December 2007 Newsletter
Contents
1. 5 7 days after scanning before submitting the claim To be sure dealers should use the UPS website and tracking number from the tire s to determine when the tire is re ceived by the manufacturer Sometimes it is 5 7 days but not always Only then should you submit the claim for pay ment and save yourself a lot of rejects VIP Customer Order Form I Warranty Matters would be honored having you as a subscriber Just 159 95 brings you 12 issues or 289 95 brings you 24 issues of Warranty Matters GM Edition Invoiced with receipt of 1 newsletter i i Name i Title I I Dealership I Address City State Zip I I Number of Issues 12 159 95 or O 24 289 95 4 Ways to Order M Fax this page to 901 386 4000 Mi Call us at 901 377 6975 Mi On line at warrantymatters com i Mail to Warranty Matters 9110 Valkrie Lane Suite 100 Lakeland TN 38002 9228 Warranty WT Aatlers Warranty Compliance amp Consultation 9110 Valkrie Lane Suite 100 Lakeland Tennessee 38002 9228 The Warranty Matters Newsletter is published 12 times annually Publisher Warranty Matters Editor David Henson Editorial Director Robin Henson Subscription Rates U S Only 159 95 1 year 12 Issues 289 95 2 year 24 Issues This publication is written to provide accurate and authoritative information about its subject matter and is not intended to render legal advice If legal advice is needed you should seek the servic2. New Year Dave amp Robin
3. M E i General Motors Edition Finally the Launch is Here Global Warranty Management will finally launch in the U S with Saturn dealer ships on Monday December 3 after a more than 2 month delay from the original scheduled target date of September 24 We have also learned the U S launch for GM proper dealerships Chevy Buick Pontiac Cadillac GMC HUMMER has been pushed back again from September 2008 to January 2009 although some dealerships will be selected to pilot the pro gram beginning in the first quarter of 2008 The launch delay is apparently tied to compatibility issues with the various Dealer ship Service Providers Reynolds amp Reynolds ADP etc and pending lawsuits between GM and Reynolds Given the DSP delay and the fact that all Saturn stores use ADP computers as their Dealer Management System however Saturn dealers will actually have to piecemeal some of the process initially GM released the Global Warranty Management User Manual to Saturn dealerships on November 13 in conjunction with the startup of web based training for GWM The manual itself it a mere 129 pages long but the accompanying modules which detail specific functions within the manual add up to 589 pages a consider able read Training is required for all Fixed Operation Managers Service Managers Warranty Administrators Service Advisors and Parts Personnel After reviewing the major ity of training m
4. an and advisor social security num bers during claim input is going away altogether and instead they will be assigned a GM identification num ber or GMIN If you think about it though GM has been preparing dealers for these changes for several years now by re quiring some of this same information to be entered either in an abbreviated Failure Code area or in the Comment section This is certain to help with the transition Ironically the term Differential Points is mentioned 5 times in the new user manual in particular drilling down to Differential Points per Vehicle Serviced or DPVS To our knowledge this is the first ttme GM has uttered the phrase in a dealer level communication Even though it is used in typical GM fashion there 1s little information about how the process actually works Al though we d hoped Differential Points as an audit selec GMPP amp ESC Shipping Charges During a recent clinic an attendee brought up the issue of shipping charges associated with Electronic Service Center components i e radios CD players clusters etc in con junction with a GMPP SSP or other non warranty claims To be honest no one had ever brought this matter to our attention and we were unaware of the situation According to several attendees though some ESCs charge shipping while others do not This is not entirely correct though The problem is that GMPP has a policy of not paying ship pi
5. aterial we must agree this training is imperative for every em ployee in these positions Some positions will require the completion of one or two modules while others will require completion of all 13 modules GM estimates 4 hours to complete all 13 module training sessions As readers know we ve been writing about GWM since 2005 Many of our prior predictions have been confirmed by the GWM Manual such as requirement to list all parts real time processing more data input areas new terminology etc but we ve now learned some new information that deserves mention Labor operations that required an OBDII code as part of the diagnostics will have fields for required input of that information Major assembly replacement claims engines and transmissions will require the input of serial numbers from the new component you might as well get your techs in the habit of doing this right now Part warranty claims will require input of the previous RO number to be called a Job Card Number date and mileage of the original installation One of the bigger changes will involve new Authorization Codes available to deal ers based on their empowerment level While Saturn dealers have only used 2 au thorization codes over the years and other GM dealers have had 5 the User Manual provides a possibility of 19 different authorization codes although a Saturn docu ment released on 11 21 only lists 7 dealer level authorization codes For each e
6. ddressing the replacement of tires that failed due to another warranted component it is riddled with incorrect information regarding claim authorization and submission The bulletin says in two separate places that once the tire Edition PAGE 3 parts and only the associated parts are scrapped Most systems will allow you to select how many copies of the invoice should be printed Sometimes we actually see copies being thrown away Instead one copy should be con sidered the scrapping copy It should be placed in a folder with a scrapping date 15 days after the claim is acknowl edged as paid and given to the parts department periodically throughout the month as best suits your their schedule If there are multiple jobs on the repair order we suggest holding the scrap copy until all jobs are paid or reconciled This will avoid the need to make redundant copies of the same invoice For clarification we contacted GMPP s claim office and were informed that a Smart Care contract does indeed cover up to 4 oil and filter changes a year and up to 2 tire rotations a year It is in no way tied to the GMOLS For any of you who may have been told differently by your GMPP rep just let us know and we will see to it that any misunderstanding is addressed promptly and without fear of retribution is scanned by UPS dealers are authorized to submit the claim This contradicts the P amp P which states dealers must wait from
7. es of a qualified attorney 2007 Warranty Matters All rights reserved No portion of this newsletter may be reproduced mechanically electronically or by any other means without the expressed written consent of Warranty Matters Warranty Matters offers reasonably priced in house warranty training audit avoidance compliance reviews mail in mini audits audit appeals and warranty administration workshops Contact us today for a no obligation quote Contact us Office 901 377 6975 Cellular 901 483 9532 Fax 901 386 4000 Web www warrantymatters com Email david warrantymatters com The Money Game Quite often we re asked to explain the Adjusted Cost of Labor Sales commonly referred to as Unapplied Labor line on the financial statement page 6 line 30 Oddly enough we find that many comptrollers don t even know what this means or how the numbers if any at all get there Sometimes they will simply remove the money from one of the labor sales accounts more often cus tomer pay and reduce the gross profit margin on that single account thereby skew ing the GP margins and customer pay or other effective labor rates First unapplied labor is a measurement of money paid to a technician but not billed to a repair order It will usually result in a negative labor adjustment on the financial statement such as 1 393 including parentheses and is deducted directly from the total labor gross prof
8. it for service and or body shop sales The most common causes of unapplied labor are 1 Paying guarantees to technicians In other words if a technician is making 20 per flat rate hour and guaranteed 40 hours a week but only flags bills 35 hours this would result in 100 5 hours X tech s pay rate in unapplied labor 2 Clock hour technicians also have a cost and the same rule as above is applied 3 Improper costing from either keypunch errors or passing out raises without a corresponding adjustment in accounting 4 Paying bonuses for hours flagged benchmarks As an example a retroactive bonus of 1 00 for every hour flagged after 40 would result in unapplied labor of 145 for a 20 per hour tech who flagged 45 hours 945 800 145 After gaining a grasp of unapplied labor the next question is usually What s the benchmark for unapplied labor While in a perfect world the answer would cer tainly be zero we don t work in a perfect world Given the various dealership ac counting methodology we ve seen the answer would be It depends It depends on your market union shops high cost areas hourly shop paying guaran tees etc and perhaps even how creative your accountant may be I can hardly for get discussing why CP gross profit margins were low with a comptroller who simply asked Well what would you like them to be suggesting he would simply make adjustments to reach a goal that wo
9. mpowerment category there is yet another level of empowerment rep resented by a number is the lowest level and 9 is the highest In other words a dealer with a level 6 for Other Labor Hours might be able to claim up to 2 0 hours OLH while a level 1 might not be able to self approve any straight time now called Other Labour Time and that is not a misspelling Continued on page 2 arrani No ters VOLUME 6 ISSUE 12 DECEMBER 2007 IN THIS ISSUE Finally the Launch is 1 2 Here GMPP amp ESC 2 Shipping Charges Scrapping Parts the 3 Right Way Smart Care 3 Clarifications The Stupid Tire 3 Bulletin The Money Game 4 The Back Page 4 e Although ignored in dealer communications GM and Reynolds amp Reynolds are suing each other over software upgrades to accommodate GWM e Lawsuits could delay GWM launch to GM proper dealers even further e Saturn dealers will be forced to piecemeal the process for now e Some ADP data fields required for GWM will not be available initially PAGE 2 Continued from page 1 The entire Complaint Code Failure Code now called Cause Codes matrix has been revamped into a 4 digit format although it seems surprisingly short on descrip tion For example there is a Complaint Code for 4WD System Warning Light 0606 but the only other warning light code 0607 is just that Other Warning Light Indicated Problem The use of technici
10. ng freight charges moreover this policy relates to over night part expediting and invoices that reflected line item charges for shipping have been reduced by GMPP reps in some cases First shipping charges for ESC components will generally run between 16 and 18 per component It stands to rea son that the ESC is not going to absorb those charges and will pass them along to the dealership What we learned through a few phone calls and emails however might come as a surprise In fact all non warranty ESC component invoices include a shipping charge The difference is that about 50 of ESCs show VOLUME 6 ISSUE 12 tion factor would fall by the wayside it appears they are here to stay The calculation of warranty expense overall will be re flected based on expense differences for similar repairs to the same platform called Vehicle Warranty Groups instead of a franchise vs franchise comparisons as we have now As an example brake repairs to a Pontiac G6 will be compared to other dealers brake repairs on the G6 Malibu and Aura because they will be considered in the same Vehicle Warranty Group This should please dealers and compensate for the some times invalid comparisons when a dealer s expense was simply a bi product related to a high volume of sales on a particular model Although we ve found some punctuation and spelling errors in the new manual they have been minor We did note a familiar if not
11. painful discrepancy in the time limit for returning parts to the Warranty Parts Center similar to the one we addressed this past September As we all know by now the time limit to return parts requested by the WPC is 21 days changed from 28 days via bulletin SOG20060007 Unfortunately the first version of the GWM User Manual incorrectly lists the time limit as being 28 days This however we re being told will be corrected immediately this as a line item charge while the other 50 simply add it to the price of the component So in essence it is possible that GMPP may have paid shipping charges for one dealership since it was built in to the price of the component and not paid them for another if it was billed as a line item charge To worsen matters those dealers who received invoices with the shipping charge built in were most likely marking up the entire cost by 25 This means GMPP was paying 4 00 4 50 more the 25 mark up on built in shipping charges than they would have intended We have addressed this matter with GMPP and are lobby ing for an acceptable solution which in our opinion would be that GMPP should pay the component cost plus a 25 mark up and also pay the shipping charge at net cost after all this is an unavoidable expense associated with the pur chase of these components As it stands now GMPP is in the process of confirming our findings and establishing a uniform policy for thei
12. r field staff and dealers You should expect a dealer level commu nication from GMPP on this issue shortly Warranty Matters General Motors Scrapping Parts The Right Way Based on our field experience some parts departments use the GM credit memo to scrap parts This might work if the parts person is familiar with each labor operation and all parts required but that s highly unlikely One of the shortcomings of the GM credit memo is its failure to list all parts associated with a particular labor operation because they didn t all have to be listed to get paid This will be corrected with the GWM system but hey that s more than a year away for most of us The most efficient means of parts scrapping we ve seen is to provide a physical copy of the warranty invoice to the parts department This will insure all the associated Smart Care Clarifications We ve become aware that some dealers and even GMPP reps may be confused about the frequency of oil changes allowed with the GMPP Smart Care Program In some instances there has been a misconception that Smart Care will only pay for oil changes in coordination with the GM Oil Life System GMOLS Meaning the policy will only pay if the customer s Change Oil light has come on The Stupid Tire Bulletin Subscribers and clinic attendees alike know we are not fans of GM Tire Bulletin 00 03 10 003 that underwent its 13 revision in late October Besides not a
13. uld appease the dealer The Back Page a As 2007 draws to a close I wanted to take time to thank those of you who have con tinued to share information and remain loyal readers as well as those of you who have attended our clinics and seminars In our business more than any other the sharing of information is essential and di rectly tied to how well we can perform our jobs We ve had a great time with the GM clin ics this year Not only is it a superb source of information and newsletter articles for us but it s always fun to listen to the hu morous stories that we can all relate to Throughout the past 13 years we ve had the good fortune to work with some of the industry s best managers and warranty administrators and this year has been no different Still though I must admire those who are just beginning their careers in this business and are anxious to learn everything they can as quickly as they can With any luck they will continue to learn for many years to come just like the veterans before them ve already heard some long time war ranty administrators talking about retiring with the coming of Global Warranty Man agement I remember hearing the same thing from technicians when fuel injection was first introduced Two things that have remained constant in this business change is inevitable and it s a tough job even when everything is going right We wish you all a Merry Christmas and Happy
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