Auto Repair Labor Question....

I finance quite a few auto suppliers that have gone into bankruptcy, and exited. The latest example was Delphi......here's my question: The hourly wage rates for almost all of the tier one suppliers has been negotiated down to ~$36/hour, with further drops to ~$26/hour over time to eventually reach near parity with foreign labor costs. Typically, health benefits add ~25-30% additional labor burden per hour, thus, the fully costed hourly wage should be less than $50/hour. My dealership bills labor out at $90/hour. Will the dealers labor repair rates drop in line with the rest of the industry? Or remain high due to geographical license monopolies and local demand?

 

I haven't seen it or heard of any decreases in the Midwest yet. There are all sorts of guys on Craigslist advertising "mechanic" and their rates are 50-60 bucks...come on if your hurting for cash its supply and demand.

 

I don't see the labor rates decreasing for techs. Several shops are running specials to garner business in this economy but of course that comes off the gross end. The overhead stays the same. As with anything you get what you pay for. I bill $135 per hr.

 

Holy sh*t! I'm in the wrong field! That's $280,000/year based on 40 hours a week over 52 weeks. That's Executive VP range at my employer!

 

the guys around where i work bills 80 to 90 and hour. I bill 49.95 for 15 minutes. (smog test)

 

Techs are flat rate unless your in a supervisory role at a dealer i.e shop foreman.
No I'm not rich but I'm not hurting by any means either. I have a nice house, the gallery pic shows my detached garage (albeit a small piece).

I live debt free except for small mortgage payment.
Getting back, it's possible to make a good living doing it but there is stress involved when working on high line cars and dealing with the logisitics not to mention the emotions and fervor that comes with working on expensive "babies".

From a fiscal standpoint, no labor won't go down at a dealer. The service department is a fixed ops unit and right now with sales slow they are tasked and under the microscope.

 

The labor rate at the dealership I work at recently went up to $105.00 per hour.