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DONNA HARRIS

Ga. fleet deal puts dealers in a tough spot

Donna Harris covers automotive retailing for Automotive News.

Dealers would normally object if their manufacturer let an aftermarket competitor perform warranty work. But in this case, objecting to the loss of warranty business might make dealers look bad.

In a bid to save money and potentially lower taxes, the Gwinnett Board of Commissioners near Atlanta in Gwinnett County, Ga., has formed a partnership with General Motors that enables the county to perform its own warranty work on county vehicles.

GM will provide free training to Gwinnett’s fleet mechanics to perform warranty work on GM vehicles instead of sending those vehicles to a local dealership for repairs. GM will reimburse the county for warranty work at $55.82 an hour.

The agreement is win-win-lose. The county expects to save $100,000 annually, the board said in an announcement.

GM’s likely to save money, too. NADA reports that the average customer mechanical labor rate is $93, and automakers typically reimburse dealers for warranty work at prevailing market rates.

The only loser here is the dealer.

Gwinnett County said it intends to expand the program to other vehicle manufacturers in the near future.

I wonder how dealers will respond?

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