May/June  2001

NAGS Notes
hot topics


The World is Flat
(and so is Labor)

by Catherine Howard

 

The world is flat, as any fool can see. Just look out over the ocean. You can see the edge of it clearly. And the obviously insane notion that the world is round can’t possibly be true. If it were, how on earth could things stay on the earth? 

Oops, sorry … wrong millennium. Okay, so Galileo and Newton have come and gone, and we all know the world isn’t held up by Atlas, that it is round and gravity does its job day-in and day-out.

But what about labor? Is it round or flat? And what does flat mean when talking about labor anyway? It seems there is flat labor and then there is flat-rate labor, but no one has ever seen any round labor. So we have firmly established that labor is flat. But what’s the difference between flat and flat-rate? Well, it’s all relative.

By the Book
In the automobile repair industry, most customers want to know what it will cost to fix their car before the job is started. In order for shops to provide reasonable estimates, they use flat-rate manuals to quote a price to the customer. The quote is derived from taking the number of labor hours reported in the manual for the particular operation on the specific car and multiplying them by the hourly rate for the shop, plus the price of the parts for the repair. 

If something goes wrong and it takes the mechanic six hours to do a job that the manual listed as a four-hour job, the customer would pay for four hours and the shop would lose. But if the mechanic is very proficient at his work and is able to do it in two hours, the customer would pay for four hours and the shop would benefit from the skill, knowledge and efficiency of its worker. That hardly seems fair. Or does it?

“Average” Times
Well, it sure seems rather obvious that the shop should just charge for the hours that it actually takes to do the work. Then, if it takes the mechanic or technician six hours, the shop doesn’t lose. Try explaining that to a customer. Now the customer is expected to pay more because a novice needs to spend six hours doing a job that could have been done in three hours by a seasoned professional. And the highly-skilled professional technician who has invested time and money in training, tools, preparation and knowledge is penalized for his efficiency because he would only be able to bill for half the time it takes someone less skilled.

Flat-rate doesn’t mean that every job for every car is the same flat price. Now that is flat labor, like what goes on in glass shops. How that one got started is a mystery. Neither all glass nor all vehicles are the same. Charging the same labor amount for every job regardless of size, complexity, position and situation is sort of like trying to walk across a river just because it has an average depth of 4-feet.

Researching Repairs
So in theory, flat-rate in glass shops should work the same way as it does in other automotive repair facilities. That’s why NAGS® publishes its labor times, which are based on Mitchell® labor times for collision repair facilities. Mitchell International works aggressively at conducting in-depth research in the development of all published labor allowances with a dedicated and extremely knowledgeable staff of labor editors to ensure that all times are accurate, defensible and authentic. Glass removal and replacement are included in this process.

The times reflect the needs of an average, trained technician that uses factory-recommended procedures and tools. The Mitchell Labor Times include allowances for vehicle preparation, normal clean-up associated with the operation, verification of the completed operation, the technician’s personal needs, preventative measures and any other service that would normally accompany an individual operation.

Reviewing of the work order, positioning of the vehicle, organizing tools, performing the operation, cleaning up urethane and putting tools away are other factors included in the labor time.

In some cases, the Mitchell time on a tempered part is stated with the door panel already removed. In these cases, we have added the removal and installation time of the door panel back into the glass time for NAGS. And since broken glass clean-up is not included in the Mitchell time, we apply a “broken glass clean-up” factor that is formula-based and related to the size of the glass. Of course, there are other service operations within auto glass replacement that are not (and cannot be) included in the NAGS times such as airbag activation/de-activation, decal application/removal, hazardous waste removal, mobile service, rust work/removal, window tinting, VIN etching, vinyl peelback, etc. In order to address this need for the auto glass replacement industry, NAGS has created service part numbers to be used for services not factored into the NAGS labor times. There are no values associated with these numbers; rather, the value of these services is to be negotiated between trading partners.

Now that we have gone ‘round and ‘round about flat and flat-rate labor, why would anyone want to charge flat labor rather than flat-rate? I know … it’s a rhetorical question. But it seems appropriate to draw a conclusion here. 

So here goes: I have seen the truth, and it doesn’t make sense. 

  wpe3.jpg (1633 bytes) Catherine Howard is vice president/general manager of National Auto Glass Specifications in San Diego. NAGS® and Mitchell® are registered trademarks owned by or under exclusive license to Mitchell International Inc.

AGRR

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