AKRON-As if there's not enough competition already for consumers' vehicle repair dollars, enter another octopus threatening to spread its tentacles through towns and cities across the land. Here's a hint: It thinks it ``has a better idea.''
Yes, the auto manufacturing company that Henry Ford built wants a slice of that auto service pie, and may eventually be opening a stand-alone repair shop near you.
The pilot program, christened ``Ford Auto Care,'' currently has satellite service centers in four U.S. cities-Naugatuck, Conn., San Antonio, Texas, Jacksonville, Fla., and Tucson, Ariz. Each is operated by Ford or Lincoln-Mercury (L-M) dealers, independent of their dealerships.
Early on, Ford Motor Co. envisioned a network of at least 500 shops nationwide by 1998-all targeted at grabbing some of the service work now done by independent repair shops, as well as boosting customer access to Ford facilities.
But Todd Zucker, Ford Auto Care project manager in Detroit, said those projections have now been scaled back to the point where the program continues to be rolled out to selected dealers ``based on market and dealer interest.'' He would not say how many applications the automaker is considering, nor how many Auto Care shops the company would open this or next year.
Ford initially provided up to half the capital for the pilot centers, but Mr. Zucker said Auto Care shops now are fully owned and financed by participating dealers.
The test began in 1992 after Ford Customer Service Division research showed that 70 percent of Ford and L-M vehicle owners do not return to car dealerships for service work after their warranties expire. Auto Care was designed to help car dealers compete for out-of-warranty service business-which Ford said adds up to $150 billion a year on all makes.
Last year, in an interview with Automotive News, the project's now-retired manager, Tom Kubeshesky, said the automaker is ``not interested in taking business from other Ford and Lincoln-Mercury dealers-we want to go after the independents.''
And Mr. Zucker said early results appear to support Ford's objectives:
Approximately 65 percent of Auto Care customers formerly went to independents.
70 to 80 percent of the work performed has been on 1989 or older vehicles with more than 60,000 miles.
Auto Care facilities are only offered to existing Ford or L-M dealers, and most sites are centrally located between participating dealerships.
Aiding the perception that these are ``factory-authorized'' repair shops, the only signage allowed on the building's exterior is the familiar Ford oval and Auto Care identification. Dealers may put their name inside, and on repair orders. However, no new-car dealership brochures-or even indirect car sales-are permitted at the locations.
Had he known then what he does now, longtime Ford dealer Dick Shaker probably would have built a bigger building.
``Things are going very well'' at his three-year-old Ford Auto Care facility in Naugatuck. ``I'm very pleased with it,'' the owner of three new-car dealerships told TIRE BUSINESS. ``More importantly, we're making money.''
The Auto Care center co-owned and managed by his son, Steve, has six bays, though one houses an automatic car wash. Regardless of the work done on a customer's vehicle, each car gets a free wash.
``In retrospect, I wish we had a couple more bays, so we can do more work than what we're doing,'' Dick Shaker said.
His center is averaging $90,000 monthly in parts and service sales in the mostly middle-class community about 20 miles from Bridgeport and New Haven.
Unlike practically all standard auto service shops, the Auto Care concept allows customers to talk with the technician who works on their car, and features a lounge area with ceiling-to-floor glass where they can watch their car being worked on.
Mr. Shaker said that while customers who patronize a car dealership's service shop usually leave their vehicles, most Auto Care customers wait for their cars. That can translate into increased sales.
``We like the idea of them being able to be with their car because, frankly and candidly, our success rate in selling additional needed service work is greater,'' compared with a dealership having to track down a customer for repair authorization.
There are also other differences from a new-car dealership:
Auto Care offers extended hours-Mr. Shaker's is open 7 a.m. to 8 p.m. Monday through Friday, and on Saturdays, 8 a.m. ``until the last customer leaves.''
Auto Care technicians are paid an hourly rate, while most dealerships use the flat-rate pay system.
No appointments are required.
While Auto Care provides services similar to a car dealership, most jobs are limited to 3-4 hours or less of labor, and no major engine or transmission work is done, though Ford and L-M warranty work is performed. More-complicated jobs are referred to the new-car service shop. Auto Care also offers the less-expensive repair option of using Ford remanufactured parts.
Some 85-percent of the work at Mr. Shaker's Auto Care is customer-paid, with the remainder warranty work.
Consequently, he said his car dealership's shop ``has developed a lot of respect for Auto Care because, during the course of the year, Auto Care has been responsible for X-amount of dollars of parts and labor sales that the new-car shop wouldn't have seen.''
Mr. Shaker's Auto Care is 11 miles from his L-M dealership in Watertown, Conn., and 14 miles from his Family Ford in Waterbury, Conn., where he also operates Shaker's Jeep-Eagle.
Due to the popularity of Auto Care's glassed-in viewing area, he said he has since installed a similar lounge in his Ford dealership's service shop.
Being thrust into the limelight, so to speak, has required some extra schooling for Mr. Shaker's eight Auto Care technicians. Each had to participate in 12 hours of interpersonal skills training to help them deal with customers.
Every tech has business cards-another Auto Care feature-which are attached to repair bills. In some cases, customers returning for more work have asked for a specific technician, Mr. Shaker said, ``almost like the olden days, when you had a one-on-one relationship with a mechanic.''
Mr. Shaker said a lot of Ford and L-M dealers nationwide are leery of Auto Care, concerned about how it will affect their businesses. Some have griped to Ford: ``If you're going to invest in this stand-alone, why don't you instead invest in our dealerships' service departments.''
But ``they're missing the boat,'' he said. ``It's perception, perception, perception.*.*.*.*We charge the same prices at Auto Care as at the dealership.
``.*.*.*Customers just assume they're paying a little less money.*.*.*but it's the furthest from the truth.''
And participating dealers stand to benefit from referral work, not to mention share in Auto Care profits, he added.
A recent survey Mr. Shaker did indicated 60-percent of the cars repaired at his Auto Care were 1986-90 models. The reverse was the case at his new-car dealerships,which predominantly handle late-model vehicles.
``It's amazing the number of people with older cars who come to Auto Care and don't hesitate at all on spending money,'' he said.
And he has no doubts he's pulling business away from more established local shops run by Goodyear, Firestone, Midas Muffler, Sears, Kmart, and a slew of the fast-lube operations.
More than 95 percent of his customers said they would have patronized a chain store, gas station or independent repair shop, had Auto Care not existed.
The venture also has provided an unanticipated revenue source for Mr. Shaker: he sells lots of Ford apparel-including ball caps, jackets and Ford racing sunglasses-at the Auto Care outlet, especially during the Christmas season.
Ford is so impressed with the Shakers' Auto Care, Mr. Shaker said it contracted with his son to train all future Auto Care managers.
So before Mike Shad Ford opened a new Auto Care last February in Jacksonville, Fla., that dealership sent someone to Naugatuck for training.
Dick Shaker said he enjoys visiting his Auto Care site because ``invariably, customers will single me out to praise Steve, and say how great the people and service are there. We can't necessarily say that at our other dealerships.''
Although the Auto Care in San Antonio isn't losing money, unlike Mr. Shaker's operation, it seems to be struggling.
Opened in March 1994, the site is owned by five Ford and two L-M dealers who wanted a presence in the city's downtown area. They got that, but not booming business, according to Bill Jordan, who owns Jordan Ford Inc., and is CEO of the Auto Care operation.
``I think the Auto Care concept is a good idea,'' he said. ``Had we put it in a high-traffic area it would have been a lot better-that's the only mistake we made.''
The car dealers pooled financing and extensively remodeled a long-closed downtown San Antonio repair shop eight or more miles from the nearest new-car dealership. It has 18 bays and six technicians.
And now, they wait.
``It's been a little tough to generate business down there because of the location,'' Mr. Jordan admitted. ``We thought it would be convenient for people who worked downtown, but I guess people are used to getting their cars worked on close to their homes.''
The site is selling about $82,000 in service and parts monthly-did about $89,000 in August-and averages 15 to 20 cars daily, most of them less than five years-old.
At this point, it has not lived up to the dealers' or Ford's expectations, Mr. Jordan said, though ``I have had some customers thank me for opening it, saying it was more convenient. . . .'' (There are no longer any Ford or L-M dealerships downtown, most having relocated to the suburbs.)
``There are days when we get some cars in there, and get pretty crowded,'' he continued. ``But the guys don't work as fast as flat-rate employees, so we've had some delays in getting the work out.''
While he believes he may be snatching some business away from independent shops, ``I don't know that we've hurt them that bad, because there really aren't any (repair) places downtown.''
Price-wise, Auto Care has attempted to remain competitive with independents and other San Antonio competition such as Pep Boys. In one instance, a brake shop competitor complained to Mr. Jordan that he wasn't charging enough for brake jobs.
His reply: ``I'd rather do a bunch of $49.95 brake jobs than one at $160.95.''
Ford, which helps subsidize Auto Care direct-mail ads and provides some co-op advertising, told the dealers they'd ``hold our hand for 18 months,'' Mr. Jordan said, ``then it was ours.
``But then, it's been up to us the whole time, anyway.
``We're making a profit-don't get me wrong-just not getting rich.''
Still, he said as long as he can offer a convenience to customers-and keep paying the bills-``we'll continue it.''