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  Management Feature

'What Would You Do?'

Posted 6/9/2011
By T.J. Reilly, AAM

Every shop owner runs into 'situations.'
How they handle them is important.

Editor's note: Shop owners run into "situations" all the time - situations that leave them scratching their heads, trying to figure out how to resolve the issue fairly to everyone concerned. They want to make the right decision in solving a dilemma, but things are not always black and white. Sometimes there are gray areas. Following is a good example of just such a dilemma. What would you do?

'What Would You Do?'This situation comes from a person who purchased an existing auto repair shop. The previous shop owner had promised anything and everything to his customers to keep the shop going during the sale process without regard to future consequences.

The new owner encountered this problem: A customer called and said the engine the shop had just rebuilt had failed. The customer had been told he had a two-year or 24,000 mile warranty on the rebuilt engine.

That sounded reasonable, but there was nothing in writing.

After researching the situation, the new shop owner found nothing had been said to the customer about a follow-up inspection, monitoring gauges and fluids, and what to do if there was a problem. The problem occurred while the customer's son was driving on the freeway. The engine developed an oil leak, the oil light came on, the engine temperature gauge went full hot, and not being an experienced driver, the son drove it until it would go no further.

The new shop owner called a tow truck, got it to the shop and found it had gotten hot enough that the crank was seized. After inspecting the engine, the shop owner decided it was pretty much a total loss.

Obviously, the new shop owner faced a dilemma. How should he handle the situation?

What would you do?

Douglass Kirchdorfer, AAM

Douglass Kirchdorfer, AAM, owner, Downing Street Garage, Denver; member, ASA Mechanical Division Operations Committee: "As a new shop owner, his best message to the old owner's clientele would be to assume the risk and replace the engine.

"With the replacement engine would come a new set of requirements on what would be covered in the event of a second failure and what would not.

"I would also review what caused the failure. If it was determined that the cause was poor work quality, I would have a meeting with the tech that did the engine installation. The technician should be accountable for his work quality.

"If it was determined to be a part failure, I would seek reimbursement from the part supplier.

"Then I would schedule the vehicle back in two weeks for a reinspection."

Here is what the new shop owner did:

"As 'Dad' seemed like a reasonable person, I recommended we replace the engine with a low-mileage, used unit I had located. After I showed him the estimate, he offered to pay half. I felt relieved; I really thought I would end up paying for a full replacement block and rebuild.

"I was ready to step up to multiple options, though, because as the new shop owner
I didn't want to risk any bad word on the street. You can be sure, we quickly instituted a full checkout process in our operations manual for any major engine work performed. It calls for us to review with the customer how to keep the warranty valid, including exclusions that apply.

"And over time, as things turned out, 'Dad' had multiple vehicles (and multiple sons) and turned out to be one of my best customers."

Here is what T.J. Reilly, AAM, would have done:

"As the new shop owner, I would honor all warranties - written or not. Since the greater majority of new customers come from referrals, there is nothing more important than going the extra mile.

"One of the options often overlooked by many shop owners is the offer to purchase the vehicle from the customer. This gives the shop the ability to fix it when the shop is slow and then resell it.

"Many times, when you are selling a rebuilt engine, the cost is more than the vehicle is worth. Purchasing the vehicle and scrapping it can often be more cost-effective."

T.J. Reilly, AAM

T.J. Reilly, AAM, is the owner of Same Day Auto Service, an ASA-member business in Clackamas, Ore. His e-mail address is


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