GM's Comeback Plan?

[FastRam]

Well sort of not IMO.

One day before our first winter/ice storm my Chevy's defroster and air control panel decided to quit working. And I have noticed a whining/growling noise coming from the engine. So I took my 1996 Chevy Pick'em up truck to the dealer I have been using since I bought the truck new back in Nov. 1995.

I got a phone call from the service manager giving me the bad news. First I needed a new HVAC controller panel -- which I figured I would need. Price for that $295.00, installed. Second, the whining noise was coming from the alternator, failing bearing. I thought it may have been the belt tensioner. Alternator price, $475.00, installed. I asked the SM to break all this down for me as $800.00 isn't easy to come by in my life. He did and I was astonished at the price mark up I found with their parts. Labor rates I already knew about and they gave me a break on the "shop fees".

For the HVAC controller they were charging me $185.00 plus tax. I found the same part at gmpartsdirect for $95. For the alternator they were charging me $325.00, plus tax. Again, gmpartsdirect to the rescue -- $163.00 which also includes a 12 buck core charge. All parts shipped to me came in at around $300.00. Gee 100% mark up on the parts -- HELLO GM -- I know y'all are on hard times but so are your customers.

 

[Brat]

I hear you the parts mark up and what they charge for labor is uncalled for.

 

[ViperJeff]

Mechanic salaries, 401k plans, medical insurance, building costs, etc.....

I'm actually suprised they don't charge more

Jeff

 

[DevilDawg3097]

dude that is more likely the dealer and not gm. all dealerships set there own mark up and your right alot of them mark it up more then what msrp usually is. The dodge dealer by me used to gouge but now they need to make money and are actually competing with the parts store. I have been some good deals lately.

 

[Black1]

Yep, I got kicked for the 30k mile service on my wife's car (2005 Mazda RX8) last week..... $750.00 just to flush/change all the fluids and replace the spark plugs (which they told me afterwards they had to do a TSP anyway that included changing the plugs :dontknow. :argh: :argh: :argh:

 

[nycstev]

Hey someone has to pay for all the marble in the showrooms

 

[Texas Yellow Fever]

If you dig deep enough I think you'll find that just about every retail operation marks items up 100% or more. When I first took this place over I was surprised/appalled at the mark ups, but after being here for two years, I'm beginning to think they're not enough. It takes a lot to cover all the overhead, trust me...

 

[Dom426]

we mark up a 1000% over standard cost

 

[GADodgetech]

Times are tough bro And the labor rate is justified, the overhead at a dealer is unreal.

 

[FastRam]

I call BS on all the overhead. The internet site I used has to pay somebody to process the orders, customer service (real live people), they have their own warehouse, again more employee salary, benefits, etc.; they pay utility bills, somebody boxes up the parts, the business owner draws a salary, profit, taxes, and the list goes on.

When I picked up my truck, sans repairs, I met with the dealer and the parts manager told me "well, the msrp for the alternator is $459 and the heater/AC controller msrp is around $235 -- I could have charged that...". Gee profit margin just went up quite a bit more. The parts manager and service manager told me, yes some dealers around here will charge their customers msrp. I guess they do this because they can and the public is willing and does pay these amounts. I guess it comes down to the customer being knowledgeable or at least informed or perhaps it comes down to what the dealer can get away with.

BTW, I had no problem paying the labor rate -- the guy turning wrenches day in and day out deserves it, or at least what he gets paid. But all the other BS, profit, OH, no thanks -- not for a COD job as simple as this on a 1996 Chevy truck.

 

[FastRam]

dude that is more likely the dealer and not gm. all dealerships set there own mark up and your right alot of them mark it up more then what msrp usually is. The dodge dealer by me used to gouge but now they need to make money and are actually competing with the parts store. I have been some good deals lately.

See the response I just Posted -- they could have charged me more for the parts, much more.

 

[GADodgetech]

I call BS on all the overhead. The internet site I used has to pay somebody to process the orders, customer service (real live people), they have their own warehouse, again more employee salary, benefits, etc.; they pay utility bills, somebody boxes up the parts, the business owner draws a salary, profit, taxes, and the list goes on.

When I picked up my truck, sans repairs, I met with the dealer and the parts manager told me "well, the msrp for the alternator is $459 and the heater/AC controller msrp is around $235 -- I could have charged that...". Gee profit margin just went up quite a bit more. The parts manager and service manager told me, yes some dealers around here will charge their customers msrp. I guess they do this because they can and the public is willing and does pay these amounts. I guess it comes down to the customer being knowledgeable or at least informed or perhaps it comes down to what the dealer can get away with.

BTW, I had no problem paying the labor rate -- the guy turning wrenches day in and day out deserves it, or at least what he gets paid. But all the other BS, profit, OH, no thanks -- not for a COD job as simple as this on a 1996 Chevy truck.

You have forgotten all of the equipment that is inside the dealership. Let me break it down for you:
Alignment Machine-$30,000
Tire Machine-$3,000
Tire Balancer-$5,000
Automotive racks-$2,500 x 15
Diagnostic tools-$10,000
Routine maintence-$5,000 a month

The list goes on forever. Times are really tough right now, prices are going to be higher, thats just the way it is.

 

[FastRam]

Yep, I got kicked for the 30k mile service on my wife's car (2005 Mazda RX8) last week..... $750.00 just to flush/change all the fluids and replace the spark plugs (which they told me afterwards they had to do a TSP anyway that included changing the plugs :dontknow. :argh: :argh: :argh:

That sounds like the screwing over my wife gets when she takes the Honda Pilot in for the "recommended servicing". Unbelievable some of the BS coming from Honda's pie holes to.

 

[FastRam]

You have forgotten all of the equipment that is inside the dealership. Let me break it down for you:
Alignment Machine-$30,000
Tire Machine-$3,000
Tire Balancer-$5,000
Automotive racks-$2,500 x 15
Diagnostic tools-$10,000
Routine maintence-$5,000 a month

The list goes on forever. Times are really tough right now, prices are going to be higher, thats just the way it is.

OK, that's fair. The dealer invests in equipment and the dealer also gets to take tax deductions for this business expense, depreciation, and makes a profit off it to pay the bill to ultimately own it. My local Chevy dealer's equipment that you mentioned above has been paid for for years. A tech 2 has been a tech 2 since OBD II came around. I guess they pay for the software updates? :dontknow: And I remember 8 years ago when their new front end alignment machine showed up. Its still the same machine and I think by now it has paid for itself several times over, even with software and O&M costs factored in. Equipment routine M&R is a valid expense although it's cost is dependent on what the dealership owner wants to pay. And I can say that the owner of my local Chevy dealer doesn't pay for jack squat until the equipment breaks and he is forced to pay to have it fixed.

Tough times they are, no doubt it. But, that means the consumer has to be more savvy and cautious when it comes to handing out hard earned cash. I consider myself fortunate and lucky. I can pay for the parts, albeit at a deep discount and I have the ability to do a lot of my own work but there are things that will go over my head and that is where I rely on the dealer (or another local shop) to help me out.

 

[Stingray]

Times are tough bro And the labor rate is justified, the overhead at a dealer is unreal.

:dito:

FastRam, along with GADodgetech's examples there is also 1 little piece of overhead I recently learned about. The software/system for writing up our RO's/inventory/accounting was costing my dealership $20k a month. We dropeed them for a cheaper system to try and save money. How much do you think it costs to heat a large shop in the winter with the doors opening and closing all day? I work at a small dealer and the phone bills alone a insane. And if you think a dealer's parts markup is bad, check into the furniture business. Their markups put the dealers to shame.

 

[Texas Yellow Fever]

OK, that's fair. The dealer invests in equipment and the dealer also gets to take tax deductions for this business expense, depreciation, and makes a profit off it to pay the bill to ultimately own it. My local Chevy dealer's equipment that you mentioned above has been paid for for years. A tech 2 has been a tech 2 since OBD II came around. I guess they pay for the software updates? :dontknow: And I remember 8 years ago when their new front end alignment machine showed up. Its still the same machine and I think by now it has paid for itself several times over, even with software and O&M costs factored in. Equipment routine M&R is a valid expense although it's cost is dependent on what the dealership owner wants to pay. And I can say that the owner of my local Chevy dealer doesn't pay for jack squat until the equipment breaks and he is forced to pay to have it fixed.

Tough times they are, no doubt it. But, that means the consumer has to be more savvy and cautious when it comes to handing out hard earned cash. I consider myself fortunate and lucky. I can pay for the parts, albeit at a deep discount and I have the ability to do a lot of my own work but there are things that will go over my head and that is where I rely on the dealer (or another local shop) to help me out.

Run a retail business for awhile, you'll understand. Until then you won't...I didn't.

 

[DevilDawg3097]

:dito:

FastRam, along with GADodgetech's examples there is also 1 little piece of overhead I recently learned about. The software/system for writing up our RO's/inventory/accounting was costing my dealership $20k a month. We dropeed them for a cheaper system to try and save money. How much do you think it costs to heat a large shop in the winter with the doors opening and closing all day? I work at a small dealer and the phone bills alone a insane. And if you think a dealer's parts markup is bad, check into the furniture business. Their markups put the dealers to shame.

Hes got a point, everyone forgets that it is not just the auto industry thats every industry, all our euipment is and has been payed for Yellow Fever is right I know my boss has a silver spoon and it would be cheaper for him to shut his doors and retire, but he employs up 50 people through out the year yeah it may be seasonal but he keeps us working and it all comes down to Management!!!! If you know your shit (like my Boss) and dont get greedy you will have a successful business even in these tough times.JMO

 

[FastRam]

:dito:

FastRam, along with GADodgetech's examples there is also 1 little piece of overhead I recently learned about. The software/system for writing up our RO's/inventory/accounting was costing my dealership $20k a month. We dropeed them for a cheaper system to try and save money. How much do you think it costs to heat a large shop in the winter with the doors opening and closing all day? I work at a small dealer and the phone bills alone a insane. And if you think a dealer's parts markup is bad, check into the furniture business. Their markups put the dealers to shame.

$20K a month, yeah I would be looking for another software/processing system -- something perhaps commercial off the shelf. I understand all the utility costs and what not to keep the operation going. All I am I saying is that if I can find the same exact part for 1/2 or more off than what the dealer charges, I know where I'll buy from. And yes, other industries are much worse when it comes to mark up. I know jewelry is one of the worst in terms of mark up.

 

[Texas Yellow Fever]

$20K a month, yeah I would be looking for another software/processing system -- something perhaps commercial off the shelf. I understand all the utility costs and what not to keep the operation going. All I am I saying is that if I can find the same exact part for 1/2 or more off than what the dealer charges, I know where I'll buy from. And yes, other industries are much worse when it comes to mark up. I know jewelry is one of the worst in terms of mark up.

If price is all that is important to you, by all means you should buy on the web or on eBay or wherever is the cheapest. I certainly do when service is not important to me on an item. But like I tell my customers who buy huge flags (IE 30' X 60', 40' X 70') from me every day that yeah, they can get them cheaper on the web and next time they need someone to come over in a friggin ice storm, or when the remnants of a hurricane are coming, to take their flag down then risk life and limb to come and put it back up in the middle of the night after the storm passes, call them guys 2,000 miles away that shipped the flag to them and have them come do it...

It all depends on perspective, and objective at the end of the day.

 

[FastRam]

Run a retail business for awhile, you'll understand. Until then you won't...I didn't.

I never owned a business and never ran a retail business. However, I was part of a team that managed and operated a small minority owned design/build construction business. Our goal was to keep overhead expenses to a minimum in order to maximize profit. If we went above 10% OH, vice total revenue, we deemed ourselves an inefficient operation that was not meeting corporate performance measures. Granted a construction D/B firm is worlds away from an auto dealer but efficiency goals for operations should apply to both business sectors. I for one don't like to see businesses, any of them, go south. That means people are out of work and that's not good.