Fixed Ops Journal - June 2019 - F28

FIXED OPS JOURNAL

HANDS ON

FLAT RATE FOE

Dealer has paid his service technicians by the hour ---- for 25 years

F

or Coleman Hoyt, a straight-talking
new-vehicle dealer in Acton, Mass.,
the flat rate pay debate is over. And so
is the service technician shortage.
Last year, the service advisers at Acton
Chrysler-Dodge-Jeep-Ram wrote 16,142
repair orders. The18 techs who repaired
those cars and trucks got paid by the hour,
not the job. And it's been that way at Hoyt's
dealership for nearly 25 years.
"Technicians in my store, when they are
RICHARD
on
their way to work on Monday morning,
TRUETT
know how much money they are going to
rtruett@crain.com
make that week," Hoyt, 67, told me. "They
Fixed Ops Journal
are not variably compensated unless they
are asked to work longer hours. Their
enthusiasm to get involved in problem resolution is different than guys
who feel like every time you give them a hard job, they are getting
screwed. That's what happens in most stores today, with the ridiculous
complexity of the products we all have.
"Dealers give the hardest
work to their most seasoned
"Dealers give the
people and most highly trained
guys, and they are the ones who
hardest work to their
are disadvantaged by the type
most seasoned people of work that is assigned to
them," he adds. "It's not a
and most highly
thoughtful way to operate a
trained guys, and they business. You are exposing your
most valuable, hardest to
are the ones who are
replace personnel to
issues that are
disadvantaged by the compensation
not of their own making."
Hoyt despises the flat rate
type of work that is
system and uses it only for three
assigned to them."
entry-level employees who do
quick oil changes and other
COLEMAN HOYT, president,
minor jobs. Once you hear his
Acton Chrysler-Dodge-Jeep-Ram
unusual story, you'll
understand why.
Hoyt is one of the few dealers who got his start in the business
wrenching on cars. The experience of working as a dealership
technician solidified his ideas about how techs should be paid. He is
also the rare dealer who has worked at an automaker; he was a Ford
Motor Co. service zone manager in the 1980s.

"

"

Pay experiment
After Hoyt left Ford to become a dealer, he took part in an experiment
in the mid-1990s that set the course for how he runs his dealership
today. Around 1995, Ford wanted to see whether technicians would do
higher quality work, and improve service customer satisfaction, if they
were paid by the hour rather than the job. A bit ironic, since Ford was
the first major automaker to urge its dealers to adopt the flat rate

PAGE 28

JUNE 2019

system more than a century ago. Today, Ford says it is not "taking a
particular position on technician pay plans."
At the time, Hoyt says, Ford recruited about 30 dealerships, both Ford
and Lincoln-Mercury, to participate in an experiment it called the
Service Improvement Program. (His dealership switched its affiliation
from Lincoln-Mercury to Fiat Chrysler in 2011.)
"Ford people came to the store and assisted in explaining the flip
from flat rate to hourly," Hoyt recalls. "Ford also agreed to unlimited
straight time for warranty work and other nuances.
"It worked. Our customers were happy and employees were happy.
But the Ford folks couldn't validate that in their customer satisfaction
system at the time, called QCP (Quality Commitment Program). I think
they properly concluded that hourly pay would only work in honest,
straight stores with hardworking, smart service management. There
weren't enough of those."
After the test ended, the other dealers switched back to flat rate. But
not Hoyt. With Lincoln-Mercury sales sinking and his techs standing
idle, Hoyt decided to open his shop to work on all vehicle makes and
models. Paying his techs an hourly rate enabled him to do that, he says.
"All our A, B and most of our C techs are hourly," Hoyt says. "Over the
years, it has proven to be very, very favorable to long-term employment,
to being able to hire talented people from other dealers who don't do
the right thing with their techs, and to fixing cars right the first time."

Power failure
Hoyt says the computerized, electrified components in today's new
vehicles make it essential for dealers to retire the flat rate pay system.
Intermittent, hard-to-trace electrical problems are misery for flat-rate techs,
he says, because they can take so long to diagnose before repairs can begin.
"If you and I are working side by side in two bays in the garage, and
the dispatcher hands me an intermittent, unverified electrical problem
and you are hanging a four-wheel brake job on a car, I want what you
have," Hoyt says. "I can't get the job I have out of my bay. I am not going
to make any money, and my wife is going to be mad at me because I
don't know how I am going to make my mortgage payment."
As for keeping his techs motivated, Hoyt says if the store sells a certain
number of service hours per month, all the techs share in a pro-rated
bonus that can range from about $150 to $600 or more.
The discussion reminds me of a conversation I had not long ago with
a master technician with 30 years' experience in a dealership. He's a flat
rater, and he told me he was saving money to take his wife to a concert
out of town. But because he didn't know how much he would earn from
week to week, he wasn't sure whether he could afford the trip.
There has to be a better way. Maybe Hoyt's strategy of hourly pay for
experienced techs and available bonuses for all is the answer. 
Fixed Ops Journal - June 2019

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