Changing The Industry Podcast

Swell AI Transcript: Episode 120 - Mike Christophersen.mp3
00:00 Lucas Underwood Mike, I don't know that you needed introduction. You want to tell everybody who you are there? Sure, sure. I didn't think I was that famous. You're pretty famous, bro. Hopefully I'm not infamous. That's this guy. So yeah, I'm Mike Christopherson. I've lived in Utah most of my life. Okay. Grew up in a family of Tex. My uncles were all Tex. And I decided to follow in the footsteps somewhat. My idea was to become an automotive engineer. So after high school, I took college courses at Weber State University. Man, what an awesome program, right? It was, even back then. I mean, we're talking 1985.

00:48 Mike Christopherson Yeah, it's changed a lot, but man, it isn't.

00:52 Lucas Underwood I mean, the YouTube channel. I haven't seen that yet. I'll have to check that out. But I know they have a lot of good instructors up there. So I attended there and then I fell in love. Right. And once that happened, I became one of those dropouts, college dropouts. So I got two years in. Right. And I ended up going in to be, decided to be a tech. Because it was an easier way to get in and make money. And I jumped from shop to shop, from opportunity to opportunity. Did some other things. I did some furniture sales. I worked for a couple of companies that make scan tools. And went out and sold scan tools. And when I did that, I became absolutely fascinated with programming and lab scopes. So once I started doing that, the illness started. It just took off. So I am a tool junkie. And to support my habit, I do EEPROM work and programming and whatever I can to talk to my son, who's my business partner,

02:09 Mike Christopherson now into letting me buy more tools. Well, that's pretty cool. The son's in the business now. That's a neat concept for sure. Now, before we started recording, you brought up something. We had a panel last night. And you said, hey, your initial comment, and so our listeners are used to us being brash. So you can be as brash as you want. But your initial comment was, I'm usually anti-owner. And then you went on to explain what that meant for you. And in that panel, we had some discussions about how techs are treated. And you were saying that you typically see this from the tech perspective. Tell me a little bit about what you thought

02:49 Lucas Underwood of that panel last night and what it said to you. Well, I think a lot of those owners would be a lot better owners to work for than the owners that I have worked with in the past. Right. I did have one owner that treated me like a partner at first. And then he hired a consultant. Yeah. And then I became an employee and my pay dropped, my opportunity dropped, and it was downhill from there. And that's kind of when I went into other things.

03:25 Mike Christopherson Yeah. Well, one of the things that I think has been eye-opening for David and I when we started the show is we talked to a lot of techs. We're friends with a lot of techs. But I don't think that we had as much of a perception of how bad it can be for some techs in the industry until we started the show. Because we had only been in our experiences. I wasn't a career tech, right? I started my shop. He was in parts. And so I don't think we had a true understanding or perspective that showed how bad it was because we were saying things and techs were coming to us and saying, man, you just don't know how it really is. You just haven't seen what we go through and what we experience. And I think that's true for all trades. I don't just think it's our trade. I think in a lot of cases, especially big corporations, will take advantage of people and maybe not even mean to.

04:16 David Roman But I think that maybe we were a little blind to that, right? I wasn't.

04:22 Mike Christopherson I don't know what you're talking about. Well, you never think you're blind to anything.

04:26 David Roman Well, there you go. See?

04:27 Mike Christopherson So I knew exactly what they were saying. So what's the solution then? What's your thought? Because you're talking about how you were treated in shops.

04:37 Lucas Underwood What were the things that really stood out to you? Well, I think when we talked in the roundtable last night, flat rate was brought up. And the fear, I believe, the fear of shop owners is if I pay my guy salary or a base plus bonus, that my guys are going to slow down. I think in some cases, it would be good if they did slow down, because then we wouldn't have so many bad diagnostics. I really loved diagnostics. And hanging parts, I could do it. I could make a lot of money at it. But where I really excelled was diagnostics. And in the situations I was in, that didn't pay. It hurt me. Right, right. 0.5 and 1 for pretty advanced stuff. Which rarely happened. You never can beat it. Right. If you do a brake job on a particular car 20, 30 times, you're pretty fast and efficient at it. You can do two, three, four times flat rate. You can't beat flat rate with diagnostics. That's true. So the solution I would have is if you have a diagnostic guy, pay him a salary. And a salary above and beyond anybody else in the shop. Right, because it's hard work. It's very taxing on the brain. You have to do a lot of study. For this EPROM stuff, I spend four hours a night on the internet studying. Wow. And it's more than just studying cars. It's studying chips. It's studying all kinds of things, collaboration with other techs. So it's a big deal.

06:24 David Roman The problem with the salary thing is that the financials still don't work. It works in a shop where you have maybe five techs. One's a diet guy. That diet guy is feeding the other four techs. And what's supplementing the diagnostic testing fee is the parts hanging. So you may charge $300 to figure out that this module's bad and module's 0.5 to install. You're not going to give it to that technician, the diet guy, because he's going to move on to some other testing. There's not going to be that much markup on the module. But what you're trying to do is hopefully you can sell brakes, suspension, gaskets, whatever else other than just that one repair. Because otherwise, you're having to charge to justify the salary for the diet tech. You still need some type of consistent return. You see what I'm saying? You still have to have that 70-30 split with that guy there. Now, if you have an 85-15 split with your other four guys and that guy is 50-50, then you can maybe make the math work. But without that 70-30 split, the money the math just will not work. The math does not work.

08:04 Mike Christopherson Well, so I think that the root of the problem, though, is that the consumer at the end of the day has not been trained or not been taught. That's entirely the problem. That we're valuable, right? And so I said last night, I think we're 20 or 30 years behind the other trades.

08:20 David Roman I think if they knew what we were doing, they would value it. If they knew what he was doing, if they knew, well, hey, you've got to hook these teeny tiny wires into this tiny little chip just so you can extract some information out of it, then jam it into this other thing. If they had any clue what you were doing, they would go, OK, well, how much is that? It's $1,000. OK, what are my alternatives? It's that or nothing because that module is no longer available or that module is on six-month back order and you're not getting to drive this car without that module replaced. So I've got to get a used one out of some brand new car and I've got to then make it so it'll work on your car. It's $1,000. And it's going to take whatever, three, four hours for the guy to do and use modules $100, whatever. The markup there will justify. If they knew, they don't know. They don't know. And the reason they don't know is because it's the Pareto principle, right? 80% of the shops are plugging in the little dongle thing, reading the scanner, it says, camshaft position sensor, circle malfunction. What do they do? Just throw a camshaft sensor in there. And it fixes it 60%, 70% of the time. Then out the door they go and they'll charge a one-hour DIAC fee, right? And they threw the part on there, 0.3, it's Ford, because of course. And then they mark up the part or whatever and the whole ticket's maybe $500. And the customer just thinks that that's the process 100% of the time. And that isn't the process 100% of the time. That's the process 30% of the time. And the rest of the time, we get screwed. The shop owners, the shops get screwed on the fees because the customer just does not understand what it is that we have to do to properly diagnose and the amount of training and yada yada and so on and so forth. So the math just cannot work if you have a DIAC guy just doing DIAC at a salary. It doesn't work. Now, I say that, but what I've done, oh my god, it's a salary. Oh my god, it's a salary. I don't necessarily pay them these ridiculous salaries that these Yehuis around here just throw these numbers out there like they're all meaningful. They're not. It's all relative. But they're well paid. But I have to rely on the E-Problem guy that I've got. He's been to your class. And he's very much like you. He got into it. And I want to figure out hexadecimal, this, that, and the other. And he got into it. And I'm just buying him a quip because he gets excited. I get excited. And I'm a tool junkie too. And I'm like, oh, I want that toy too. What's it do? It only does a 722.9 transmission module refresh. It doesn't do anything else. And it's $400. Go ahead and get it. Let's buy it. It's whatever. I can rely on him, the diagnostic vehicle. And he's still fairly new to the industry. So there's a little bit of like, hey, we need to streamline. 60%, 70%, I think the diagnostic testing that we do can be streamlined into being very efficient. It's those anomalies that end up eating our lunch. But we can mitigate that if we can streamline the 60%, 70%. And so we're still working through that. But the only way the economics work is that he still has to hang parts. I'm happy to pay him his salary. He's worth every penny. But you've got to go hang parts, dude. I get that you want a diagnosis car. Diagnosis car for me. But by the way, I need you to also do the brakes and steer and suspension and that gasket and the rear end differential service and the transmission service. Because that $4,000 ticket overall is going to pay my bills. And yeah, there was a $250, $300 diet charge on there. And we paid you. Again, it's not flat rate. But it's got 1.7 bill of hours on it for diet testing. That's the only one diet guy in the shop thing is a model. I mean, it might work in a bigger shop, though. Even if the economics might work in a bigger shop. So then you end up with a Bill Adams who looks at it and it's like, OK, well, I just have to scale. That's all I got to do. I just got to scale up. It's never going to work in a two-man shop, two-tech shop. Owner, two techs working, you're screwed there. Forget it. That's never going to happen. So he's got to go to, I'll just be techs and all we're going to do is hang parts. This is the only way he's going to make any money. The problem, though, is that Bill Adams then is, now I'm looking at it from an owner standpoint, I'm held hostage by that diet guy. Now you can say, well, just keep him happy. It's like, dude, OK, what is it, 50% of marriages end in divorce? I'm not making a lifelong commitment in front of God and family to be with this person for the rest of my life. This is an employee. You could say partner, this, that, and it like, you can say all that. But unless that guy came in and ponied up cash upon cash, unless that guy came in and was dumping hard-earned money that he had saved up to buy into the business, yeah, I mean, we're all, my employees are partners with me in that my success is their success, their success is my success, we are all in this together in that sense. But as far as like, if we go belly up, who's the government coming after for the liabilities? Like, it's me. That's my name on it. I signed for it. You just go get another job. So we can say partner all that stuff, but it just will not work in a small shop. And I'm held hostage by that one dyad guy in my shop. That one dyad guy is feeding my three or four other techs.

14:47 Mike Christopherson That guy leaves at any point for anything. All right, and has a medical emergency, has a?

14:54 David Roman Yeah, medical emergency, family, wife wants to move to some other part of the country, whatever, like all of a sudden. And they don't fall off of trees. It's not like, you know, I can just go hire another one. Like, no, dude, like the hardcore guys, like you're talking about the ones that were really into it. Those guys are one in a million, right? One in a million.

15:17 Lucas Underwood You're a one in a million. Yeah. So may I make some observations? Absolutely, 100%. That's what we're here for. So I understand from a shop owner's perspective, because I'm a business owner now too, and I have employees. I understand the perspective of dollars and cents, P&L and all that kind of stuff. I will say though, even though I discourage it, I still have shop owners call me that I do programming for to come and do diagnostics. And whatever I tell them, they pay me. How they make that work, financially, I don't know, but I'm not cheap. I charge more for my work, mobilely, than they charge for their flat rate. I'm sure they don't charge the customer, but I charge them. They absorb it in their advertising budget or whatever, but they're willing to pay me a premium rate to come in and solve their problem. And I'm not always 100%, nobody is. Right, yeah, absolutely. But most of the time I get my guy. So if they can afford to pay me triple or quadruple

16:32 David Roman what they're paying their tech, then there must be a little wiggle room somewhere. There's a little wiggle room

16:39 Lucas Underwood because they're not calling you six times a day. Right, I'm not there for a time.

16:45 Mike Christopherson Yeah, correct. You're solving the emergent problems that they can't solve.

16:52 David Roman I get this car out of my life fee.

16:55 Lucas Underwood So maybe that's what it is. The two-man shop, maybe that's the solution. A mobile guy. Now a lot of guys call that a crutch or whatever, but I mean, it's like calling the surgeon when you need to get an operation done.

17:10 David Roman A general practice is not gonna do that. I think the only reason why the mobile anything has emerged is because two things. The part of the bell curve of technicians just wanna hang parts. They just wanna smashy-barry it in and out, and that's it. That's all they wanna do. You have that. You have this massive need for skilled diagnosticians, massive need for skilled diagnosticians. And then the few skilled diagnosticians that are out there are getting screwed by their shops. The shop doesn't value them. The shop doesn't understand what it is that they have to do. They don't get it. They just see dollars and cents. And so what do they do? Like it's the Zach McLean, right? Zach could be, well, maybe not him at this point, but he's beyond that. But he could at some point have been in a good shop as the diagnostician or a diagnostician amongst several in that shop just banging out work all day long and be perfectly happy. But he just kept getting screwed, screwed, screwed. And he got to the point where he's like, I'm not gonna go work for somebody else

18:29 Mike Christopherson because this is just a pattern here I'm seeing. There's only so many times you can do it and not say, absolutely.

18:34 David Roman This is gonna keep happening. So many of them got screwed. They just saw, hey, that shop doesn't have a diagnostician. That one, that one, that one. I'm not gonna go work for just one of them. I'm gonna go work for all of them. And then they load up their van and then they go from shop to shop. But even then, I mean, how many times has Matt Scudridge talked about how hard it is to get them to pay him? Because the shop is a throw the part on there, didn't fix it, call Matt kind of shop, right? He shows up and he's like, that's 275 bucks for me to open the hood and even look at it. Free me even drive out the 275 bucks. I need that paid off. And they're like, oh no, this should be pretty simple. It should only take you an hour. They don't have a clue. That's the shop telling them that.

19:21 Mike Christopherson Yeah, yeah, absolutely. The shop. And here's the thing is I think that that's what we have to change, right? That's what has to change because A, it's the consumer perspective. It's the shop perspective in a lot of cases, right? And you heard Cecil say last night, like some shops need to close 100%. Absolutely. Some shops need to close. There's no doubt about that. But, you know, and I've talked to a lot of, I don't want to categorize and say it's older shop owners, but I've talked to a lot of shop owners who are very set in their ways. And they say, well, you know, here's the thing. I remember what they did to washing machines. The washing machine used to be $350, $400 to fix. And the new one was a thousand dollars. And now a new one's a thousand dollars and it's a thousand dollars to fix the one you've got. So they have this perspective that eventually we're going to hit this glass ceiling. And I can't really charge that to fix it. I think in a lot of ways, the chain stores though, and maybe it's not just chain stores, but there's some of these bigger shops who are mills, right? Let's think of them as mills and they're really just production. Get them in, get them out, get them in, get them out. And their mindset is I'm going to charge as little as I can. So I get more of them in. I'm going to pay as little as I can. So I make more money, right? I'm going to use the cheapest parts. And all I'm going to do is move those cars through the shop. And then two years ago happens, right? And that's where EEPROM had always been around, but that's when it, in my opinion, really started taking off because now all of a sudden-

20:53 David Roman This is no longer a niche thing. This is now absolutely necessary.

20:59 Mike Christopherson Right, and because we can't fix the car, right? And so these shops are like, well, what do we do now? Well, we can't fix the car. Well, there's no module? No. You can't get parts? No. So now the car is effectively a washing machine. They're going to have to get rid of it. Well, that's not an option anymore. So that takes the effectiveness of that smash and burn model and throws it in the trash. Because if we get to the point that you can't get a part for a car, and I- The smash and burn model is still wildly profitable. It is. It is on 90% of stuff. But I think the modern automobile is changing at such a rate.

21:40 Lucas Underwood How long is it going to take? I'm going to put you on the spot. How long is it going to take for the smash and burn to go down? Yes. I don't think it'll ever go down, because there will always be breaks and timing belts. A break on a hybrid?

21:55 David Roman Yeah. Every what? So what are you doing? You're taking off on Lubin? Cleaning in Lubin for what? What are you going to charge for that? 100 bucks, maybe?

22:05 Mike Christopherson You're not putting any parts on it, right? So what do you do? Fewer fluids. You're not doing oil changes, so you're not going to see the car three times a year. And I mean, the thing is, is that the technicians who have not continued to grow their ability, right? Like, would you want somebody at Jiffy Lube going into an HV system? I mean, no, dude. I'm telling you, if I was Jiffy Lube, that's the last thing I would want to be.

22:34 David Roman People don't know. What was that David What's-his-face from? I don't know how to pronounce his last name, so that's why I call him What's-his-face, but from St. Louis, Spirit One Automotive. He got a drop-off. And the lady had circled that her Nissan Leaf needed to be checked for emissions. Didn't she know? And you know what? There probably is an emissions test that needs to be ran in St. Louis. Let's check it for codes. So if all the readiness monitors are ran, and there's no codes, it passes. What are you trying to say about Missouri? Not Missouri. St. Louis. Oh, OK. Just St. Louis. They're so incompetent there, they probably do have a, you still need to check the car for emissions. It's an electric vehicle. There are no emissions. Oh, you still need to check it for a check engine. And I said, OK. But even if I do have a check engine, what do I have? Like a voltage problem in one of the modules? Like, what am I checking for here? Are you still on the losses? Competent. So maybe suspension. So brakes are going to be gone. Suspension. Gaskets are going to be mostly gone. Tires. But then that becomes an issue, because you've got only tire stores getting to do tires. I'm not going to compete against the discount tire. I can't. They've got it down to a science. Those tires are in and out 30 minutes on that car. 30 minutes.

24:11 Mike Christopherson They just, that's a. Do you feel like manufacturers have created a situation of planned obsolescence in an automobile? I mean, is that? There's no way.

24:22 David Roman I understand. They probably do. But then we just, like, the credit crisis is coming. And I think we hit an all time high just recently in credit card debt in this country. Car payments hit an all time high. The interest rates have skyrocketed on vehicles. And no longer can you do a 0% financing or 2.9% financing on a vehicle. So the vehicles have to get more expensive because of the amount of technology they're jamming into the car. So that SUV that was $35,000 is now $50,000. They cannot get the credit at a decent enough rate to purchase that vehicle. So they have to stay in their 10 or 12 or 15 model car. They have to fix it. They have to fix it. Well, even if it's $10,000 to fix that turd, it's a Jeep, Grand Cherokee, and it needs $12,000 in work because they all do, right? It's 50,000 for a new one. What are you going to go buy a used one that has the same problems? Guess what? That one's going to need $12,000 in work too. They all do.

25:27 Mike Christopherson So what are you going to do? You know, and I think even beyond that, right? So we look at what you do, right? And we talk about EEPROM, and we think, well, okay, you can't get this module, you can't get this part, and a very small subset of shops around the world are able to do what you do. Makes sense? Like very, very few. I mean, what? Less than 1% of all the shops in the country, maybe?

25:54 David Roman A quarter of a percent, possibly. We found another shop in St. Louis

25:58 Mike Christopherson I think that was doing, or in Kansas City. But I mean, I guess the question is, is a lot of these shops, they should be charging a premium for that service. That should be a very, very expensive service, right? Because if the module's $2,000, but you can't get the module, it stands to reason for me that now all of a sudden that repair's worth $3,000 or whatever it is, right? That's what the market dictates. Yet I've seen these shops charging basic door rate and basic dia grades to provide that service, which devalues the service across the board. I mean, there's some shops, like specialist, right? We sent a Mercedes module off the other day that had to be fixed. And so that was expensive to get it fixed, of course. But I'm saying like, the more people that learn it, if they have the opportunity to devalue it,

26:45 Lucas Underwood how do you, I mean, what are your thoughts on it? Well, I think the market kind of lets you know what you can charge. I mean, I hate to think of the idea, I got somebody over a barrel, so I'm gonna take advantage of it. Of course. But we, I mean, our pricing, let's say a module is $1,000, we might be 500 bucks. Okay. Especially if they provide the part. Right. Because that takes away our liability. They provide the part and it's got a bad driver, it's not our fault. Yeah. If we provide the part, it's gonna be more because we have to stand behind the part. Right. So there's that. I think about, we have EVs and hybrids and that kind of thing out there, but you talk to somebody that lives out in the middle of Idaho. Right. Or Montana or Wyoming, away from electric fueling station, away from the freeway, they're not gonna buy into electric. Yeah. They're gonna still want their diesel truck, they're gonna still want their gas motor, as long as they can buy fuel, that's what they're gonna do.

27:53 Mike Christopherson They're gonna fix those. Well, and on top of that, right, so we've seen the models that say 20, 35, 50% of production will be EV or hybrid, right? Well, I mean, if in 20, 35, 50% is production, even if it's 70%, that still means, I mean, right now we're working on 12 year old vehicles. I mean, that's the average. So it's not like we're gonna be working on these vehicles tomorrow. I mean, we work on some, right? But it's not like they're the majority of the fleet. The majority of the fleet's still gonna be ICE, right? And so, I mean, I wonder if we're getting to the point, you think of Cuba, you think of Russia, you think of the old USSR, and you think of the vehicles that are in their fleets. Boys, they're 50 and 60 and 70 years old in some cases, right? And they still maintain them, and they still keep up with them. I'm curious, I think EEPROM is going to be the way that we go. I know that Americans love their new cars, but I think it's really gonna be the wave of the future for shops. But I mean, you're not gonna take just any old average technician and put them on EEPROM work, right?

29:05 David Roman Like it is a different ballgame. We should be able to take any old technician, just like we do to do a brake job. Like you'll do EEPROM work, and he just bars in, what'd you call it, turn and burn? Yeah. Yeah. It's the turn and burn model. What's driving traffic is cheap oil changes and just like discount alignments, and that's what's driving the traffic. And he calls me and he's like, hey, are you looking for a GS? And I told him, I said, I don't know GSs. All my guys need to be proficient. They don't do all EEPROM work, because some of them aren't interested, but they should all be able to diagnose 60, 70% of the cars that come in, and they should be able to handle any repair. All my guys. And I started asking him a few questions, and he's like, yeah, I really got excited about working on cars, and I got into the industry, but they've got me doing oil changes and alignments all day, tires. And I cannot get off this rack. I've asked, and I'm like, they won't let you do some gaskets, timing belts, because that's what they do. He's like, no, man, they will not let me do it. And the reason is the model, their financial model doesn't allow them to, because the minute you start doing timing belts, you're not going to want to get paid 15 bucks an hour anymore, or 20 bucks an hour anymore. All of a sudden it's 25, 27, 30, and they can't afford that. They're doing $19 oil changes. What am I going to do to this kid? So I told them, I said, I signed up for Scander Dan or Premium, pay the $99 or whatever, start down this path. Because if you want to make any money and you want to be indispensable in this industry, this, hey, I can do tires, is not going to be the thing. We're going to have robots doing tires here soon. We don't need more tire changers. We need a guy that can diagnose why that tire machine's not working. Yep, yep, 100%. But that's who's coming into the industry, is he's thinking, I'm going to hang parts. It's like, no dude, this industry, hanging parts has to go away.

31:23 Mike Christopherson That's not this industry anymore. I almost wonder, you know, so let's think about who the high school instructors are. Let's think about who the college instructors are. Now, some of the college instructors are pretty elite, high level guys. But think about what it would be if somebody had your knowledge or if somebody was talking about EEPROM in high school. Because now all of a sudden, we're talking about a skillset that's beyond fixing a car. We're talking about a pretty advanced skillset. And if you could get those kids excited

31:56 David Roman about something like that. Yeah, why don't they have a board capacitor and resistor or diode desoldering and re-soldering on boards on automotive modules in high school?

32:11 Lucas Underwood They used to have electronics classes.

32:14 David Roman Yeah. But I'm saying like, smush them together. Yeah. Hey, I thought we were going to change oils. No, no, no, no. I'm going to show you how to change capacitors on these boards because they all blow up. Like what?

32:27 Mike Christopherson Yeah. Well, it's like Eric's class at our high school, right? You really dig into what he does. And the class has always been, like we've always had a good program, right? But when he came in and he started setting up the advisory board and we're all going in and we're meeting and he's bringing in the guidance counselor saying, look, I want you to hear what these people have to say because this is not the industry that you think it is. This is not what we were doing 20 years ago. You know, he was a Volvo master. And so the majority of his work was complex Volvo problems. And we know how complex Volvo problems can be, right? Oh, the whole wiring harness just disintegrated. Oops, you know, my bad. But see, I'm just talking about land rover. And so, you know, the thing is, is that all of a sudden that class is full. Why is the class full? Well, because they understand, the guidance counselors now understand that the technology that they're working on is not just something that's relegated to an automobile. It's not that I'm a grease monkey. It's that this, you know, I'll never forget watching a scanner downer video. And he said, if you can fix a car, you can fix your washing machine. You can fix your HVAC system. You can fix, because the same principles that work in this work in everything in your life, one way or another. The, you know, we've talked to Jim Kokonis about the deductive reasoning and the different types of reasoning. And how do we think? And how do we think through that? This is a skillset that if we can get them to teach that very young, if we can get them to teach that middle school and in high school, this is not just winning at automotive repair. This is winning at life, right? This is a situation where when these kids come out, if they have these skills, everything from fixing their own car to life problems, they're thinking about it completely different than they ever have before. We're giving them the skills that make them successful in life. And so is the education's failed us? I mean, you know, I've talked before about the, our education system that we have now is very much like a factory setting. It's a production line. And what's most important is your date of manufacture, right? And we just push them through this system and here's what you have to know and here's how it is. And everybody's the same. And so we all know the same thing. We all do the same thing. Maybe it's time that the education system has to be reformed. And maybe that's part of the problem that's leading to where we're at right now

34:49 Lucas Underwood with the automotive industry. Well, critical thinking is something that I think is lacking in our schools. I remember when I was in elementary school, they talked to us about base 16, which is hexadecimal. I didn't grasp it in third grade, but I use it now all the time and I have to try and understand it. And it's like a puzzle.

35:17 Mike Christopherson It's kind of fun actually. Yeah, it's very, very interesting. And the thing is, is your brain works that way. Mine does not, right? That's just not the way mine works. There was a guy, his name was Ken Robinson, and he passed away recently and he had all kinds of kooky and wacky ideas, but he's the one who really opened my eyes to our education system. And is our education system broken? Is that what we have going on right now? Is this a damaged educational system that's causing the root of where we're at? And I told a story last night on the panel. I was talking about a guy who I was in a restaurant and I overheard him talking about his career in HVAC and all of the things that he had been through. And I thought, well, damn, that sounds just like what we've been saying about automotive. And then I start paying attention. I get into some plumber groups and into some electrician groups and they're all saying the same thing. Is it that we've devalued the blue collar worker to the point that A, they can't earn a living and that B, they're not respected and they're the ones who built the country, right? Like at the end of the day, the guys paving the road, the guys building the bridge, the guys building the buildings, the guys wiring and plumbing the buildings are the ones who made the rest of this possible. And it might be great and well to be an attorney. It might be great and well to be a doctor. And those people are needed too. But they're not the ones who made the country what it is. They're not the, yeah, you think back about World War II, right? And of all the things that you could say about World War II, the most impressive part of it was the manufacturing machine that this country became, right? I mean, massive, massive manufacturing growth like that. I mean, it was like flipping a light switch and we were building 1,500 ships a week, right? That's insane. That is absolutely insane. And now we've built our country to where we depend on everybody else. I don't want to get political or anything like that. That's not what I'm saying. It's just that we've not put an emphasis on this ability. We've not put an emphasis on what it takes to be that blue collar worker and how they are really what builds the economic infrastructure of our country. But I don't know how to change it.

37:26 Lucas Underwood I don't know how we fix that. I think baby steps, I mean, how many people call AAA to change, men call AAA to change a tire. I taught my daughters how to change tires and they changed oil in their own cars too. So I think it's, you know, life skills. Yeah. Last night we were talking about budgeting and how some techs just, they can't handle it. They go out to that tool truck and see the shiny chrome. Every dime they had. Yeah, it's crazy. Yeah. I mean, I'm not ashamed to say that I had craftsman tools in this shop. Yeah, absolutely. I didn't have the biggest toolbox. I just had a reasonable toolbox. And what we did is, you know, sometimes it was really lean, but when it was fat, we put that money against our house. Yeah, dude. We get off our house early. Yes. I mean, that's the kind of skills we need to teach technicians, people coming up how to keep a checkbook. Amen, dude. They're not doing it.

38:32 Mike Christopherson It's not happening. And you know, that's the thing is, even when I was in school, it wasn't being taught, right? And I mean, I'm only 38, but I mean, like, that shows you we've had this decline. And is it that I didn't listen? Is it that they didn't teach it? Is it that we don't want to be offensive and tell somebody how to live their life? You know, I don't know, right? Something has shifted. Something has caused this. And you know, we always talk about the fact that the more money you spend, or the more money you make, the more money you'll spend, right? And we've seen that time and time and time again, that these guys are going out and they're spending a little bit of money and they say, hey, I gotta make more money. And they make a little bit more money and it just goes downhill. It just keeps trucking right along. End up in a situation financially to where they're unsustainable, right? And that's one of the things that I thought was really interesting about the shift, not even so much with EV, but to come back to what you do. Let's talk about EEPROM, right? Equipment-wise, yeah, there's some equipment you've got to buy. But compared to what it takes, by the time you're 30 years old and you're a master level technician, right? Let's say you're a master level. I know some people won't flip out about that, but by the time you get there, that's a chunk of tools. That's a chunk of money. $150,000, $200,000 is probably not that unreasonable to think they might have. How much would somebody have to have if they wanted to have the majority of tools they need? How much would they have to have

40:08 Lucas Underwood to go full blown into EEPROM? EEPROM by itself, probably 20,000, 30,000. But I can tell you, my company that I'm dealing with, with my son and we have another programmer, and then we have a guy that does coding for us, we spend about 50,000 a year on subscriptions and new tools. So, and that's for three of us. So it's expensive.

40:39 Mike Christopherson I mean, that's a person's wage in a lot of cases. Well, of course, but I mean, in the same respect though, think about the, when we talk about the business level, right, when we get to business level, right? We're talking about substantially more income than what that tech's making as a C level or B level technician. Sure, yeah. So I think EEPROM, we have to compare apples to apples because now we're talking about generating a lot more income than he would if he was a B technician. He might earn $50,000 a year as a B technician, wherever he's at, however it works out. But as an EEPROM guy, he could probably earn substantially more than that. Or let me ask you this, are you, so you teach this class on EEPROM, are you, and I know some of the guys that have been in the class, I know that shop owners have been in it. I know that technicians have been in it. I know that some electronic guys I know have been in it. I know that instructors have been in it. So these guys that are going out and starting this, right? They've never done any EEPROM at all and they're really building their knowledge or getting ready to go. They're getting everything set up. They're buying the tools. Are you talking to them about how to charge for this? Is there any structure? Have you talked to any business people that say, here's how to do this?

41:52 Lucas Underwood Are you helping them with that too? Not officially, but I have people reach out to me, how much should I charge for this? And it depends on the market. So I have a guy up in Idaho, his name's Maxwell. He's breaking in a new area. He's in Idaho Falls. And Idaho Falls is a very conservative, very farmer. People don't like to spend money. And so he asked me about an operation and I said, anytime I clone something, it's at least $300. And that was established by other people doing cloning over the years. They've kind of poisoned the market to create this expectation, $300 is what it is. But he charges that and they complain, but they pay it. What other options do they have? Yeah. I mean, I don't wanna say that we should take advantage of people, but I don't feel like

42:53 Mike Christopherson that's taken advantage at all. I don't think it is either, but now here's the thing is that that fear of taking advantage of people can also become a detriment. Like if we let it go too far, we become so worried that we're taking advantage of somebody that we don't charge what we need to be charging to be profitable. And at that point, you gotta step back and say, is this a sustainable business model? Because if I have to charge this to be profitable, because at the end of the day, we take all of our expenses and we take our cost of goods, which is labor, which is parts, whatever it is that we have, at the end of the day, you can make what? Healthy day, 9% on the market. Reasonably, you can make 3% on the market every year. I would stand to reason if I'm gonna take that kind of liability, I would want at least 15%, right? Because I'm taking way more liability than I am in the market for the most part. I mean, yeah, the market can be risky if you're silly about it, but I mean, owning a business is far riskier. Tax liability, general liability, if somebody gets hurt, something happens. We're putting it all on the line. We're personally putting our lives on the line for this business and we're giving up a ton to make the business work. So if we don't at least get a return on investment of 15%, if we can do that in the market and can get that eight or nine, it would be silly to take all of our life's hard work and invest it into a business and make 5%. You see what I'm saying? Sure. If I can go out and get a job and can earn $100,000 a year and I can dump that money into the market and make 3% off it, God, I'm out of money. Why? Okay, I'm selling the shop. But you know what I'm saying? So if we have to back the business away from that financial model and we say, this is what we've got to charge for it to make that money, yet I hear shop owner after shop owner say, I don't wanna take advantage of people. I don't want people to think I'm screwing somebody over. I don't wanna recommend things they don't need. Well, for God's sakes, don't recommend things they don't need, right? Fix the car. Sure. Right? If you're gonna recommend something, make sure they need it. Tell them how to maintain their car. Tell them how to keep it reliable. But charge what you want.

45:06 David Roman People that are saying that, though, aren't doing the EEPROM work. The people that say, I don't wanna take advantage of people. They're not doing EEPROM work. What are they doing? They're hanging brakes. That's what they're doing. And they're machining the rotors. That's what they're doing. Well, I can save the customer $100 if I machine the rotors. Why are you machining rotors? That's another discussion.

45:30 Lucas Underwood Well, you're supposed to charge for that.

45:31 David Roman Like, that's an hour, right? Yeah, but they don't tack the hour on top of the brake job. They should. They just, well, even if they do, they're charging $100 an hour. Charge 20 bucks a rotor. $200, yeah, 20 bucks a rotor, or $30 a rotor, or $50 a rotor. Some shops were taking the rotors off, taking them to the parts store, and letting the parts store machine them. Like, how long is that car sitting on the rack? What are you doing? Yeah.

46:02 Lucas Underwood Just buy new rotors. What does it cost to have a car on the rack? $300 an hour? Yeah. By the time you figure the profit on the parts? Yeah, absolutely. Opportunity costs?

46:12 Mike Christopherson Yeah, so you're just opportunity cost loans, anywhere from $200 to $400 an hour, just right there, right? And so you're talking about a chunk of change. And if it comes down to it, and if we're not willing to charge, and I guess what set me off on that tie rate is that you don't want to take advantage of people, but people are always going to complain about the price. Right? Sure. They don't go into Walmart and buy a 55-inch TV and say, I feel like this is a little steep. Could you, right? They might, but the point is, is that it doesn't matter. Right?

46:52 David Roman They're not getting anything. They feel like they have a sense of control, though, when they walk into Walmart and they choose that particular TV where they don't know anything about cars. So they walk into the shop and they're already apprehensive thinking, I'm going to get screwed over here because I don't know what they're saying. But they're telling me I need to spend $1,000 to get this car running. And they're telling me they have to replace this module, but they have to program it, but they're going to use a used module.

47:20 Mike Christopherson I don't know what they're even saying. Is it possible that our front counter staff

47:25 David Roman has not been trained? No, some people just don't want to understand. I had this lady come in. This lady comes in, she tells me the car is shaking. It's a Hyundai hybrid. The car shakes, it runs really rough. And the dealer told me I needed ignition coils and spark plugs. I said, okay, well, we'll check it out. We'll get a second opinion. She was like, I just don't want to spend the money with them because they're too expensive. So I go, fine, whatever. And I said, the first thing we do is inspect the vehicle. We need to get a baseline. We need to understand. So we don't do a lot of Hyundai ignition coils. They don't go bad. But I will tell you that almost every single one of these Hyundai's that come in the door don't have any oil on them. And if there's several years that if the car doesn't have any oil, the car doesn't run. It will go into limp mode, it will run terrible. It feels like it's firing, it probably is. But the car just does not run. I said, so we're going to check that out. Oh, I don't think that's it. It needs ignition coils, I think. So we pull the car and we do a full inspection. Guess what? No oil in the car. No oil in the car. Car was empty. She's like, well, it did that before the oil change and it still did it after the oil change. That's what she had told me at the counter. So like, yeah, it's burning through the oil because it's a Hyundai. That's what they do. They burn oil. Nobody tells them. Nobody tells them. The Lou place isn't telling them that all the shops that she's been to isn't telling them. The dealership isn't telling them. I'm the guy that looks like the a-hole telling her, hey, your car by design burns oil. Check it more often. Whatever. Anyway, so we call her and we tell her. We don't call her. We send her the inspection and then the estimate. And she calls, freaking out. She's like, where's the ignition coils? Well, we don't think you need ignition coils. Well, the dealership told me. I don't understand what the dealership told you. I don't think we need ignition coils. No codes in the car. The car is out of oil. It needs an oil change and you need to check the oil more often. You need to shorten the oil change intervals too. We need to go to 5,000 or 3,500 miles or something like that. And she just starts arguing. The dealership told me I need ignition coils. Can you test the ignition coils? Sure. It's $181 in change to test your ignition coils. Well, what am I paying $181 for? To test your ignition coils. We're gonna do current ramp testing on the ignition coils. We're gonna check secondary on the ignition coils. We'll tell you if the ignition coils are good. But all the evidence in front of us says the ignition coils are fine. Yeah. She was pissed off. She said, I wanna talk to the guy I talked to this morning. This one was talking to her. So I talked to her. At this, I have no patience for stuff like this. This is why I have service advice. I don't have patience. I used to, I used to be like, oh, well, we can check it for free. Like I used to acquiesce. I don't acquiesce anymore. Like I'm in my office. I'm editing the podcast or doing YouTube videos or something like that. I don't wanna be bothered. And I don't wanna be bothered answering stupid questions. Ma'am, the reason they told you, I asked her, I said, ma'am, did you pay for anything when they told you you needed ignition coils? Well, what do you mean? Did you pay for diagnostic testing? They charge you $150, whatever, to test. No. Did you pay anything? Well, I was in for a recall and I told them my problem and they quoted me out coils and plugs. Nobody looked at this car? Well, they were back there with the recall. Yes, but they didn't charge you anything extra. No, they didn't do anything to the car. They guessed. The service advisor's like, hey. The service advisor just pulled some random comment out of their rear end and said, yeah, it sounds like ignition coils and spark plugs. Here's a quote. That's what the service advisor did. I said, ma'am, those technicians don't work for free. The recall didn't cost you anything because the manufacturer's paying for the recall. The manufacturer's paying for the technician. The technician's not going to do extra work for free. No technician does work for free. We know they do, but this is what I'm trying to make a point to her. So the fact that you didn't charge anything says they didn't do any testing. I am telling you, you do not need ignition coils based on all of the evidence. Why would they tell me that?

51:51 Mike Christopherson They pulled it out of their rear end. They pulled it out of their rear end. All the evidence, she hung up on me. They'd probably pop up and say, oh, and while we were in there, we noted it needs an oil change too, but they got their money for the ignition coils and the plugs, right? That's skeezy.

52:07 David Roman That's another level of skeezy. Maybe dealerships, you know, that's a different level of skeezy. She hung up on me. We have a lady that calls everybody that was in for service. She calls, her boyfriend ends up picking up the car. She didn't even want to come in. She was so upset. She didn't even want to come into the shop. Her boyfriend comes in, picks up the vehicle, leaves. The lady calls back, calls and says, how was your service? This, that, and the other. She says, I think they were sexist, because I'm a woman. They were telling me that I don't need ignition coils. I was like, I don't know what I'm talking about. You don't know what you're talking about. It's not your job to know what you're talking about. It's not even that. Gender has nothing to do with it. You're an idiot. That's all it is. You are stupid. And that can spread across age, gender, all the demographic information. You are a stupid person. Now, where you have a certain level of stupidity, that was my point.

53:09 Mike Christopherson It took 10 minutes to make that point.

53:11 David Roman I just needed to get that story out. She had this accent too. I think it was from California. That's what I thought. I don't know. Californians have an accent. Californians have an accent, right? It's supposed to be accent neutral, but okay. No, they are not accent neutral. The Californians have got a twang, a Californian twang. They come in, we were flooded with them in Kansas City. I'm gonna make all the Californians upset. Sea Land Rover guy, we were equal opportunity haters. Anyway, Californians are flooding Kansas City with their effervescent presence. We love having them there. Anyway, they're flooding Kansas City. And all of a sudden, all these people are coming in and they have these accents. And it's like, the person's from California. I can tell. Anyway, 100% she's from California. 100% she's from California. She's got an accent. But I mean, what's the point of all that? I mean, what are you? I'm just saying, Californians have an accent.

54:14 Mike Christopherson But I don't think so. I understand, but I mean, what's the-

54:17 Lucas Underwood Are you from California?

54:18 David Roman No, I'm from Utah. Oh, okay. I haven't heard of Utah.

54:22 Mike Christopherson You just, he sighed a sigh of relief. You just couldn't hear it? No, no, I just- You said, I'm from Utah.

54:29 David Roman I was setting myself with, well, okay, I probably offended this guy.

54:33 Lucas Underwood Let me ask real quick. So one of my instructors, Shannon, he's from the Los Angeles area. And everywhere we go, that's not California, he hangs his head and says, yeah, I'm from California. So we taught in Georgia, in Atlanta area. And he says, he's from California. And one of the guys was getting ready to unload on him. And I said, he reloads his own bullets. And then the whole conversation changed. Oh, well, if you reload, you're okay.

55:08 Mike Christopherson Right, right. Oh, that's awesome, dude. That's awesome. Well, so where do you think we're going?

55:12 Lucas Underwood Where's the next step? Well, I think fixing modules is an EEPROM work and that kind of thing. I think it's going to grow. Unfortunately, the United States of America is starting to feel like a third world country. I mean, they've been doing this in South America and Eastern block countries for years because they can't get parts. They don't have right to repair. They can't get programming software unless it's hacked through a VPM.

55:44 David Roman Not even third world countries. We're talking to dudes from Australia. Garage network guys. Holy cow. They're like, oh yeah, we have to go to those Eastern block, former Eastern block countries to get some of our information. Wow, we don't have right to repair like you guys have in the States. We don't have access to that information.

56:04 Lucas Underwood That's crazy. So we got to do what we got to do. So that's, I think we're running into more of that. And the other concern I have is have you had to buy a PCM used or remanned for like a 98 Jeep with a four liter? Yeah, it's been a while. If you can find one, they're eight or $900. Yeah. And it's been through the mill so many times.

56:32 Mike Christopherson You never know what codes are going to pop up. The ones with the little, no, it was the older ones that had the screws in the front of the case that would push into the board itself.

56:41 David Roman The support screws. It's probably still that one. It's the one with the weird like angle on the connector and those little solder points were the, right? And with a 90 degree on them, they would have hairline cracks. And so you'd randomly feel bump, it's not working. Well, why? Or the ASD relay would stop grounding. Like why? Well, there's a little crack on one of that connection.

57:02 Mike Christopherson Well, things are junk. Yeah, still are. Well, so didn't like one company buy a bunch of that stuff off? They found some in surplus or something. I heard a story about that, that they bought up a whole bunch of Chrysler modules. I mean, thousands and thousands of them. And they were the only person you could get any of those modules from and they were junk, but you could buy them and then you could fix them because they were remanned.

57:26 David Roman The problem isn't necessarily that they're 98 and you can't find them and they're $800 is that that car needs to probably go in the junkyard. Like it needs to go. It's the 18 body control module because the push start system doesn't work. And that 18 sitting in my lot for six months. I've got a modules on back order. And yes, we bought a bunch of random EEPROM. The problem was the MCU needed to be cloned and we just could not find enough information on this like little tiny micron chip, specific brand micron chip. We could not find enough information to be able to successfully clone it into a used module. I bought like three used module and like we're gonna figure this out. Oh man, we're still working on it.

58:15 Lucas Underwood Well, I mean, we ended up getting a new one.

58:17 David Roman Have you looked at IO terminal? He's got an IO, he's got like an orange.

58:24 Lucas Underwood So IO terminal does it through the network. Now 18 might be a problem because they went from- It might've been a 16. They went from global A to global B. But if it's a global A module- This is a civic. Oh, I'm sorry.

58:37 David Roman I thought you were saying a GM. No, no. Yeah, GM's we got that. Yeah. That's far easier. Yeah, yeah. This was maybe if a PCM had failed, we might've been able to get this into work. It was like a 16 civic. It was a body control module. And we needed to get one and they were on forever back order. Good luck. Card does not run. It'll start sometimes, then it won't turn off and then you're disconnecting the battery and then it may not start again for a week.

59:09 Mike Christopherson So it was so inconsistent. You know, here's the thing is we've got a Chrysler minivan that's a loner and we're seeing more and more of this, right? Like these vehicles are becoming so complex that they're not drivable, right? I've got vehicles that have radios that are causing massive parasitic draws. They die overnight. I've got the wheels that are, and that's something we've dealt with for a long time. But I mean, here's the thing is now it's not available. The parts not available. HVAC doesn't work in the car. Guess what? The car is not drivable anymore. I can live with a parasitic draw. Like some people will just say, oh, I'll just jump it off every morning or whatever. I don't have heat. It gets cold where we are. It's not where we are. The vehicle's not drivable. The Chrysler minivan, the windshield wipers run all the time. I don't have a speedometer. The vehicle's not drivable. You know what I'm saying? Like we're getting to the point that it's so dependent on the system. What was wrong with it? It's a cluster. It was the cluster? Yeah, the cluster's bad in it. Eric's messing with it.

01:00:05 David Roman We found a few things. Do you do a lot of cluster, like tear down, rebuilds, replacement of individual components on the cluster?

01:00:10 Lucas Underwood Not a whole lot. I've done some GMs that I've been able to reflow solder and that kind of thing on. But there's a lot of people doing clusters. Yeah. Once in a while I'll do them.

01:00:24 David Roman The problem is like they, I get weirded out sending it into like one of the cluster companies. You know what I'm saying? It's because they're, and it's because I understand their business model's built around, there's three pattern failures on that cluster. 09 to 11 Honda CRV. This is what fails. If you don't have that problem, but you know it's in the cluster, what do you do? I can't send it to one of those. And there's 700 of them that will all do the exact same thing, different prices or whatever. And then you'll have one random company who will say, oh, you know, I know that probably we fix it, but it's $800. Well, cluster's nine. And now you have to decide, well, do we just spend the $100 more and get a new cluster? $800. Now they're still available, but had they stopped making them available, the cluster now, yeah, the $800 was worth it. And I just, I get weirded out because it's great. I'm glad that you guys can fix the same three things on this module because the same three things fail on every single module. And so if it's one of those three things, I don't mind sending it in. But if we're into it, like if I'm into it that I'm looking at module repair or something like this is a weird problem. I don't get lucky that it's just, it's just one of these three things. I don't get that kind of lucky.

01:01:52 Lucas Underwood I got something weird going on. There's a guy I work with, Spartan. Have you ever worked with Spartan over in, I think he's in St. Louis. Oh really? Yeah. Nice. His name's Eric. Okay. And I think it's called Spartan. He does a lot of GM, BCMs and clusters and that kind of thing. Might want to look him up. He's a pretty smart guy.

01:02:15 David Roman But I'm thinking more in terms of not necessarily clusters, but I'm thinking more in terms of circuit board issues. So it's no longer, well, I'm going to clone this module. Now it's, it's the, I'm going to tear into this thing, look for what failed on the circuit board and reroute some solder or replace this capacitor that's failed or actual circuit board repair. Mario does it all the time. You see him, you know, hey, this takes it apart. So he's like, hey, this module is not available or it's $5,000, but it's just that capacitor melted. And I'm going to check it to make sure that the traces are good. I'm going to replace that capacitor

01:02:59 Lucas Underwood and I'm going to ship the car. Yeah. That's awesome when you can do that. I've, I've tried some, some different repairs, like a common one on the Chrysler is the, the alternator will short and take out the driver. Yeah. And I've tried to replace that driver. It has like three or four sections on the back. And if you flow the solder into another one, it shorts it. There's just nothing you can do. I mean, if I had the right equipment, maybe, but do I want to spend a hundred thousand dollars to do these? Yeah. Not unless I'm doing, you know, 50 a day. Yeah. Right. So, you know, I leave that to Cardone and some of the other guys. I know there's a lot of complaints about their product.

01:03:44 Mike Christopherson Well, I was getting ready to say, so they're going to flow it into the other port anyway, and you're going to send it back short. It's going to be the second difference.

01:03:51 Lucas Underwood But then there's like the Ford coil drivers. Yeah. If you can get it before it absolutely destroys the board, you call up or, or ring up David's son out at Wixie and tell them what you want. And he sends you everything you need from Taiwan and solder it up and you're good to go.