill. Case closed.

But the case doesn’t stay closed.

The next day, the customer calls and says the light is back on. It turns out GM had an issue with this, and the company issued a TSB that pointed

Sometimes we have to ask what the code really means, and how do I diagnose it?

Let’s say a car rolls in with a P0132 O2 heater issue. Most techs would be tempted to simply condemn the O2 sensor, and not go any farther. Given what some websites say, they’d just be wasting their time if they indulged in further diagnostics.

Yes, a P0132 is a heater code. But on a GM, it can mean an open, short to voltage, or high resistance. And that issue may not be in the sensor. We have to do a thorough and proper inspection, and follow the diagnostics that the manufacturer gives you. Remember that a P0132 on a Chevy Sonic may not be the same diagnostic trouble tree on a P0132 on an Acura.

MISREADING INFORMATION

24

CANADIAN TECHNICIAN AUGUST 2013

REMEMBER THE BASICS Need I say more?

Starting with the basics was

something that was drilled into me as a young tech. And boy was I lucky! The guy I worked for back then was (and still is) a freak about the basics. If a car was towed in for a no start, he would start by asking, “Does it have fuel? Does it have spark? And are they there at the right time?”

It sounds simple, right? But this is the type of basic thinking that is all-toooften forgotten or overlooked. It’s surprising how many times a basic issue was the root cause of a problem.

Simple stuff, like a bad battery connection, can easily cause a misdiagnosis. As an instructor I stressed basics.

If a sensor needs power and ground, does it have it? I’ve been amazed how many blown fuses I’ve found that someone else had missed. They’d spend hours trying to figure out the problem, and it was something so basic.

Failing to check the basics properly can lead to other diagnostic errors like tunnel vision. And that just compounds the problem. It can make a simple job a tough one.

Yes, I’ve fallen victim to all of these issues at one time or another over the course of my career. In fact, the story about the EGR valve on the Impala is real; it was my daughter’s car and I was fixing it after work.

I’ve developed a pretty good diagnostic strategy and I try to stick to it. But from time to time I stray from it, usually when I’m in a rush, or under the gun to get a job done.

But here’s the thought that always helps me stay on the right diagnostic track: As technicians, our goal should be to repair a customer’s vehicle correctly and efficiently the first time.

The customer doesn’t like giving up the vehicle, even for a morning. But if it has to come back a second time, not only are they put out twice, they may start to question your abilities.

Jeff Taylor is lead technician at Eccles Auto Service in Dundas, Ont.

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continued from page 30

although the clicking sound came from the hazard flasher, the actual problem source was corrosion at the signal switch portion of the column-mounted multifunction switch. But there was no point telling Buck that. Multifunction switches were expensive.

The next morning Buck was back to borrow my Torx screwdrivers. “Let me guess,” I said. “You tried the new hazard flasher assembly and it didn’t fix your problem?”

He glared at me. “Quit wasting my time and gimme those screwdrivers. I ain’t got all day!”

I handed over the tools against my better judgment. “So now you’re going to change the switch too, eh?”

Buck chortled. “Not on your life, Shambles! I found a video that shows me exactly how to take the switch apart and clean it! It’s so easy, even you could do it.”

“Oh really? Maybe I should arrange a training session for my techs.”

Buck headed for the door. “Now you’re talking. Once I’m done with this, I’ll come by and give a demonstration. It’s high time you guys learned to give the consumer a break.”

I said nothing, but opened up my scheduler program instead and booked Buck’s car in for the next afternoon. I had a feeling he’d come crawling quietly back once he found out his cheap fix didn’t work.

But I was wrong. When Buck returned, it was anything but quiet. In fact, we heard him coming two blocks away.

“Hey!” I yelled, running out to his car. “Quit blowing your horn – it’s driving us crazy!”

Buck got out and slammed the door as the horn continued to blare. “It ain’t me – it’s blowing itself!” He kicked the front tire angrily. “Ever since I took that switch apart, I can’t get it to shut up, short of unhooking my battery!”

After taking the multifunction switch apart, Buck had failed to get all the little springs and bits back in their proper place. I suppose we could have reassembled everything properly, and put a little dielectric grease on the signal switch contacts, but experience told me to replace the unit. If anything went wrong down the road, Buck would be back screaming warranty.

The good part was Buck appeared to learn a lesson about tackling things he didn’t understand. “Front brakes on your wife’s car?” I smirked. “I’m sure there’s a video online that could walk you through that.”

Buck gave me a dirty look. “There probably is, but I’ll never see it. My wife’s put a web blocker on my computer – anything that even smells of fixing something, I ain’t allowed to see.”

I handed him a large mug of hot coffee. “Here, drown your sorrows in this. I just made it.”

To my surprise, he refused my offer. “No offense, Shambles, but there’s some things you should leave to the professionals.”

Rick Cogbill Rick Cogbill is a freelance writer and former shop owner in Summerland, B.C. You can read more Car Side adventures in his book “A Fine Day for a Drive” available at www.thecarside.com.

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ProMax Auto Parts Depot..........................10 www.autopartsdepot.ca 1-866-573-9889 Shell ...........................................................25 www.shell.ca Snap-On Tools of Canada ............................2 www.snapon.com 1-800-734-2676 Tenneco Automotive .................................19 Monroe - www.monroe.com Total Lubricants .........................................31 www.total-lubricants.ca 800-463-3955 Valvoline.....................................................11 www.valvoline.com 1-800-TEAM-VAL WorldPac............................................. 27, 32 www.worldpac.ca 800-463-8749 Worx ...........................................................27 www.worx.ca

AUGUST 2013 CANADIAN TECHNICIAN

29

The Car Side

By Rick Cogbill

Armed and DIY-Dangerous YouTube can be good entertainment, but you’ll never become a certified tech watching how-to videos!

Buck Pincher tossed another sugar cube into his coffee cup and swirled the contents around. “I like it shaken, not stirred,” he said in response to my quizzical look. But after one sip, he grimaced. “Still awful, but it’s better than your usual poison.”

“Can’t be that bad. It took you three cups before you complained.”

I turned my attention back to the boxes of parts cluttering my front office. Buck craned his neck, trying to read upside down the packing invoices on my clipboard. “Hey!” I said. “What I pay for this stuff is none of your business!”

“Well, it gets to be my business when you add them bricks of gold to my repair bill. I’m tired of paying for your vacations to Maui. I should start 30

CANADIAN TECHNICIAN AUGUST 2013

doing my own repairs.”

The idea intrigued me. “Is that a promise or are you just teasing?”

Buck tossed his cup into the garbage can with a belch. “I got a computer, y’know. A fella can find almost anything on YouTube.”

“Go for it,” I replied. “Just remember, we charge DIYers double to fix their mistakes.”

Tooner sauntered in, looking for his 10 o’clock cup of death. “Buckster!” he exclaimed. “What brings you outta your cave?”

Buck jerked his thumb towards the parking lot. “My daughter’s car. Got a clicking noise in the center of the dash.

Sorta like the signals are on – only there ain’t no flashing lights.”

Tooner slurped his coffee thought-

fully. “Sorta like where the emergency flasher button is? Seen a lot of GMs lately making that kinda noise.”

Buck’s face lit up. “Hey, that’s it; a faulty hazard flasher!” He grabbed his keys off the counter and ran for the front door. “I’m gonna fix this myself and save me a boatload of money!”

Tooner and I watched the 2004 Pontiac Grand Am disappear around the corner. “Should I be sorry I said anything?” asked Tooner.

I reached for the coffee pot. “How many sugars do I need today?” He held up four fingers. “Thanks. No, don’t worry about our friend. This could be very entertaining.”

We had indeed seen a number of GM vehicles with the same issue, and continued on page 29

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