Unrealistic expectations

[booster]

Discussions about the quality of dealers, and even more so the quality of repair services comes up a lot here, and on other boards, like the Yahoo ones. Just for reference, I did a quick search for what they actually pay the folks that are charged with fixing your increasingly complex RVs. Electrical, plumbing, propane, heating, ventilating, lots of expertise needed to be good at the job, I think.

Average pay for an RV technician is $16.00 per hour, or just barely above working retail jobs. I think that expecting top notch technical results at that wage are pretty much wishful thinking. I have heard that good marine techs make well over double, to triple, that wage for doing similar stuff on boats.

Recreational Vehicle Service Technician Salary

I don't know what the dealers are charging the customers for hourly rate, but my guess is that they are making plenty of profit on service hours.

It is no wonder folks who have a trusted repair shop consider themselves very, very, lucky.

[mkguitar]

Dealers tend to hire techs right out of school.

book- learning is fresh, experience and deduction skills are low.

Those who have a clue, move on to an independent business where they can charge what they can get.

think of your dealer as a mcjob

the person at the counter is a "service writer" that is a commission position- they are earning more if they sell you more services, more parts.

the billing for most mechanical procedures is based on a time schedule- not "real time".
a standard time might be allowed billable for say a brake job.
a crap tech may take twice as long and earn less. a great tech may be able to do in 1/2 time and make 80 billable hours for 40 in the shop.

other shops may just pay a straight hourly wage- in which case the shop mgr wil be trying to keep things moving.

anytime a repair estimate is being made-ask if the time is according to the Mitchell manual- the bible for labor procedures and times.

1 road repair at a shop for a bad rear axle bearing gave me an itemized bill where I was charged for "removing cover & draining differential housing"...these items are detailed as part of "replace rear axle bearing"- his head jerked up when I call him on that. the bill OTD was just over 1/2 what they had wanted to charge me.
analogy, you order a hamburger for $6- it comes with a $12 bill- add $2 for lettuce, $2 for buns, $2 for tomato.










mike

[cruising7388]

Originally Posted by booster

Discussions about the quality of dealers, and even more so the quality of repair services comes up a lot here, and on other boards, like the Yahoo ones. Just for reference, I did a quick search for what they actually pay the folks that are charged with fixing your increasingly complex RVs. Electrical, plumbing, propane, heating, ventilating, lots of expertise needed to be good at the job, I think.

Average pay for an RV technician is $16.00 per hour, or just barely above working retail jobs. I think that expecting top notch technical results at that wage are pretty much wishful thinking. I have heard that good marine techs make well over double, to triple, that wage for doing similar stuff on boats.

Recreational Vehicle Service Technician Salary


I don't know what the dealers are charging the customers for hourly rate, but my guess is that they are making plenty of profit on service hours.

It is no wonder folks who have a trusted repair shop consider themselves very, very, lucky.

I don't know if it trickles down to the dealer mechanic, but at least one encouraging thing is that a Roadtrek dealer mentioned to me that Roadtrek reimburses their dealers for warranty work at the dealer's normal labor rates.

[InterBlog]

Independent RV service centers in my area all charge $120 per hour for RV tech labor. They post that rate on their front doors so that customers know what to expect before they make it to the counter. No illusions.

I expect top-notch service for $120 per hour. Fortunately I only had to pay for it once, as my husband and I are DIYers who do most of our own work. But that one time we did pay for it, the number of hours charged was probably as large as we would have taken to do the job ourselves. So it's not like they are charging $120 per hour but offsetting those high rates with time-efficient work. They were surprisingly slow, which is why I only tried paying for service once. Lesson learned.

I don't know what the RV centers are paying their techs per hour, but no tech with any intrinsic self-worth would hang around a place where (s)he knows from the sign on the front door that (s)he is being billed out at close to a factor of ten. They'd either be demanding a thicker slice of that pie or they'd be out of there to put their skills to work in a better environment. The laws of supply and demand would sort that one out in a hurry, in other words. For this reason, I suspect the workers around here are getting substantially more than $16 per hour.

[Gobird]

So, ultimately I struck a deal with a dealer 9 miles from my home. Unfortunately, the chassis (Promaster) had a recall (ignition switch) that prevented delivery (lack of FCA parts). This gave me the opportunity to thoroughly inspect the rig well before delivery. I spent an hour or so checking it out and came up with a small laundry list. I was assured that those items would be taken care of and that I would be notified when the FCA OEM part was available. A couple weeks later, through my own investigation, I discovered that the FCA parts were now available. Called dealer, who was clueless, but since it was the end of the month, said he could get it done. Knowing how dealers live month to month, I offered to take delivery Feb 29, 2016 if they had the warranty repairs done. After assurances that all would be handled, I arrived at dealership and found only the FCA ignition recall (that prevented delivery) had been performed. They promised all repairs, full detail, and full tank of fuel later if I would take delivery right then. I took delivery.
They never did detail it, but finally got the initial punch list completed (thanks to svc mgr intervention). Every time I took it in, it came out dirtier than when I dropped it off. I was not terribly happy with the service, regardless of who was handling it.
Last straw was for initial generator oil change. When I got the van back, and checked the genny, it smokes like my old MG back in the day! Upon calling the dealer, they admitted to overfilling and the smoke was residual in the combustion chambers. After scratching my head a bit, I looked closely at the invoice and found that I had been charged for two quarts of oil, yet the capacity of the Onan was only .63 qts!
The last trip I made to that dealer was to pick up the oil that I was charged for, over and above the capacity of the Onan.
I can do a better job of repairs to any upfit problem than the 'tech' employed at this dealer. These were all warranty items, but I guarantee that I will
never go back to this dealer for their $120/hr service, ever.

[Viperml]

People can always sign up for RV tech training. RV Technician Certification Training - Hands-on - Real RVs
Then they can do it themselves.

[rjf7g]

I have a family owned shop I trust completely. They charge $45 an hour and do great work. I don't have time or skills to do the stuff I send their way. I always research how much time it should take and what the pieces and parts will cost and they ALWAYS come in under what I expect.

[InterBlog]

$45 per hour would be a no-brainer if they do good work.

Unfortunately with this forum, it's difficult to see where posters are located in the country (or in Canada). Some people enter their locations in their ID tile but a large number do not. And the topic of this particular thread is substantially sensitive to geographic location.

For instance, in my location, if a young man or woman is mechanically-oriented, able to work compliantly and without manifesting ego and defiance within a hierarchy of authority, and tests clean of illegal drugs, it's a given that they can find a job in a petrochemical plant that will quickly pay them six figures. That fact influences a great deal about our local labor market, including the RV-related labor market.

[ClassB4Me]

Originally Posted by InterBlog

$45 per hour would be a no-brainer if they do good work.

Unfortunately with this forum, it's difficult to see where posters are located in the country (or in Canada). Some people enter their locations in their ID tile but a large number do not. And the topic of this particular thread is substantially sensitive to geographic location.

The CA market can be brutal!!! Many dealers apply an across the board $3000 markup on cars.

I had an out of warranty issue on my MINI (ABS sensor warning). I researched the issue and most owners indicated there was a TSB out there for the issue.

The next day, I went to my dealer and only mentioned the sensor warning.

The dealer wanted $175 to check / inspect the fault on their computer, they had no record of the TSB, and a reset of the message would be over and above initial $175 inspection fee at a cost of $175 per hour.

I went home and searched for an independent service company specializing in MINIs. Emailed the same information and they were familiar with the problem and performed a warning reset at no cost to me the following day without an appointment.

Avoid using a dealership if possible. Especially once you are out of warranty.

[Rok]

Our experiences have been similar to others here. It is not my fault if a dealer chooses to pay $16/hr to an employee for service I'm paying $99/hr for. I should still expect the work to be done well.

There are two rules-of-thumb that can be applied here

(1) It costs a company about 50% more per hour to have an employee than his hourly wage. So that $16/hr guy costs the company about $24 per hour.

(2) The break even point for a company occurs approximately at the point where they charge double what the employee costs. For the employee in (1) above, then the actual profit the company recognizes would be the amount they charge the customer OVER $48 per hour.

Yes, rules of thumb are broad generalizations and are not dead on, but I just checked the industry standards for an auto repair shop, and they say that in order to have a successful auto repair biz you need your gross margins to be 70% of your hourly wage. So a $30/hr Employee's work should be charged to the customer at $100/hr. That's pretty close to my gross generalization above.

The bottom line is that the OP, Booster's, point that we can't expect all to good of an employee for what we are paying is dead on. I you are paying your garage $120 per hour you can expect that they are paying the employee doing the service about $36 per hour. And they are going to make some on parts from you as well. (40% of the gross sale is the standard for parts.)

Interestingly 40% gross profit (a 66% markup) is exactly what I used to get in my parts business (which was totally unrelated to automotive).

It isn't a wonder that working on your own rig whenever possible is very cost effective.

..............Rocky

[InterBlog]

We have a test case coming up in the New Year. Our vintage of Airstream Interstate Class B has a known serious gray water plumbing defect. Anecdotal evidence and forum reports suggest that a fair number of the original systems were replaced under warranty, but we were the second owners of our vehicle, and to our dismay discovered that it had not been retrofitted by the first owner under his warranty. So we were pooched and had to undertake this job as our first major DIY (comprehensive set of instructions there).

Having now completed one RV plumbing job, I'd say we're roughly on par with an RV tech chosen at random (except we don't have access to as many fancy tools). We have a friend in greater Houston with the same Class B, same year, same defect, and we've volunteered to help him repair his system. This time, I am going to keep track of both man/woman-hours and direct costs, so that I can report back on what I think a reasonable repair bill should be for this kind of thing.

A rig owner unrelated to us but with the very same defect reported on another forum that his dealer's bill for this same scope of work was $2,300, plus he lost the use of his rig for 6 weeks while it was in the shop. We are hoping to get this friend's upcoming job done within a single weekend, but we'll see how the numbers work out.

[booster]

A point to be made for those who haven't had to deal with accountants at work.

Gross margin is the amount of profit in % in relation to the selling price. Sell for $100 with $50 of it profit and you have 50% gross margin.

Markup is the amount in % that the profit is compared to cost. Make an item for $50 and sell for $100 and you have 100% markup.

A 70% gross margin is relatively huge compared to what I have seen in the manufacturing world, where goods we made and sold (retail consumer type products) were at max of 50% gross margin, or sold at double what we had in them, including all overhead chargeable costs. Most places that are just handling in and out of items, not making them or carrying large inventories ran between 25% and 50% gross margin.

When we did special orders, which required labor, parts, more support, and the best employees, we would bill the actual labor costs, including burden for facility and such at 50% margin.

It is relatively hard for me to see how a "normal" tech level RV shop, or even an auto repair shop would need 70% on labor. A high tech diagnostic shop with expensive equipment, then probably. Auto dealers also have high margins on the shop labor because a lot of the profit for the entire dealership is from service, and somewhat to used car sales. New cars are just the driver for the actual profit centers for a lot of them.

[Rok]

Booster:

It should be pointed out that the 70% figure is gross margin based on the employees rate of pay. When his (or her) rate of pay is $30/hr., with taxes, vacation, bennies, and overhead to compute all that, the actual amount the company pays for that $30/hr employee is more like $45/hr.

The employer also provides the building, utilities, etc. all of which cost lots of money. I've seen numerous businesses actually, in reality, I mean like FOR REAL, lose money on every sale and try to make it up in volume. They usually lost their businesses because they didn't keep track of their margins.

Off the top of my head, I can recall a Construction Company, a Manufacturer, and a Property Management Company I saw go under (3 different companies).

And, yes, I do have an accounting degree, I didn't know it showed that much.

..........Rocky

[booster]

Understood about the actual cost of an employee per hour, although that is all getting turned on it's head as employers drop health coverage, and such, or call everyone an "independent contractor" without any extra costs.

The variables of the add-ons to wages costs, is why using the wage is at best a rough estimate, and gets rougher every day, I think. In the good factories that I have worked in, we had a "labor rate" that included the bennies, plus an "overtime" rate for all of them also, by job classification (averaged the wages which did vary a bit), and if they were a contractor or temp. We also had an hourly rate for every one of our processes that included machine operating costs, amortization, charges by the square foot for space used based of total building costs, supplies, etc. These all included no margin which was added in when quoting based on the rest of the company burden costs, and how much or little of the burden applied to the type of job, and what profit was salable for that type of product. The actual margins could be hugely different based on what competition was selling the products or services for. The well run systems were great, and those of us that had to make sure we made all the stuff within budget costs knew they were realistic, as did all the operators, and all was fair. The poorly run systems would put out unrealistic needs that were essentially impossible to meet, rather than pass up a sale opportunity, which would qualify for your "we lose a little on each one, but we will make it up with volume" Trying to run a production facility with that kind of planning is a no win for the production side of things.

Personally, I think an RV shop that is paying it's help at the $16 level, and with the minimum amount of tools and overhead costs and such that are required (usually the employee has to furnish their own, I would guess), I think that something in the $60-$70 should be able to make them a reasonable profit, unless they have lots of non value added personnel on staff, which probably is pretty common in RV places. I think many of the places just want to make a very large profit, even is there no repeat business because of it, as there always is a supply on newbies in RVs, and fewer and fewer folks have the skills to do it themselves anymore.

[Rok]

Booster:

So you figure they should do fine charging $60 to $70 bucks? I think I would agree.

Someone who is competent in electronics, electrical, sewage, heating/refrigeration, woodworking, engine mechanics, AND is willing to crawl around in cramped places and deal with other people's fecal matter would be hard to find at any price. The other option is that they aren't all that competent an are a bit desperate.

Since most of the RV techs I've seen are missing a couple of teeth and are usually filthy, my bet is on the latter. Notice that I said most. There is that odd fellow out there occasionally who really likes the challenge that all the complex systems in an RV present and finds the puzzle fun. But since much of what we've had done hasn't been done right, I'm guessing you're right about the $16/hour thing.

And yet the dealerships often charge $100 to $120/hr. Because people will pay for it, and because businesses these days often have figured out that they can make a lot more money by telling their customers that they are doing a good job, then taking advantage of the situation by doing a slipshod job with semi-competent employees--More money than they can by having truly good employees and doing a proper job.

I guess that is why most RV repair places get scores in the 2's to low 3 range on Yelp and Angie's list, etc.

Have we had some good service people, HELL yes! The have become our go to people for help.

Our local MB Dealership rates 4+ and I would rate them that high, too. I think we are really lucky to have them in our area. We once were stranded in Las Vegas and got to experience a BAD dealership, and that experience has made us all the more glad we have a good dealer in our area.

[ManWonder]

Originally Posted by Rok

Since most of the RV techs I've seen are missing a couple of teeth and are usually filthy...

Whoa! I resemble that remark!

[Davydd]

Originally Posted by Rok

Booster:

It should be pointed out that the 70% figure is gross margin based on the employees rate of pay. When his (or her) rate of pay is $30/hr., with taxes, vacation, bennies, and overhead to compute all that, the actual amount the company pays for that $30/hr employee is more like $45/hr.

The employer also provides the building, utilities, etc. all of which cost lots of money. I've seen numerous businesses actually, in reality, I mean like FOR REAL, lose money on every sale and try to make it up in volume. They usually lost their businesses because they didn't keep track of their margins.

Off the top of my head, I can recall a Construction Company, a Manufacturer, and a Property Management Company I saw go under (3 different companies).

And, yes, I do have an accounting degree, I didn't know it showed that much.

..........Rocky

There are three other things I can think of that need to be factored in. Number one is a company has to make a profit and that has to be factored in. Secondly, no company works at 100% efficiency meaning every hour worked is not charging the going rate for the employees. Lastly, not all employees have chargeable hours and they have to be covered in the overhead. That's all why a chargeable hourly rate for work is way higher than the hourly wage.