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4 Unseen Costs to OEM Certifications

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Find where your shop might be losing money in OEM certifications in order to turn a profit.

Time and money. At the end of the day, what is work besides time spent and money made?

A typical body shop will schedule vehicles for a week and assign jobs to technicians, maybe taking into account if a technician calls in sick one day or has available vacation time.

Yet, what is the cost of sending those same technicians, the ones making the money, to training to get OEM certified?

As noted by Glen Sunder, owner of Peters Body Shop in St. Cloud, Minn., the cost of OEM training is significant. The cost could be as low as buying a tool for $25,000 up to $200,000 after factoring in training and all the investments. Sunder’s shop currently has seven OEM certifications, and generates $6 million in revenue each year.

Bill Eveland, owner of Eveland Bros. Collision Repair Inc. in Shawnee Mission, Kan., says his certifications have cost his shop as much as $10,000 just for yearly annual renewal fees.

Yet, Eveland makes north of $8 million in annual revenue and his shop has four OEM certifications.

Despite unseen costs associated with gaining OEM certifications, Sunder and Eveland have thriving shops that have been in business since the 1990s or earlier.

Only 50 percent of shops surveyed in the 2018 FenderBender Industry Survey said they had earned I-CAR Gold Class recognition. Fifty-one percent of shops said they had zero OEM certifications for their shops.

With 50 percent of shops surveyed having earned I-CAR Gold Class recognition and approximately 35 percent reporting they were in the process of becoming certified, shops are investing a very small portion of the profits into training.

If shop owners are not careful in their investments in OEM certifications, they could spend hundreds of thousands of dollars that they never planned to invest and in other areas lose weeks of production from their top technicians.

Sunder and Eveland recently shared with FenderBender what they feel are the top “unseen costs” involved with OEM training.

 

Unseen Cost No. 1: Changing renewal fees

Sunder says his shop pays $6,000 in an annual renewal fee for Assured Performance Network. Eveland, meanwhile, has invested $4,000–$10,000 in annual renewal fees.

Usually OEM certification programs have a yearly fee for the shop to remain in the program. That fee is deducted before the owner even sends technicians out to training and spends on the additional costs for travel, lodging and time spent away from the shop.

Eveland says he’s had OEMs initially have policies in which the certification training needs to be updated every four years and then the OE will change it out-of-the-blue to every two years. That alone doubles his initial anticipated cost.

Not only is there a dollar amount to join OEM certification programs, Sunder says the verification process might seem to be short but can take up as much as two months time. During that stretch, someone comes out from the training program and assesses the shop to make sure the space, tools and equipment meet requirements for the shop to become certified.

Eveland says shop operators need to remember that these costs are worth it but there might not be an option to pay monthly. Instead, large costs will need to be paid up front.

 

Unseen Cost No. 2: Loss of production

“Losing production while technicians are gone is very significant to the business,” Eveland notes.

Depending on the skill-level of the employee and how long he or she is gone, he says sending a technician to training can cost the shop $15,000 for one week.

But, it’s a relatively easy process to pick the classes. Typically manufacturers send a list of class schedules and the time slots available to shops. Time slots might fill up quickly, because only 15–20 technicians attend a class at one time. The schedule for classes varies by OEM and doesn’t typically stick to the same pattern each calendar year.

Eveland recommends getting the schedule and picking dates early so you can pick the date that disrupts the shop’s schedule the least.

Sunder says his technicians might be gone for as long as a week or just a couple days. To send two of his technicians to a Chief measuring training class, it recently cost him $1,350. To send three technicians to I-CAR welding training, it cost him $3,190. And, he also notes that some of the programs require painters to be certified, too.

“It’s important to know what’s coming and we just track these monthly costs in our financials,” he says. “Now, I-CAR is even rolling out a new subscription payment option in which a shop can pay in full for a year or pay monthly.”

 

Unseen Cost No. 3: Time researching programs

Sunder recommends researching OEM training opportunities before going through any “full-blown requirements.”

For instance, Sunder is considering (as of April 2019) joining the General Motors certification program. Yet, he is still weighing the decision because his shop has four Pro Spot welders and the GM program requires an upgraded welder, the Pro Spot i4-S Inverter Resistance Welder, he says. That welder upgrade would cost $25,000 alone. In addition to the welder, the GM program requires the shop to use Mitchell cloud estimating software. Sunder’s shop uses CCC ONE estimating software.

“Become knowledgeable about the programs,” he says, “and [make sure] your shop has enough cars from the manufacturer in the market, before spending on the certification.”

Eveland advises operators to look into becoming I-CAR certified because I-CAR has partnered with some OEMs to do training and can streamline the process.

For shops looking for less expensive options for training, Sunder says I-CAR does offer some virtual training classes.

 

Unseen Cost No. 4: Time spent gaining certification

Getting certified on each program does not happen overnight.

Sunder’s shop has seven OEM certifications, including Honda, Chrysler, Hyundai, Nissan, Kia, Acura and Ford. Peters Body Shop gained its first certification in the Honda program five years ago.

Eveland’s shop has six OEM certifications including luxury brands like Mercedes-Benz, Jaguar, Land Rover and Porsche. Eveland Bros. is also an authorized aluminum repair facility. Technicians have also attended factory training for Lexus, BMW and Mini.

Eveland and his team went offsite to go through their first OEM training.

Not only does the shop lose time repairing vehicles to get certified, Eveland says that owners need to factor in the time spent traveling to each training destination and during that time, there is no option for anyone in the industry to call a temp agency and hire a temporary technician.

 “And, you have to schedule around vacations,” Eveland says. “My staff have those for about two to three weeks of the year. Then, factor in the two weeks they’re gone each year for training, [and] that’s five weeks of total production loss time.”

Sunder says he will adjust scheduling vehicles to work around the time that his technicians are out of the shop. If two technicians are out for a two-day training, then he’ll schedule vehicles around those two days so that the customer doesn’t bring in the vehicle until the technicians are back or that the vehicle completion date is updated to a later time so the shop does not get in trouble missing a deadline.

To make up work missed, sometimes the technicians will simply have to work an extra hour or two the following days, Sunder says.

 

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