Chicago dealership technicians' strike highlights issues affecting all dealerships
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October 23, 2017 01:00 AM

Techs' strike in Chicago highlights work-force issues affecting all dealerships

STEPHANIE HERNANDEZ McGAVIN
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    ROBB DAVIDSON
    Richard Madonia, a 23-year-old lube technician at Community Honda of Orland Park, is the type of young worker the industry aims to retain -- and the new contract with Chicago area dealers is designed to help advance.

    For seven weeks over the summer, 2,000 service technicians went on strike at 129 new-vehicle dealerships in the Chicago area, seeking better pay and working conditions.

    One dealer estimates the walkout cost his store hundreds of thousands of dollars in lost service revenue. Another calls the strike "unnecessary ... devastating" and says it left him "bitter."

    Yet the terms of the strike's settlement deserve attention because they address challenges that confront all dealership service departments — not just unionized shops in one city — as they seek to recruit and retain productive technicians.

    The stakes are higher than ever for dealerships in the competition for techs. As new-vehicle sales cool, fixed operations will account for a greater share of dealership profits in coming years. The chronic shortage of technicians will grow more acute as those now on the job retire.

    And as the cars and trucks coming into the shop become ever more complex, the training and skills required of techs will have to be more sophisticated as well. So the status of service technicians becomes increasingly critical.

    Tech portrait

    The typical service technician at a new-vehicle dealership

    • Is a 40-year-old man
    • Has 19 years of tech experience, mostly at dealerships
    • Earned nearly $59,000 in 2015
    • Has been in his job for 3.6 years and expects to stay at his dealership for at least 3 more
    • Has a scheduled workweek of more than 42 hours
    • Spends most of his work time on diagnostics, vehicle maintenance and light repairs
    • Attended college and/or technical training
    • Would not recommend his career to a friend
    • Source: Carlisle & Co., National Automobile Dealers Association

    A face of the Chicago strike is Richard Madonia, a 23-year-old lube technician at Community Honda of Orland Park. He has held his entry-level job for nine months and expects to spend about two more years in a tech-training program sponsored by his union.

    Madonia notes that many fast-food workers in Chicago are paid better than he is. Still, he says he enjoys his work and wants to keep doing it — at least for now.

    The strike settlement aims to enable dealerships to retain younger service workers such as Madonia by boosting the hourly pay of beginning lube techs from $9 to $11 and of semiskilled technicians from $11 to $13.

    In the longer term, the contract includes a formal performance review after 24 months for semiskilled techs who seek apprenticeships — a vital next step on the technician career path. That's important, Madonia says.

    "It's kind of hard to get locked into an apprenticeship because [the dealership is] going to have to guarantee you a position as a journeyman," he told Fixed Ops Journal. "So if the shop has a lot of journeymen, they're not really looking to hire apprentices."

    The Chicago tech strike and its aftermath come at a time of turmoil for service technicians and the dealerships that employ them. The National Automobile Dealers Association's 2016 Dealership Workforce Study reported that one-fourth of techs leave their jobs each year.

    The median job tenure for techs was 3.6 years, according to the NADA study. Only 1 percent of service techs were women.

    Separately, a survey last year by the automotive consulting firm Carlisle & Co. asked more than 20,000 service technicians in the United States and Canada whether they would recommend their career to others. Their overall response: an emphatic no.

    The greatest sources of job dissatisfaction identified by the survey respondents: their compensation (flat-rate pay plans were especially reviled) and a feeling that the dealership and automaker they work for don't properly value what they do.

    "People are leaving in herds," says Dan Costley, a journeyman technician at Garber Fox Lake Toyota who took part in the Chicago strike. "The younger guys are seeing the career is not what it's cut out to be.

    "I've got two friends who left in the past year and went back to college," he says. "Both are smart as whips, but they're done."

    John Thompson is chairman of the automotive technology department at Pittsburg State University in Kansas, which offers one of the nation's top academic programs for training dealership service employees. He calls the employment climate for service techs "a disaster waiting to happen."

    "We have an aging work force, and young men and women aren't trained and ready yet," Thompson says. "You're seeing it slowly unfold, but it will quickly unfold when more and more people retire."

    Not all bad

    The situation for techs is not utterly bleak. The NADA workforce study reported that the average dealership service technician earned nearly $59,000 in 2015 — a solid middle-class income. The most skilled and experienced techs command six-figure pay.

    According to the Carlisle study, the average service tech is about 40 years old and has 19 years of shop experience. Despite their complaints, 70 percent of the technicians in the survey said they expected to work at their current dealership for at least the next three years.

    Tim Richards, a 21-year-old apprentice tech at Elgin Chrysler-Dodge-Jeep-Ram, is the type of young worker the industry says it wants to nurture. He says being a service technician is the career for him.

    "I've always worked on cars, and I'd build and race cars," he says. "Automotive is my niche. Why not make a career at something I'm good at?"

    During and after the strike, Richards says he maintained his confidence that he will become a master technician someday.

    "I didn't feel worried," he says, "because with my training and ability, I would have been able to progress faster."

    The new contract in Chicago aims to respond to the concerns of veteran technicians as well as those of 18- to 34-year-old workers, who NADA says represent two-thirds of newly hired techs.

    But officials of Automobile Mechanics Local 701, the union that represents the striking service techs, concede they didn't get everything they wanted.

    Cicinelli: "Not as good" for techs

    Sam Cicinelli, the local's directing business representative, says the contract will guarantee technicians as much as 36 paid weekly hours of work, up from 34 — but the union wanted 40.

    Cicinelli says most veteran technicians represented by the local work as much as 50 hours a week. But they often earn less because of the flat-rate system they work under, which pays experienced techs primarily by the repair job rather than the hour.

    Contract provisions lengthening the guaranteed workweek and offering other incentives only partially relieve that disparity, Cicinelli says.

    Technician Costley calls flat-rate pay "a prehistoric, barbaric way of paying. They should be paying at an hourly base," he says.

    Pay gap

    Richards, the youngest tech in his shop, says Chicago-area dealers have exploited poorly paid techs in the semiskilled category, which he argues should be eliminated.

    "Would you rather pay the semiskilled worker $15 an hour or pay the journeyman $35 an hour for that brake flush?" Richards says.

    He notes that the new contract reduces apprenticeships from 10 to five years. But service departments need to pay more attention to the quality of apprentice training, he says.

    Apprentices should be formally partnered with journeymen, he suggests, "instead of being thrown into the industry as an apprentice and learning to do everything yourself."

    Otherwise, the union's Cicinelli says, the contract makes gains for younger techs, "but it's still not as good compared to other trades and other jobs."

    "Electricians make $18 to $20 an hour at the entry level," he says. "A plumber has a little bucket of wrenches to invest in, and we have a toolbox the size of a condominium."

    Harold Santamaria, an instructor in the automotive technology program at Truman College in Chicago, says many of his tech students who "graduated and got a job said it wasn't as rewarding as they thought it could be."

    Some talented students have worked as lube techs for four years without the prospect of advancement "because they did the job too well," he says.

    Dealers speak

    The Chicago dealers whose techs went on strike have complaints of their own. Greg Webb, a partner at Packey Webb Ford in Downers Grove, says the strike "cost the mechanics and us a lot of money, and neither of us is getting it back."

    "The dealerships that weren't on strike had so much [service] business, they were turning it away," Webb says. "If some of my customers went to another Ford store and got taken care of properly, there's a real possibility they may not come back here."

    Richard Fisher's seven dealerships in the Autobarn group endured the strike. He says the cost of the new contract will make it even harder for his company to stay competitive.

    "The [pay] rates of all of our mechanics have gone up sharply," Fisher says. "Inevitably, the things we care about — giving great service to our customers and attracting young people to the business — will be stymied if our costs continue to climb."

    Fisher and some other dealers worked to dissociate themselves from the dealership bargaining committee and cut their own deals with their striking techs. "We felt they were our guys first and union guys second, and we wanted to get them back to work," he says. "I felt bitter in the overall way [the strike] was managed by both sides. I feel, ultimately, the strike was unnecessary."

    Even after the strike, industry observers say dealerships in Chicago and elsewhere aren't properly preparing their service departments and training their shop employees for innovations such as emerging electric and autonomous vehicles.

    Steve Tomory, who teaches automotive technology at Rio Hondo College in Whittier, Calif., predicts service technician training will need to become based more heavily on STEM (science, technology, engineering, math) topics. A tech's job, he says, "may become more of a salary-based position."

    In Chicago and everywhere else, says Thompson of Pittsburg State, the primary responsibility for redefining the role of service technicians to accommodate a changing industry rests with dealers and automakers.

    "The manufacturers will have to partner up with the dealers and say, 'How do we grow this work force?'" Thompson says.

    Rob Gehring, a fixed operations consultant in Huron, Ohio, agrees.

    "I have said technician is a good career many times," Gehring says. "But the attitude needs to change at the dealership and manufacturer level."

    He adds: "I wouldn't be a technician."

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