Ford Service $118 per hour + GST - fair ?

[SpoolMan]

OK lets debate this without the heat, if you going to get involved or start a thread and dont like the input of from other members replies or questions your better of not starting a thread.

For the record most shops I know charge between $110 to $130, these are not Ford dealerships.

Originally Posted by ratter

Why can't trade and professionals rate be comparable?

I agree Mick the costs involved in running a good workshop, staying update with knowledge and tools and everything else that goes with running a business isn't cheap.

[Auslandau]

Go to a Performance centre and see what they charge! A tad more than Ford must say

A plumber and an electrician can earn more than this ..... they are trades?

Where I get upset and have caused issues with me before is when you are paying high end dollars and they spend 10 -20 hours trying to source the problem for the R&D. I am way willing to pay this amount for actual work done .... not for them to find a problem that will help them diagnose the next car that comes along. To cut a long story short ..... happened to the extent of a few thousand over charged to eventually fix something that was fairly basic and cheap.

So ... in other words . .... no problem paying as long as it is done efficiently and well. Not paying for training.

[auxr88]

Can i just say this. How many of you people work and what do your bosses
charge you out. Most employees would have no idea they are in fairyland. As
a buisness owner yes my work shop is charged out at 100 per hour + gst
Get over it

[Franco Cozzo]

We where charging out at $110/H at Honda, and none of the boys on the workshop floor where on over $20/h.

But remember, its to pay for all your free coffees from the $7500 coffee machine, nice shiny workshop and showroom with a lounge in the service department for everyone, the 55" TV in that lounge, the $30 for the day new rental car, the nice uniforms the mechanics are in and the suits that the service counter staff are wearing etc.

Just selling the cars wouldn't pay for everything, in fact they probably sell the car just over even and then make back the money on the servicing, though labour and high parts costs when you bring it back to the dealership for a service.

The service department is usually the bread and butter for the dealership, constant stream of money coming in through servicing.

A local auto elec here charges out at $88/h, he is fairly cheap but its just him and two apprentices who do all the work.

[RASER]

No, its NOT excessive, they have huge overheads and outlay,what VERY is the price and profit on the spare parts and what they charge

ie/

Step motor VDO brand for LPG
Dealer $277
Repco $149
Ebay $ 90

WHY? Nobody would buy more than Ford, yet they charge the most?

[RASER]

Originally Posted by Big Damo

We where charging out at $110/H at Honda, and none of the boys on the workshop floor where on over $20/h.

But remember, its to pay for all your free coffees from the $7500 coffee machine, nice shiny workshop and showroom with a lounge in the service department for everyone, the 55" TV in that lounge, the $30 for the day new rental car, the nice uniforms the mechanics are in and the suits that the service counter staff are wearing etc.

Just selling the cars wouldn't pay for everything, in fact they probably sell the car just over even and then make back the money on the servicing, though labour and high parts costs when you bring it back to the dealership for a service.

The service department is usually the bread and butter for the dealership, constant stream of money coming in through servicing.

A local auto elec here charges out at $88/h, he is fairly cheap but its just him and two apprentices who do all the work.

The most profit a dealer makes is on selling 2nd hand cars

[yift]

Originally Posted by RASER

The most profit a dealer makes is on selling 2nd hand cars

WRONG! Most money made in a dealership is in the workshop. The workshop even charges the used car section to get the cars roadworthy.

[Elks]

A friend of mine a BMW serviced recently at an authorised dealer for a casual $200 an hour.

$100 to $120 an hour seems reasonable. Remember this needs to cover all the overheads, rent, electricity, un-applied time, work you can't charge for, rework (sadly) as well as wages and on costs. Do the math, the bottom line is still pretty thin.

[graham7773]

I know about overheads including wages, utilities company tax, communication and sundry other costs but how can my mechanic, his father, also a mechanic, his son, also a mechanic all work on my car at the same time and still charge me only $50 per hour. and they are working from rented premises in a large car and heavy vehicle service station. I am rapt with it

[jixel 78]

It must be fair. Were absolute flat chat turning work away at the Ford Dealer I work for....alot of people coming in to get cars fixed after umpteen attempts by the cheapies.....go for it, they all come back to us when it goes pear shaped. `Ahh I dunno what to do. Send it to Ford.....I cant fix it.` We have a superb relationship with several independants around us. Only the favours cant be reciprocated, but meh, they pay us and charge their customers on top. Might aswell have taken it to the dealer in the first place.

[randel]

so rodge what do you do for a living and how much for me to use your services?

[RASER]

Originally Posted by jixel 78

It must be fair. Were absolute flat chat turning work away at the Ford Dealer I work for....alot of people coming in to get cars fixed after umpteen attempts by the cheapies.....go for it, they all come back to us when it goes pear shaped. `Ahh I dunno what to do. Send it to Ford.....I cant fix it.` We have a superb relationship with several independants around us. Only the favours cant be reciprocated, but meh, they pay us and charge their customers on top. Might aswell have taken it to the dealer in the first place.

I agree

I found Bayfords genius, fix even complicated and big jobs first go no issues and really no more for labour than other workshops, screwing us on parts prices though

Oh, and Lindsay the CEO should NOT rock up to work in a BMW, Ford should force all dealers principals to rock up to work with Ford products only

[jixel 78]

Haha our DP drives a Fiesta Diesel. Beemer? Thats takin the p*ss....

[mik]

i don`t think most people have a clue at what cost`s are involved in running a work shop, $120ph sounds fair to me, i suspect after costs are taken out of the 120 ph there would not be a fortune left, i`d be spewing if i had a 2000 dollar bill or what ever it was, but companies have to make some profit or go broke simple as that.

[danthefordman]

Just to assist in the understanding of how companies cost out their staff, the following example is derived from a surveying practice but would be very similar for one of these large automotive dealerships. You have to remember that the small one man mechanic shops aren't paying for all the support staff and bells and whistles you get at a dealership, not trying to indicate one is better than the other just stating a fact. My apologies for the math lesson and length

Example
HOURLY RATE = BASE COST PER HOUR × OVERHEAD FACTOR
Suppose an employee salary of $50 000 pa based on 38 hour week
4wks annual leave, 2 weeks public holidays, 2 weeks sick

Base cost
$50 000 / [(52-4-2-2) x 38hrs] = $29.90 per hour

Overhead factor cost
The total cost of having a person on staff is considerably greater than the amount of money that is actually paid to that person in wages. We must determine the actual total cost to the firm of employing a person.

These figures are based on realistic percentages. I could not get a table to work here so i left them out other wise it was impossible to understand

Direct costs
Salary $50,000
Salary On Costs
Annual Leave 5,250
Public Hol & Sick 2,875
Long service 925
Payroll Tax 3,250
Work Cover 575
Super 3,500
Total Salary on costs 16,375
Total Direct Costs $66,375

Indirect Costs
Indirect Salaries
Non chargable salaries 5,000
(admin cleaning etc)
Proposal Time 5,000
Other non productive time 5,000
Professional development training etc 2,500
Total Indirect Salaries 17,500
Indirect salary on costs (32.75% x 35%) 5,731
Total indirect costs $22,231

Overhead Costs
Travel and vehicle costs 5,750
Consumables 5,325
Premises and equipment 12,875
Depreciation Expenses 8,975
Job writeoffs bad debt 2,500
Total Overhead costs $35,425

Therefore, the total cost of employing that person is the sum of the following:
Total Direct Costs $66 375
Total Indirect Costs $23 231
Total Overhead Costs $35 425
= $125 031
Which represents 2.5 times the annual base salary! If we charge less than this, we are losing money!
Profit
As a general rule of thumb there should be about one third profit from gross fees. This means that our charge out factor in the above case would be 3.75.
As mentioned, the amounts above are paid for one year’s work:
5 days per week × 52 Weeks = 260 Days
But the actual average number of working days worked by an employee will be somewhat less than this due to the following:
Annual Leave 20
Public Holidays 10
Long Service Leave Provision 5
Sick Leave Provision 10
Work Care Leave Provision 1
Maternity Leave Provision 1
Study Leave Provision 2
Special Leave Provision 1
Total Average Non-working Days 50

This means there are on average (260 – 50 =) 210 working days in a year. If we assume a 35 hour week this equates to 7 hours per day or (210 × 7 =) 1470 hours per year. It costs us $125 031 to employ the person. We would like a further $62 515.50 profit from this employee. This means we should receive $187 546.50 in gross fees from the work of this employee. This means that our charge out rate for this employee should be:
$187 564.50 ÷ 1470 Hours = $127.58 per hour.
Just to break even ($50 000 ÷ 1470 Hours) × 2.5 = $85.03 per hour any less then we are losing money.

So while there are some definite differences in the automotive industry to the surveying industry, i think you get the picture. It isn't as easy as it seems to stay cost competitive in one of these businesses. At the end of the day we must decide whether or not the service supplied by the big business is worth the extra cabbage.

[mickbundy]

Seems fair it is around the the same $ as a contractor earns in the mining gas game a hour in W.A

[Feathers]

I think it's pretty fair. There are other tasks behind the scenes that still need to be done. Disposing of used oils, tyres, parts etc. Not much of that is free these days, so it has to be covered by everyone.

Personally, I charge $140/hr + G.S.T. to audit accredited transport companies in NSW. It's a compulsory requirement, and there are only 23 people in the state that are certified to do it. Most of whom are not in the Sydney metropolitan area, and there are currently no plans to run the course again, so we can charge pretty much whatever we like. It's pretty sweet.

Last month it cost an operator $616+ for me to tell Transport NSW that he didn't have a valid licence for the vehicle he was operating (one man operation), and get his accreditation suspended.

[Crazy Dazz]

There is NO WAY you could call that excessive per sae.
Unfortunately some people simply have no idea about the need to price in overhead, tools, equipment, entitlements, non-productive time, etc, etc.

Ultimately the question of fairness relates to what you get for your money. If it’s some pimply git who last week was collecting shopping trolleys, then it’s excessive, but if that’s for an experienced technician, then it’s dirt cheap.

[prydey]

Originally Posted by Fiesta_Man69

WS Fiesta 60K service. A choice:

$405 "fixed" price at Sinclair Ford

or

$154 total for parts and labor; at my local mechanic, all parts supplied by me, charged for 45 mins labor (bout $70)...(And I've been going to him for 10 yrs).

Perhaps this is why dealerships like Dale Ford have gone bust, and why Ford Aus posted a record loss in 2011. If I worked at Ford I'd be very concerned.

can your local mechanic update the pcm?

[excopau]

Holden in Townsville was charging $121 5 years ago so imagine what they charge now

[Rodge]

Okay so there's a wide range of views and one interesting theoretical costed analysis.
I havn't got time to answer all the questions that have been directed at me but I will comment as follows:

1. On costs appear to be materially different in Aus and N.Z.
2. Trade rates also appear to be materially different between the two countries, (possibly due to the rates paid to in the mining industry in Australia underpinning a much stronger and more robust economy)
3. Any Tax lawyer being billed out at $900 per hour would have to be one of the best in the country litigating serious hard core commercial issues and be winning most of the time to be worth anything like that rate. Given that on the balance of probability this isn't the case then yes, i think that's a seriously excessive rate for any professional to charge.
4. Mercedes-benz provide what I consider to be a "Gold Standard" of service with absolutly five star customer lounge and service centre, compliemtary everything you can imagine, free loan cars, an immaculate grooming of my vehicle, heck even a free premium quality umbrella with my first service and all @ $120 per hour.
5. If that's the gold standard in local service, the benchmark if you like, which I think it is then by deduction if they're providing a $17 million dollar five star servicing facility and charging that rate, (Ford provide a far, far lower standard of facilities and service, (e.g. very, very basic waiting room, no free loan cars, no complimentart car grooming), yet feel they can justify $118 per hour. I don't think they're worth it but everyone has their own opinion, that's why I set up the poll. I back my opinion by taking my SC GT-P to my local mechanic, at least I know, and therefore he knows the correct oil to put in my car, unlike it seems many of the Ford dealerships none of whom appear to have been given any training on the new SC engine.
I see some recent comment regarding pcm updates. Last time I got one of those on my F6, it went slower and ran worse. Why would I want one on my SC GT-P when its running perfectly.

At the end of the day people will make their own call.
If I was confident that the local Ford dealer would use the correct oil in my car, do a thorough and professional job and charge me only for the time spent on the car then as long as I got a free loan car and a decent cup of cofee I'd be happy to pay their rate...

Fixed price servicing is in my opinion a good thing. At least people can see upfront what they're getting and what it costs and can make their own judgement call on whether that's fair. Its overdue this was implemented in N.Z. and if it is I might reconsider where I get my FPV serviced.

[GT0132]

Originally Posted by Rodge

3. Any Tax lawyer being billed out at $900 per hour would have to be one of the best in the country litigating serious hard core commercial issues and be winning most of the time to be worth anything like that rate. Given that on the balance of probability this isn't the case then yes, i think that's a seriously excessive rate for any professional to charge.

That rate's common across the major law firms and the top 4 accounting firms in Australia for a tax partner specialising in transfer pricing/ cross border transactions and corporate restructures, not necessarily litigation.

Defence lawyers acting for a party against the ATO in a litigous matter are generally cheaper than that

[JC]

Originally Posted by Auslandau

......................
Where I get upset and have caused issues with me before is when you are paying high end dollars and they spend 10 -20 hours trying to source the problem for the R&D. I am way willing to pay this amount for actual work done .... not for them to find a problem that will help them diagnose the next car that comes along. To cut a long story short ..... happened to the extent of a few thousand over charged to eventually fix something that was fairly basic and cheap.

So ... in other words . .... no problem paying as long as it is done efficiently and well. Not paying for training.

This.......totally agree. Ford charge the same to change rear diff bush on a Territory as they do an a BA, but on a Terry, it can be done quicker because there is better access, but they still charge what the book tells them to, not what it actually took.

[302 XC]

Originally Posted by SpoolMan

the costs involved in running a good workshop, staying update with knowledge and tools and everything else that goes with running a business isn't cheap.

This is exactly correct

The rents alone for some of these big workshops would make your eyes water
IF we were all honest,paid our bills on time, rents were reasonable,power wasnt goin up daily, the wages wernt as high as they are,we could pay a fair price for a fair job

[aussie muscle]

Originally Posted by b0son

Pricey, even for a fully qualified mechanic... total rip-off for an apprentice.

i've never known a shop to charge less if the apprentice does the work, even though it's costing them less.

[Rodge]

Originally Posted by GT0132

That rate's common across the major law firms and the top 4 accounting firms in Australia for a tax partner specialising in transfer pricing/ cross border transactions and corporate restructures, not necessarily litigation.

Defence lawyers acting for a party against the ATO in a litigous matter are generally cheaper than that

WOW even I'm surprised by that. $900 per hour plus GST, almost takes your breath away.

[BadMax]

Originally Posted by yift

unless you have worked in a workshop you will not know how much money is required to operate one.
is it against the law for them to make a profit?

Somebody with some semblence of reality.

Originally Posted by DASH GT

I don't see the point in this thread.

It's just another justification to rant over someone making a profit at their expense. or in other words, 'strength in numbers'. this is the way some people justify their own opinions when there isn't much substance to them.

Originally Posted by Rodge

Trademan's rates and professionals rates have never been comparable and probably never will be and your tone and content is therefore inappropraite.

Case in point. Using the example Hunter8 quoted above of $57 to see your vet which is usually a 15 minute appointment, inplying a professionals rate of $207 per hour plus GST which FYI is not dissimilar to my own. That Vet has had six years in University education before they earn a cent and spent how many tens of thousands of dollars on their university education. Even when they're a qualified vet they probably earned not much more than tradesmans wages for the first few years of their career.

Lets keep it on topic now can we if that's not too much trouble.

Firstly, with the above, you are taking it OT.

I resent your train of thought. A person with an education is not automatically entitled to a superior income or viewed in the community as higher being, yes you have just stated someone with an education should be treated different to a trades person and is not entitled to earn a greater income.

You are obviously not a dim witted person, but your views are rather narrow and single minded, I in fact i believe you struggle with real world issues. I ask what experience do you have in running a workshop? Sure, you as a bean counter will see nothing but numbers running across a page, but this does not tell the whole picture.
I ask, why you can justify your $200+ per hour charge? When was the last time you sent maybe 10 techs on training, or update millions of dollars of equipment? Or possibly paid $100,000 in rent pa, floor plans etc? Sure MB may charge a similar rate, what was their profit margin on the sale of the vehicle? Is their equipment really any different these days?

I think you are undervaluing a good technician, don't forget you are in charge of a two tonne bullet and every time he touches your car he is also responsible for your safety.

I have seen a trades person had over $15,000+ invoices for one weeks labour charge and that was about a 50 hour week. Don't think some form of education is the path to a high salary. maybe have a look at the likes of Branson, Fox even chefs like Jamie Oliver or that other foul mouthed guy.

BTW, $118 is about where it's at, 4-5+ years ago I was paying $103 at Holden.

[Smoke Pursuit]

Your not just paying for the technician either people... What about the service advisor that books the car in, calls you during the day with updates etc? Do they come for free? Then you have the little warranty clerk sitting in an office liaising with Ford all day on warranty claims... Are they free too? And lets not forget the parts interpreters that order and supply the parts for your service? Do oil filters and warranty claim parts fall out of the sky??? Then you have a service manager to oversee it all, liaise with Ford on new and upcoming models, new service bulletins, recalls etc.

Then you have payroll tax, super, advertising, rent / workshop costs / specialized tools and equipment (which needs replacing believe it or not), computers and other ancillary items. Ford aren't like Mercedes, they don't have big margins on new cars to pay for high roller waiting rooms. I always get a free loaner at my dealer too...

So while its easy to come on here and whinge about what service technicians are charged out at, its easy to see that there's actually more involved then just their hourly wage. Your $118 an hour isn't just contributing to their wage, its contributing to up to 5 people that may work on your repair order during that day.

As I have already said Fixed price servicing in Aus has fixed alot of the issues between different dealers... Providing your car is less then 4 years old you can go anywhere and know how much its going to cost! Pretty fair if you ask me compared to the old days.

[Rodge]

Badmax - FYI Flappist was the one that wanted to turn this into some sort of tradesman v professional thread and was the first to take it off topic.
I'm not going to get into a protracted debate on the matter. If you think a qualified professional with 30 years experience isn't worth $200 per hour that's your perogative.

Try and remember however that the guy has had many years earning nothing, in fact expending tens and tens of thousands of dollars on their education. In the case of my vet, the example I posted earlier, my wife tells me its actually a seven year degree course, he's probably spent another five years working as a junior vet before he started earning a decent living. That 12 years training before he can charge his $200 per hour and only after either buying into an existing practice or setting up his own with all the specalist equipment required. Vets are bloody good value if you ask me !!

Remind me again how much training did Ford give to their technicians before they let them loose on our Supercharged FPV's...that's right NO specific traning was given, why do you think many of the shops are putting in the incorrect oil for goodness sake ?

F.Y.I. I have never been into class distinction B.S. I'm just another guy like anyone else, in fact my best mate who i've been friends with for nearly 40 years mows lawns for a living and we're great mates.

Had a good discussion with the Mrs at lunchtime about this, she reckons blue collar trasmen are the new professionals. Heck if a good mechanic on an oil rig can make circa $A250,000 I'm tempted to wonder if I made the right career choice

At the end of the day there are going to be huge trans-tasman differences between operational costs of a dealership, that much has become abundently clear.

Obviously I see things from my own local perspective.
M Benz here provide an absolute top of the line Gold standard five star service @ $120 per hour. Their customer lounge is just like the lobby of a five star hotel, free M Benz loan cars, immaculate car grooming for free, finest coffee and other drinks free and so on... For all I know Sydney M Benz dealerships might be $200 per hour but that's not relevant to me.
Honda here provide what I would describe as a silver standard service at $95 per hour.
Ford provide a bronze star service that in my opinion is materially lower than what's provided by the Honda dealership, (Honda have free loan cars and full valet of your car upon return and a very good standard customer lounge, snacks, coffee, internet access and so on)
Ford services are materially lower than that at the dealership I used to go too, no car grooming, no free loan car, small cramped customer lounge equipped to a very poor standard yet they want to charge five star Gold standard prices WTF ? If they were providing a five star gold standard service frankly I wouldn't mind but you can't charge Gold standard prices and deliver a bronze standard service, eyebrows are raised and people with common-sense go elsewhere.

Either Auckland Mercedes-benz and Honda dealerships which are premier facilities of their type based in central Auckland are too cheap, or the local Ford dealership with its very average facilities is too dear, naturally i'm in the latter school of thought.

I'm "over" the hourly rate distinction between professional and tradespeople thing, if people want to debate that further on this thread I can assure you I won't be part of it. Perhaps if they really feel the need to go there any further they should start their own thread in the appropriate section.

The reason I made this into a poll is so we could get a read on what the average Ford customer thinks of this sort of hourly rate. To date its interesting to note that ~70% think this rate is either excessive or somewhat excessive. Local competitors from different brands would tend to support that proposition too.

[GT]

Closed as requested by the OP - can we not discuss things better folks? There is no need to become personal and hostile. We all are entitled to our own opinion and those are formed by our own life experiences and expectations.