Fixed Ops Friday w/ Bob Keuhl, John Bishop, and Vince McIssac | Daily Dealer Live

Hey everybody, welcome back to another episode of The Daily Dealer Live.

I'm your host Sam Dark and thanks for choosing to be here this Friday the 27th

of February. And hey everybody, welcome to Fixed Ops Friday. If your service

department isn't carrying your dealership right now, you might be doing it wrong.

So say industry experts and today's guests. The vehicle fleet is older than

ever before. Front-end margins are tighter than they've been in years and

OEM pressures, well, they're not easing. And yet across America, service

departments are leaking profit every single day. ELR sometimes low, parts

gross can be inconsistent. Advisors discounting because it's easier than

selling value. And some techs need to be re-engaged. Video MPI is sometimes treated

like compliance instead of a revenue engine. And here's the truth. The service

shop, not sales, not the desk, not the dealer recap, is where real value can be

built. Certainly totally from past Fixed Ops Friday would agree with that. Fixed

Ops, that's where the value is. Today we've got operators who are actually

moving ELR, actually defending parts gross, actually building retention

systems and actually creating employees for life. If you're a dealer principal,

if you're a general manager, fixed ops director or service manager, today's

episode might be eye-opening and it might be uncomfortable. That's good. And

first, let's hit today's auto industry headlines. First up today in the news,

for years, the three-year-old vehicle was the safe bet for value shoppers, but

that script has flipped. As of last quarter, three-year-old units averaged

$30,699 and sat 45 days. That's the slowest fourth quarter turn since

2017. This according to our friends at Edmunds. Meanwhile, current model year

used cars quietly became the value leaders. 2025 model year used vehicles

sold for about $6,370 less than their new equivalents and they made up roughly

one in every 12 used sales. That's a high ratio, but mileage is doing the real

work here. About 60% of current model year used units sold had under 10,000

miles. Once mileage pushed past 15,000, discounts widened to 10 grand or more.

That spread is what makes the near new category compelling if it's merchandise

correctly. What's the bottom line here? Well, the used car quote unquote sweet

spot is moving and dealers who recognize where the value story is moving

instead of where it used to be will likely be much better positioned. Next up

today in the news, a new report by Global Location Strategies has revealed that a

much larger share of OEM investment is being concentrated into a smaller

number of massive high stakes bets. So the question is where are OEMs spending

the money today developing projects and investments amounting to a billion or

more. Now account for 43% of all cap spending and that's up 18% from a

decade ago. And the recalibration of that cap spend is increasingly being

directed towards next gen platforms, including battery electric vehicles,

hybrid and advanced battery manufacturing and large scale retooling of

existing internal combustion engine plants. However, the availability of

skilled labor permitting speed and whether a region can actually scale

infrastructure are the limiting factors. What's the takeaway here? Well, when

OEMs concentrate capital like this, it directly shapes who gets what product

and how fast it moves and that revenue is on the move. Speaking of revenue and

other automaker news, Stellantis posted a, get this, $26.2 billion net loss for

2025, including $23.8 billion in the second half alone, marking one of the most

financially painful years in company history. Much of the financial hit stems

from pulling back on EV investments and the losses wiped out U.S. profit sharing

for union workers for the first time in 15 years. And it included $2.2 billion

in North American losses with $1.4 billion of that tied to tariffs. CEO Antonio

Filogio says a turnaround is underway pointing to a 150% increase in North

American orders and the return of the Jeep Cherokee now back in Mexico production.

On top of that, RAM is doubling down on Hemi V8 trucks, adding 100,000 more

units this year with 50K already ordered as looser emission rules open the door

for more gas-powered production. But that's a big loss. And finally up today,

dealers may be noticing fewer clicks on their websites. They should know that at

least some of the dwindling traffic is due to how AI is rewriting search engine rules.

April Simmons, corporate internet and marketing director for the Horn Auto Group,

explained why in a recent webinar saying dealers should review what they've already

what they have already and start by fixing that foundation instead of getting distracted by every

shiny new AI toy. Buyers are moving away from keyword searches like quote F-150 near me and

they're opting for conversational prompts asking AI which vehicle better fits their lifestyle.

And large language models like Google, Gemini and ChatGPT are responding

with some of the summarized answers. That puts pressure on what Simmons calls prompt visibility

and generative engine optimization or GEO meaning dealers must structure content so AI can understand

site and summarize it, not just rank it in traditional SEO results. Looking ahead, as AI

generated results expand, traditional clicks will likely continue to decline. And dealers who

strengthen site accuracy, schema and human-focused content will now be better positioned to stay

via visible as search behavior evolves. The fascinating part of that as a little aside to me

is that it's being proved that ChatGPT, Gemini and other AI search tools preference human created

content and SEO more than it does AI generated SEO. So that's a bizarre twist in this world as we

try to figure out how to up our lead generation activities and how to become more visible in

the auto dealer community. Well, that's a wrap on today's industry headlines and everybody. Welcome

to Fixed Ops Friday. All right, Fixed Ops Friday is a reminder to everybody. We are streaming live

across all CDG social media platforms. You can post your comments into social media. We'd love to

bring them into today's show. It shapes the way we go. Love Paul Salisman for coming into the

chat just now. Reviews are king right now. But Paul, did you think it would be human-led content

that would be the thing that AI valued the most? So as we become more AI, the human thinking

is becoming rarer and more valued. I think that's an interesting conundrum as you think about

creating that SEO and creating those things that that chat GPT and Gemini will end up searching.

All right, we've got a huge show coming up today. It's all Fixed Ops based. First up today, we're

going to go back to my own group. I love talking to members of my own team. Bob Keele, our vice

president of Fixed Operations, Ziggler Auto Group. Bob Keele, welcome to the show. Hi, Sam. Good to

be here. Bob, it's good to have you here. You're sitting in a brand new office, by the way. So

Ziggler Auto Group, 41 stores, four states, 2700 employees. Recently at the Chrysler store there

in Kalamazoo, we added Jeep and had a major remodel underway. So you're almost back into your new

office. Congratulations. Thank you. So you oversee, Bob, Fixed Ops across one of the top dealer groups

in the country. You're focused on a lot of things right now. But let's first talk about how you're

solving the technician shortage crisis in the world right now. Technicians are valuable. They're

hard to find. They're hard to retain. Tell us a little bit about what you're doing to fix that

at the Ziggler Auto Group. Well, you're exactly right. They are hard to find and retain. We've had

every high school in the country has dropped their automotive program, or most of them,

and they've dropped the interest. So in the Auto Group, we saw this a couple years ago. We have

vet students through the service manager. And then we have an automotive instructor from a local

college that is retired. And then they spend one week a month for six months on a different portion

of the vehicle. When they leave the class that one week, if it was a week on breaks or a week on

steering, they go back to their mentor in the shop and they have a checklist of things they have to

do and perform throughout the next three weeks before they come back and then also bring back a

minimum of 10 repair orders that they worked on and worked on that specific area of the vehicle.

Let's help us out quite a bit. We've gotten involved in a couple of our communities as well

with the Kelm Zoo, for example, has what they call Kresa, which is a new

trades-based education system for a four-county school system. So we've gotten heavily involved

in that as well. So we can kind of handpick some of the people that we want to bring into the Auto

Group. So that's kind of what we've done. We're on our fifth class at this point, sixth, excuse me,

our sixth class. We've graduated 55 students out of there with a 90-plus percent

stick rate once they get out in the shop. So it's worked out real well.

So how does that work once an aspiring technician goes through the program? Do they get the choice

of a store? A geography does a store sponsor that candidate? How do they decide where to go? And then

once the training ends, what type of support continues with them as they emerge into that

new career? Well, they're actually in a store before they get into our university. They're

vetted by a service manager and actually recommended. And then we go through an interview process to

bring them in to the university. We have not declined anybody. We have that opportunity,

but the service managers do a really good job of vetting them in. And they stay in the store

normally that sponsored them through the event. Once they graduate per se out of our academy,

they're immersed in the manufacturer training, the online and the in-person training that the

manufacturer offers as well. And they're coupled with a mentor throughout that training process and

bring them up through the flat rate system through that manufacturer. They've already

displayed their interest in the manufacturer and obviously in the industry because they came to us,

but they have an interest in a manufacturer before we ever put them in the class.

So if there are aspiring technicians out there, whether the Chicagoland, Kalamazoo area across

Indiana, Wisconsin, looking to get part of that program, would they go into a Ziggler store,

talk to a general manager, talk to a service director? How do you get engaged and active in that?

They actually can get in and see the service director in the store. They can also go to our

website and fill out five pieces of information right there that will come directly to me.

Then I can get them to the store they want to get to and they can kind of usher them through the

introduction and the application process from that point once they show the interest.

We have a specific website out there that is a sub-site of our company site that just goes to

employment for parts and service and that's been very productive for us. So actually let's

transition to that for just a minute. So one of the things that you and I get to be involved in,

not everybody in automotive gets to do, is we get to go to NASCAR races and it's cool as heck to

be able to be there whether it's Daytona, whether it's Atlanta, wherever. The Ziggler Auto Group

sponsors a rising star in NASCAR, Kalamazoo-based native Carson Hosevar. He's on the number 77 car.

Let's go see a video of Carson. Anybody who's been to a race, Bob, knows there's nothing quite

like the sound. There's nothing quite like the sound of that engine at NASCAR. Why does Ziggler

sponsor NASCAR and what does it do when you think about hiring and recruiting technicians and employee

engagement? What is participating and being part of NASCAR? How does that enhance the value

property position at the Ziggler Auto Group? It definitely enhances our position. It's something

that not a lot of auto groups do. Of course, the Hendrick Auto Group is heavily involved in the

South. We're the only one in the North that's involved with that. We've got an owner that loves

everything racing and everything automotive. Your service employees are usually positioned

in that environment as well. They like that. We take people to races. We do suites. We do

shows at local racetracks. It just gets everybody involved, excited, gives them something common

to talk about. As you can see, our technician website was on the back of the car. That's on

the thing. It's ziggler.com. It creates excitement. We have swag. We wear black with gold. As you

can see in the picture, the car is black with gold. Everything brands our Auto Group along with

our parts trucks and everything else. It's just a national branding and a lot of fun. It'd be

amazing amount of text messages I get from technicians and advisors on Sundays with status of the

car and that type of thing because all the guys are watching it throughout the day. It builds

excitement and fun. Carson's at our Christmas party every year. We normally have a car around

a couple of times throughout the year. It builds excitement, builds a lot of fun, and people really

like it. Anyone who was watching Daytona, it was a heartbreak into the final lap, white flag.

Carson Hosefar was in first place until he got tapped from behind about a quarter way

through that final lap. He was jammed into the wall, ended up finishing, I think still top 20,

which is pretty impressive after being spun out, but a legit shot at first place. Then I think

finished top five at Atlanta shortly thereafter. Super exciting when you think about just being

part of that. I think that's something that employees love is the excitement surrounding

having an affiliation to a sporting event like that, not to mention access. You mentioned the

message that's on the backside of the bumper. Are you able to hire and recruit technicians

through that? Do techs actually watch that and then submit and say, hey, I want to join your

auto group as part of that? 100%. That website is readily available. All of our managers have a QR

code on the back of their business card that takes them to that site directly as well. We use that

moniker throughout the auto group and throughout our recruiting process. There's no question that

when a guy sits down in front of you, they want to talk about NASCAR to begin with. A lot of our

employees have diecast. Everybody's excited to get pictures with Carson. It draws a certain

amount of excitement back to the auto group for fresh employees, for sure. Bob, it's interesting.

We talked about how critical in 2026 service departments are across the nation. They're

the lifeblood of a car dealership. Retention totally has been on here many times from the

needle auto group talking about the importance of retention. Celebrating success is something

sales has typically done a great job of in the past. Fixed ops, many would argue, have not

been as forward thinking about celebrating success. You were highlighted in automotive news this past

year for a tradition that highlights the best technicians and service advisors. Tell us a

little bit about that, how it came to be, and what you do on an annual basis to celebrate techs and

service advisors. On what we have, we call it the President's Circumstance. It's for the best of

the best. We've got a lot of great people. We collect data monthly. Technicians are based on

production. Advisors are based on a lot of different things. Hours per repair order,

effective labor rate, CSI, which is the big one with advisors, and we celebrate our President's

Circle. We send out the standings monthly, and then at the end of the year, we have 20 technicians,

10 domestic, 10 import. We have 10 advisors, five domestic, five import, and we have a real

large celebration. We announce it to the group. We make a big deal out of it. Then we have a

celebration annually. We've gone to the Autobahn a couple times. We've raced NASCAR at MIS. We've

gone to a Chicago Cubs game. We've done a lot of different things. We spend the day with them,

celebrate them. Everyone gets a nice trophy and some gifts, some parting gifts to take home with

them that have got our logo on them. The reason it all came about is, like you said, Sam, a lot

of the fixed operations guys go unnoticed. Can the unsung hero? Everybody worries about selling

cars and everything else. We have a hand in that as well. We're a team from the front to the back

of the store and recognizing monthly for great performances is something that we do, and then

an annual contest at the end of the year, which is a points-based system, and they get to spend a

day out with Aaron. Aaron is always at our celebration. Carson Hostbar is at our celebration,

and myself, a couple of our recruiters, and then all the employees that are involved,

and that's a really, really big day. It's a fun day for sure. A big project you've been

engaged in across the Auto Group this past year, kind of our last topic we'll hit today is

raising ELR. Talk to us about what is ELR? Why is it an important lever and what are you doing to

move that lever in February of 2026? In fact, ELR stands for Effective Laborate,

and basically what that is is that's the dollar amount you are effectively charging the customer.

Everybody looks at door rate and everything else, and there's a lot of things that affect

door rate, whether it be a maintenance item or an item that you don't get your full repair rate

out of and that type of thing. The biggest key to us keeping our effective labor rate up is now

we can, once our effective labor rate is at a high enough point, we can go to the manufacturer and

get our warranty labor rate raised as well. That's been a huge improvement. A lot of changes in that

field since COVID, a lot of increases. Our training expense is going up on the regular.

Technician wages are going up. The intricacies of the car are causing more time to be spent on it,

and that type of thing. Effective labor rate is monitored basically daily in all of our stores

and changes are made when it seems necessary if we're not hitting our targets. Then the target,

then, of course, lets us do the surveys and then file with the manufacturers to increase what they

are paying us as well. As our business moves forward and our customers move forward, we do

have a lot of, the average age of the car on the road is lower, but there are a lot of extended

warranties out there. We've got some manufacturers that go to 100,000, 50,000, 75,000. There's a

lot of things out there. Factory service plans, even though the vehicle is out of factory warranty,

you have an extended warranty while you're reimbursed at your factory warranty labor rate,

so it is crucial that we keep that pacing with the customer. There are some where

as anywhere, depending on the store, 40% to 60% of our business is warranty, so that is a large

input that we need to make sure we are keeping pace with the market, with the business, and with

our customer paid door rates. Effective labor rate is the only way you can do that, and then

part reimbursement rates, of course. So Cox Automotive recently came out and said,

fixed ops is one of the biggest opportunity points in automotive in 2026. Opportunity to

capitalize, retain customers. They talked about lifetime value of a customer in multiple different

places. Jonathan Smoke and the new head of, that new head chief economist Jeremy Robb both said

somewhere. When you think about 2026, Bob, what concerns you most when you think about fixed ops

and what are you working to solve for the rest of this year? Well, the biggest concern of fixed

ops, obviously, we need to keep people coming through our doors. We need to make them, not make

them, we need to get them to realize the value that we offer with our training and with our

quality and that we're always going to be there. The aftermarket guys are always nipping at our

heels and they are, they're always out there looking to take some of our business. They don't

have the training or the technology normally that we have. So we need to focus on that and we need

to focus on retention and retention starts when the customer arrives at our doorstep, making them

feel welcome, doing a solid multi point inspection, telling them what is going on with their vehicle

and offering solutions when they have problems. Not only is finding a problem with the customer's

vehicle important, but the guy that takes care of his care that doesn't have any issues and you

can prove to him that, you know, he's done a good job. He doesn't have anything coming up and he

can build that trust in you because if we have trust at the service lane, we're going to be unstoppable.

You know, transparency is going to help with that. Transparency with our pricing, transparency with

our inspections, transparency with our people, transparency with our process. But retention

is going to be the key moving forward and we're going to have to build value and retain that

value with our customer and that's going to be done through our process and our policies.

So the industry is focused on fixed ops right now as vehicles get older and the kind of the

customer retention becomes so important. Why do you think fixed ops has been such an overlooked

department over the past several decades? Why is it now that fixed ops getting so much attention

in the auto industry, Bob? Well, the attention on fixed apps started back with COVID when we

didn't have any vehicles, right? We didn't have anything to sell. So we had to sell more out of

the service lane to keep the stores going. And there's always been somewhat of a mentality of

a necessary evil being a service department. And we've been fortunate enough in our auto group and

with my 35 years here with the auto group, we've been able to kind of change that paradigm a little

bit and have everybody realize that we are in this together. There are no silos. It's not a

strip mall. We're in this deal together and we need to take care of them on the front side when

they buy the vehicle. But we need to also show some focus towards the service department and

fixed ops to take care of them so they come in by that second, third, fourth, and fifth.

You know, that comes from your use care inspection process. That comes from your sales process.

That comes from your service lane. If you can make that customer feel like there really isn't

anywhere to go anywhere else, that's when they're going to be valuable to you. And it's like, you

know, everybody always says, Hey, I've got a guy. I've got a guy. Well, guess what? I've always

preached to my service departments that we need to be their guy. We need to be the one that they

call and we make them comfortable enough and we make them trust us enough where there really is

no reason to ever go anywhere else. And if you are transparent with your customers, you quote

things competitively where they're supposed to be. If they do go out and shop anywhere else,

they're going to come back anyways because they realize you're taking care of them.

So the focus on fixed ops has become in the last two or three years because we're not selling as

many vehicles whether it is, we can't get them. They're not producing them. The pricing, you know,

people are thinking that it makes a little bit more sense to maybe keep that car one or two years

longer due to the fact that the expense that's involved in replacing it, you know, at least

portfolios went backwards in COVID. That helped the service department as well. Those are starting

to come back a little bit and we'll probably I don't know if we'll ever get back to the levels we

were at. But if we keep the focus in the service department on transparency, trust, and value,

we'll be just fine. Bob Kil, Vice President of Fixed Operations Ziggler Auto Group. It's always

great to have members of our own team on the show and, you know, selfishly highlight excellence in

our own world. You and I basically share a building office. We appreciate you being on the show today

and sharing perspectives on retention and recruiting technicians into this industry.

And then the heck of a lot of fun we all get to have at NASCAR. So, Bob, thanks for being on the

show. Absolutely. Thanks for having me, Sam. Appreciate it. What's a fun conversation? So,

tell our listening audience, everyone out there, post up in the comments, why do you think Fixed

Ops has been overlooked for the past decades? Why is it only now that the auto industry is coming

here saying, hey, this is an important time to pay a note? It's an important time to train, you know,

within our own group. It's fun to see technicians and service advisors getting recognized. That's

kind of newer in the auto industry. We've been doing it a while, but, you know, a lot of the

limelight historically in automotive has gone to the sales side. Why is Fixed Ops kind of a late

arrival to that? We'd be curious to get your comments in the chat and the notes and we'll

bring those into today's show. Let's talk Impel. Today's episode is brought to you by Impel.

Impel's service AI with voice AI delivers proactive VIN-specific outreach based on individual driving

behavior, captures missed calls and schedules appointments instantly by text and by email,

advisors stay focused on the drive, customers get fast personalized service, learn more by

clicking the link in the show notes below. Click the link in the show notes below to learn more

and or you can also click the QR code off to my side there. And if you're watching after the fact,

you can you can obviously go to the link. We appreciate Impel sponsoring today's content,

including the conversation with Bob Keel about retention and a little bit of NASCAR thrown in

for good measure. So thank you Impel. We appreciate you guys sponsoring today's show. All right,

let's transition directly into our next guest up today, service director Volkswagen of Clarksville,

Indiana, John Bishop. John, welcome to the show. Thank you for having me. John, it's awesome to

have you. Thanks for being on. So tell us a little bit about yourself, what you do and what you do.

Well, so I'm service director of Volkswagen of Clarksville, Indiana. And I started out in this

business 16 years ago, washing cars, lot attendant and moved into a technician position and then

was fortunate a general manager said, Hey, why don't you try to write service? So

started writing service at a young age and really understood the fact that we were what we were

doing maybe wasn't exactly the way we could have been doing it. And then as I continue to develop

an age, I've learned in a watch that retention numbers continue to slide off and we're losing

customers that are unhappy. And then you really have to do a deep dive and focus on which really,

which really the catalyst here and what's causing that problem. And if you dive enough,

you'll start seeing that really it's us looking in the mirror and reflecting on the process that

we have is the same process that we've had as dealerships for as long as I've been in the

business where KP out focused, but we're not customer focused. You know, it's interesting. I

appreciate you noting it. So it seems to me as we came out of COVID inflation, increased cost of

repairs, labor, everything, it masked the problem. The RRO counts as an industry are going down.

We're seeing a lot of defection to non OEM repair facilities, places like Jiffy Loop for basic

services and whatnot. You say it's process that's driving it. What process is so old and outdated

that it's pushing consumers away to repair facilities that have no business? In many cases,

repairing the intricate vehicles we're selling today in 2026?

I just think that we're so focused on sales that we're pushing customers into a different area of

repair. So when you come into the store, you're greeted with a, Hey, your cars do for this service

and it's $500. Well, then you get an MPI inspection. Despite transparency in the videos,

it's still asking for what money? Well, then you're, Okay, now your car's finished. Now I need your

money. But yet, where do we build the relationship? At what point in this process that's built,

do we focus on the customer and less about the money? Because obviously if, go ahead.

So what are you doing today in February, 2026 to solve this defection problem,

to focus more on the customer instead of the money, to make the customer the center

of that retention strategy? Focus on the customer, ask them about themselves,

take them out of the experience of the car servicing. It's never going to be convenient

when it breaks. It's not realistic. So when they come in, they're already,

they're already ready to put their guards up. So you have to break those down. You have to be

willing to listen, talk less, and then work with them for a solution. This isn't sales.

This is problem solving. They're coming in with a problem. It is our job to find a solution for

them and make it more convenient. Jiffy Lou, Valveline, whoever it may be, they are in business

because dealerships back in the 80s were more interested in large repairs, but never interested

in doing the quick services. And now dealerships are looking at each other trying to figure out

how to get that business back. So John, in February of 2026, are there things that you're

doing at your dealership there at Volkswagen of Clarksville to focus more on that customer?

Is there a technology you're implementing? Is there a process? Is there something others could

replicate? Yeah, just treat people like you want to be treated. I know it sounds crazy that it's so

simple and so basic, but you know, that's the reality. Cars are breaking. You know, cars will

break down, but how do you make them feel when you come in? Customers look at experience and it's

based off emotion. You know, if they feel good about you and they trust you, they're more likely

to purchase whatever they need for their vehicle. And that's the simple facts.

So Bob talked, part of the Ziggler Auto Group, he talked earlier on about the MPI process.

So in your store, how is that MPI process? What does it look like? Is it paper? Is it video?

Is it text communication? What are you doing? So Volkswagen Group of America requires video

MPIs to be done with every vehicle. That's a technician going over your brakes, your tires,

your fluids, and then demonstrating to you visually what you need and why you need it.

Or maybe even starting the process when they don't really need it, just letting them know that

coming soon, this is what you're going to be looking at. So those videos do provide transparency.

Like Bob said, it's a game changer for the market, but we're still missing a key point. No matter

what information or what data we give them, whether it's chat GPT or Google, we are still

missing the customer connection. And without that, our retention numbers market-wide will continue

to drop. So let's pressure test that a little bit because you have said that a couple of times,

then I want to bring in a comment from Paul Salzman. Is there one strategy that you're asking

your service advisors and your technicians to implement to help solidify that connection?

I mean, obviously making sure that the customer understands the process that you're communicating

efficiently and effective, but is there a process you're leaning in on in February 2026?

Yeah, the process is when a customer comes into your service lane, make it about them,

prepare them with word tracks stating this is, you're at 60,000 miles, you're coming in,

you do have some services that are due by the manufacturer. Let's get the inspection done by

the technician who's going to make those recommendations. Instead of making it about price

point from the start, let's let the technician build the value which we keep going back to,

let the technician build the value in the MPI. Paul Salzman comes into the comments that says

perception warranted or not creates customer churn. If clients perceive they're going to

dealer service is akin to proctologists, you lose their positive sentiment to the entire store.

So his point being, I think, if they're begrudging a visit to the dealership as much as they begrudge

a doctor, it's going to be a challenge to have them stay connected to the store. So speaking

of connection, how do you stay connected to your clients between major services in a way that retains

them? Just try to reach out with them and email, you know, instead of sending them just coupons,

let's send them information, information of how the word convenient can be for them instead of

scheduling with a phone call, scheduling with an online provider or a text in and scheduling that

way. But communicating with knowledge, educate them to know that we're here to help them,

that it's not just about the money. Even when they don't need us, we need to provide them with a

service to let them know that we're here to help. Okay, you've talked often about not only

retaining customers, but retaining employees. You talked about employees for life. What does

employees for life look like in pay plan and career pathing? Well, employees for life is equally

as important as customers for life. You have to treat your employees and understand that life

happens, whether it's calling in or missing work, you structure a level of respect between you and

teammates and understand we are one. We work together. And that's the biggest focus point.

It's not always about money. Nobody's, for the most part, most people don't quit just because

of income. They're quitting because of culture. They're quitting because of leadership. They're

quitting because of a manager. And there's a difference. You can be a manager, but are you

a leader? And that's what this industry needs leaders in order to get us back on track to where

we need to go in order for this industry to continue to grow. John, why would you say good

people leave service departments? You've alluded to it a little bit through leadership, but

what is causing a defection in most service departments in February of 26th?

A lot of times it's going to be culture. I mean, culture sets the standard for

what they expect and the way that they're treated. And again, it's just like customers.

They just want to be treated like people, treat them fairly, treat them kindly,

work with them. Most people, either you have kids or don't have kids, life will happen.

And it's not a matter of if it's a matter of when.

Yeah. Yeah. What's the fastest way you in your store? Last question up, and then we're going to

bring you back into the round table. What's the fastest way you've improved morale or culture

without spending a lot of money in the service department?

Just understand the titles mean nothing. We're all here to do the same task. We're here to help

people understanding that that is the key. Stop looking at the numbers and the KPIs

and focus on the customers. Do they feel value when they're here? And if that's not happening,

then you're not doing what needs to be done. Speaking of KPIs, what do you think is the most

misunderstood or overvalued KPI in a service department this year? Effective labor rate.

Okay. You're against effective ELR. Okay. Yeah. I mean, hands down. I mean, again, if we can't get

retention done correctly, why are we still looking at money when we can't even get the customer side

of it done without the customer? The effective labor rate doesn't even exist.

Yeah. Interesting. Okay. So your perspective would be, let's get the people side right,

then let's focus on ELR. So a question for you. You're a Volkswagen dealer.

Volkswagen famously is trying to inject vehicles into the U.S. marketplace through an alternate

route through Scout. And they've actually gotten approval in many states, Colorado,

California, Utah to name a few. What do you think about that? Does that concern you as a

Volkswagen dealer in 2026 that your own OEM might be going around you to sell vehicles?

I think it's an opportunity to grow, but I also think that you have to look at it from a customer

service standpoint as well. There has to be a reason. Usually the only reason these actions are

taken is because maybe we, as an industry, haven't done the right things the right way. And to avoid

that possible loss, we choose to go around the stores. You know, the less people involved,

maybe the more opportunity it's going to provide. So how do you remedy that? How do you make Scout

not a threat to you as an OEM? Start with day one. Work on your customer process first and

everything else will follow. Yeah. Fantastic. Well, John Bishop, service director, Volkswagen of

Clarksville. Hang out for a few minutes. We want to bring you back at the end of the show and have

you participate in a little bit of a roundtable test your ELR theory and your strategy to win

in 2026. Thanks for being on the show, sharing your perspectives. Thank you.

You know, it's a fair point. What do you think in the comments? We'll bring your thoughts in.

Is John correct that we need to focus first on the people, the process, and update those processes

to better reflect 2026? We're going to transition next into Vince McKizak, director of parts

operation at the Hawk Automotive Group. Vince, welcome to the show. So Vince, tell us a little

bit about yourself and what do you do in Automotive? I started 12 years ago-ish, 2014. I came in. I

just fell into the industry, knew really it wasn't not a car guy at all. I'm not your traditional

parts guy by any means. I was a computer guy, process person. Came in doing consulting just to

try to fix in a warehouse operation. Instilled that culture where it really doesn't matter what we

sell. It could be a car part, a t-shirt, a computer part, or an orange. You got to have the right

processes, the right people. And then at the end of the day, it's the right part, right place, right

time that age old adage started there. And then kind of just fell into it and grew and grew and grew.

And even my own people will make fun of me that I barely know the difference between a hood and a

fender to this day. But you know, again, if we if we have, as John kind of alluded to, you have the

right leadership and the right team that you build. And you just put the right places, people in the

right place. You got a receiver as a receiver, a quarterbacks, a quarterback, and try to make

the best of it. Well, we appreciate you being on the show. You're one of the first, if not the

first parts directors that have been on the show, bringing a different perspective. And I'm fascinated

by your background in computer and technology. What do you think most dealers miss about parts

operations and distribution given your given your technology background? What are most

dealer operators missing out on when they think about parts?

Great question. I think the thing that I one of the things I can bring to the table since I wasn't

stuck in these four walls of the dealership auto world for years and years and years is

and there's a big world out there. And you know, you hear that all the time, we got people and

we need both, you need both, you need people that have been doing it forever, you need new

new ideas. One of the things, you know, I've been doing this 40 years, etc. Well, you've,

all that tells me is you've been stuck inside these four walls. And there's a big world out there.

And what I have learned about the auto world, whether it's manufacturing, dealership sales or

after sales, the auto industry, unlike other industries, works on very, very tight margins.

So therefore, a lot of times investment into technologies and things like that and making

yourself more efficient is overlooked or just, nope, we can't make the investment,

can't make the investment. So that is the first thing that I noticed.

What's one investment in your world coming in with your technology background

that absolutely crushed it thinking about moving into 2026?

And you know, it's as simple as it seems now, but at the time we were doing everything very

archaic in terms of everything was manual, no scanning, no logistics software. We just didn't

have software basically, everything was done manually. And even again, this is like an archaic

thing, but we weren't even really using material handling carts to the best of the efficient we

should. So basically, the basics. How did you coming into the role without an automotive background

get buy-in from other teams who knew better than you because they've been in automotive

longer than you? How did you deal with people who knew so much that just wasn't so?

Well, one thing I'm very, very good at and very, I have a lot of experience at is being highly

disrespected and undervalued and appreciated for sure. So in previous lives, I learned I just

get in there and do the work. So every single day, every single weekend, I basically lived there

moving from Detroit to Chicago, living out of a hotel essentially and a buddy's basement.

I was there every day doing the work and that's how you that's how you gain the trust of anybody

in any industry. You just roll up your sleeves and do the work. So you're on the Car Dealership Guy

podcast. You're on the Daily Dealer Live. You're speaking to a ton of parts managers and directors

out there as well as auto dealers. What would you say to the parts manager sitting in the parts

department a key crucial role but often overlooked? What would you say to that manager who has a good

idea about implementing technology but just isn't getting heard? How tenacious should I be at

advocating for that position and how should I sell the dealer on this idea that I know could help

better operations return more profit in 2026? I think our role as directors and managers,

we essentially have two roles in any this is any business. You got to make the owners happy and

you make the employees happy. You make the owners happy if they don't have to deal with you know

employee nonsense and stress and drama and you're making them more money and you make the employees

happy if you make their lives easier at work and you show them how to make more money. There's a

lot of us. The best way to implement new things that get resistance is one getting there and getting

your roll up your sleeves do it yourself and show them hey this is look at how much easier your

lives are now and how much more efficient it is. When you get an employee that gets more efficient

and they're making more money for you and they're making their lives easier and they're happier

at work after that rough period because everybody hates that change. When you can show that to the

owners that hey listen this investment work look at how much more efficient we are at ABC processes

and therefore a bottom line recognition. That's how you get buy-in from both. Fantastic. All right

as director of parts operational Hawk Auto Group you've talked about pricing change to increase

gross or move gross. What pricing change in 2025 has actually moved the gross and positioned you to

win in 2026 in the parts world? Well this one is tough. We evolved quickly and went the wrong

way a couple times that's for sure. So a couple years ago we were you got to grow grow grow the

manufacturers make these tiers and everybody knows the manufacturers have these different buckets

and all that and they essentially promote a race to the bottom even though it's a good it's everybody

knows it's a free market and you know you can do what you want but they promote this race to the

bottom. There's a as we know between our own groups between your group and mine there are barriers

to entry new people come in to an established territory and it's easy it promotes growth but

then all of a sudden you hit some type of ceiling and it's wow wow we can't grow anymore. So you go

from growing your overall business sales wise to get that back end money and then eventually

realizing you do the math wow it's not worth it. It's given away the upfront gross so dialing that

back and unfortunately quite frankly raising prices is what you have to do to save your gross

profit. So how do you balance that being competitive and being profitable in a parts department in

2026? Great question. I think I think John hit it on the head and a big time was your people

so you get buy-in from all your people on a certain culture and everybody has to you have to show them

the whole doing more using less mindset of from the financial statement side making their lives

easier on you know getting dirty with them and going through the grind with them. I think that

shows them that you can get move ahead and then as you're adjusting pricing and your talk being

quite frankly as John said again being transparent with your customers telling them this is what's

going to happen and just trying to preserve that service. That's the only thing you can do.

So in the parts department and in the parts world there can be fracture between pricing

at the counter in the service department and online. How do you keep pricing consistent events in

those three areas between the counter service and online? It's like anything else you're essentially

reading the room totally different pricing for totally different pricing up front for an outside

customer such as a collision even a collision customer versus a mechanical customer totally

different pricing different pricing than obviously warranty which is different than in the counter.

So what we try to do is we just try to categorize and make sure we we keep it nice and organized

and we don't lose any opportunity. You don't want to you don't want to lose the ability to

charge more when you can but take care of the customers that you need to. So is there a particular

set of software or communication tool or posting tool that allows you to do that within your

organization? We do. We use a couple of different outside. We have CDK which is what we use which

isn't the greatest but again something that I know from you know a software guy this industry has

the worst softwares in any industry like by far it would be nice. Why is that by the way? Why in

your opinion is it so bad? In my opinion it's because as the customer as we talked about earlier

the margins are so tight in the auto world so in the auto world we're not really willing to make

that large investment in expensive stuff such as a software. So when you're not willing to pay for

a lot of it the vendor is not developing it so we're not going to pay you know 10 grand a month

for SAP we'd rather pay a thousand a month for a CDK. So CDK when you're paying any CDK rentals

it doesn't matter and we've noticed this with the new people I'm sure you guys have too. Any of the

new DMSs that try to make it they're not willing to make that investment into their product because

no one's going to pay for it so if they don't have somebody to pay for why would they do it?

So you're speaking today to a lot of vendors there's retail customers out there that there are

people that are industry adjacent that would say come on Vince like automotive is enormously profitable.

You say it's thin margins is it truly thin margins is it really as skinny and as thin as you say it

is? On the fixed-top side for sure when you're talking about when you're talking about wholesale

specifically on the retail side of course it's great and I try to measure things up to your

own personal life you have 100 grand or 50 grand you saved up your entire life you want to invest

it you know the whole eight old adages you should get 10 percent on the market so we kind of use

as our baseline hey if you're an owner and you have money to invest are you going to make more on

the market or less so when we talk about fixed-ops your margins anything you know in the 20s is great

you know if your bottom line is 15 to 20 you're doing well when you start getting into wholesale

your margins anything below 10 now your owners are starting to thinking should we even do this

so with that are you even going to spend money because if you could do it make more in the

in the stock market for sure let alone car sales or fixed-ops or in the service side so

if you're less willing to make that investment to a vendor they're less willing to make that

development. All right we talked a little bit about pricing before we leave that entirely

we'll go to expense next where do most dealers in in February 26 where do they mess up pricing

in the parts department with such thin margins? I say a lot of people still have the age old

we have to be the cheapest we have to be the cheapest I think people are very scared to

just hold your ground and so that's where I think our biggest mistake is. So how do you deliver value

in parts which many could argue parts if anything is a commodity right how do you deliver value

and make it and take it away from being about price? It's very cliche but you give the good

service you have your guys if it's a driver he's trying to be friendly if it's a person on the phone

for an inside sales rep or a wholesaler they're trying to give as much information and talk with

the basics you know you're talking about like Fred Pryor sales 101 talk with a smile give

information where you probably didn't need to and quite frankly most of the time we're learning and

I know a lot of people are learning this they're going to use you for information and call input

the order with somebody else who's ever cheaper but if you can implement that same strategy with

retail person and even with your service technicians service technicians as we know are

probably in the same category as body shops or mechanical shops in terms of difficulty to deal

with sometimes but you just got to try to be cool with everybody and build that relationship.

Kevin Stuckey comes into the comments says culture is everything and then he says embrace

new change be the leader and the light for others and then long time poster Paul Kevin is as well

but eager K comes in and says it's not just the matter of the price but matter of comforting

people are used to the old software and too lazy to learn new software so sometimes change

is difficult so you've talked about you know on such thin margins in parts expense control what

was the first big expense and the most significant expense you've attacked in your auto group and

why what could others learn from that in 2026? Probably personnel which is tough I mean that's

a very big expense and you never want to try to do things with personnel if you don't have to of

course and like most big groups these guys these owners are awesome they have a passion not only

for cars but for just providing jobs for people in security and that's a that's one of the great

things about bigger groups is people do take pride in that and nobody likes to do expense control

when it comes to people so but those are some of the things that we have to do and we we have to

get more efficient which is the root of that being more efficient at different processes

so we talk a lot on the show about technology AI and other such things is there an AI technology

that's interesting to you in the wholesale and in the parts world in 2026? One of my goals is to

find something that can process orders and scrub vins I'm very interested in that okay as volumes

increase and etc we've discussed that a little bit I would love to explore some of those softwares

where an order comes through on one of the platforms and we could have people scrubbing vins

because a lot of the experienced countermen are starting to you know retire out well earned well

earned years of service from them and some of the newer people nothing against them we're asking

them to do more so we try to get that automation a little bit better. What when you say scrubbing

vins do you mean like big vent explosion like identifying the vehicle based on just the vent is

that what you're saying? Yeah so a part will come through and it's a part with the you know there

can be many things about the part number a part number could have changed it could be a super

session it could be a right versus a left the unfortunately the estimation if I'm just talking

collision wholesale side right now yeah a an estimation platform doesn't seem to keep up with

the uh with the catalogs so it'll the estimation software will say hey we need part one two three

it'll come across if we don't scrub that against the vin meaning is this the right part they requested

on what this actual model needs yes we're sending out the wrong part and that's on us.

Kevin Stuckey comes in the comments says hey part of delivering value is having the inventory to be

able to deliver same day so if you've got a large enough inventory stock where you can deliver same

day that's something that can drive up a little bit of the asking price and provide uh you know

potentially higher price in exchange for that convenience eager K comes in the comments and

says I agree with that um so as we wrap up before we go into our closing round table what do you

what would you say uh is the weekly KPI in parts that's most overlooked this year?

um I think it's starting to come into the light big time but I think receivables is a big one that's

typically been overlooked it's when you're in the parts when you're a parts person or counterman

obviously anything else driver warehouse worker you never think about the money come in and you

think I'm super super busy wow we must be doing really well um one thing that's very overlooked

and we as uh as part of the leadership team need to really focus on is is how much of that is our

customers are actually paying with the cost of money now different than it was a few years ago

I mean just look at everybody's own lives your mortgages are different you can't get a line of

credit on your house without paying seven percent same transferred to business so the cost of money

is more so in you know to their point yes inventory is good but the cost of inventory is very expensive

so we need to we need to make sure we're looking at uh receivables.

All right Vince McKizick director of parts operation a hot auto group thanks for being

on the show sharing your perspective we're going to actually bring John Bishop service

director of Volkswagen of Parkesville back on for our round table here at the very end this has

become a tradition I actually thoroughly enjoy and uh we've done this for a few fixed ops Fridays

in a row so welcome back thanks for uh being here all right we're just going to go through a little

bit of a lightning round uh on questions so question and either one of you can take this

should dealers in 2026 prioritize ELR growth or parts grossed first who wants that go ahead

Vince you gotta say parts guys gonna say parts gross for sure yeah I'm gonna agree I understand

though that parts is absolutely the we serve service and service promotes the dealer retention

for at the end of the day it's a new car sales what matters so absolutely service should be uh

the first focus and we just need to make sure we're back them up and just as just as a comment on

the last part of the conversation Kevin Stuckey comes in the comments says 100% receivables hand

hands down great answer so uh John I think you surprised our audience by saying you agree parts

gross should be the focus not ELR why is that well I mean historically speaking it's always

looking for labor rate increases like Bob said earlier we're always looking for labor rate

but nobody's talking about parts increases I mean how about every I mean they're doing just as much

work and if not more work to scrub vins and go through the process and they're the first person

to get you know chastised because the parts are incorrect but yet we don't give any glory back to

them so I agree I think parts should actually reap some benefits now because they deserve that

service and has been re getting all of that for a very long time while parts sit in the background

like stepchildren all right so following on that John here's the next question we'll get it from

both of you you first John is discounting in the service department is it cultural or structural

discounting whether it's parts or its repair orders is discounting cultural or structural John

oh it's cultural no doubt it's definitely a culture because I think that I think we spoke

about it earlier it's it's not about the money it's about the experience it's about how they feel

you can give great service and the price isn't what's mattering it's actually just how they're

treated from the start so discounting it means that you're discounting it to make up the difference

in what you may not have done correctly that's the reality we've coached customers to think that

discounts are normal instead of coaching them that good customer service is normal oh I like that

Vince thoughts I couldn't agree more and you know to take it one step further the culture between a

service manager and a parts manager one thing we've worked really hard on is making sure that

there's not friction traditionally it's been a us versus them thing and when that happens

we all kind of buy in on the on the getting a discount parts guys typically be really angry

man they're discounting all our stuff well we've had a lot of cases where we have our parts managers

and service managers in a good culture with each other they grow up and that way everybody's cool

about it no fighting all right I like that what next next question and by the way let's do this

eager k comes into the comments is that you guys in parts usually always get shoved to the side I

also agree with the comment of parts department feeling like a stepchild I'm gonna ask a robot

question in just a minute as we wrap up here but before we go there what's one fixed ops myth

that needs to dive and so let's start with you on that one a myth that needs to die yeah

uh I guess I'm not I'm I would have to even find out what some of the myths are I mean one of the

myths of by the way that's great about your background because you come from computer technology

you've applied that into parts you've created a thriving wholesale operation as a result I mean

I guess an us versus them type thing would have to die again between service and parts we've worked

really hard on our retail side of making sure service and parts departments are in sync not

against each other so for me and art my experience that's that's a battle that me and my counterpart

in service have really worked hard to do John one myth I mean I'm gonna say the same thing I think

it's cultural too though just as equally as much as the discounts it's cultural we've allowed this

to go on for so long focusing again on sales but not focusing on the people that are right in front

of us that actually generate those sales and generate the customer feedback and as we talked in

other shows you're talking about you know chat gpt you know jim and I is the base of that where

google is so your google reviews are feeding chat gpt so why not focus together on bettering this so

we can actually stand out in the crowd equally for parts and service yeah part service sales

everyone should be focused equally I think on that what's one change that would move profit in 90 days

one big change we've got an expert in service or fixed ops we've got an expert in parts

Vince what's one thing dealers could implement in the next that would move profit in 90 days

correct pricing for sure that's a very quick thing you could just adjust have the right

pricing for the right customer yep John all right we'll go with communication all right automated

robots they're all the rage right now yes or no to deliver parts in 2026 John no no

Vince no not yet not yet it's it's not quite there yet you would say so all right well hey to both

of you John Bishop service director of Volkswagen Clarksville and Vince macaizic director of parts

operational hoc auto group thank you both for joining us sharing your perspectives on fixed

ops on this fixed ops Friday thank you both thank you for having us yep Kevin Stuckey comes in the

comments dealers are too expensive charging for elite service if you can provide it just like

the Ritz and Disney they will pay for premium I think what he means is we've got to focus on

delivering value a race to the bottom in parts or in a race to bottom on price doesn't benefit anyone

and speaking of which thank you all for watching daily dealer live fixed ops this Friday February

27th where we break down the biggest moves in the car businesses that they happen don't forget

we're here live every Monday Wednesday Friday 1pm Eastern so if this is where you enjoy being

join us hit like subscribe leave your comments and we'll see you next episode Monday 1pm Eastern

thanks for being here everybody

so

Fixed Ops Friday w/ Bob Keuhl, John Bishop, and Vince McIssac | Daily Dealer Live

About this episode

Fixed Ops

vehicle fleet

front-end margins

OEM pressures

video MPI

used car

current model year used vehicles

mileage

near new category

capital spending (cap spending)

next gen platforms

hybrid

battery electric vehicles

internal combustion engine

Stellantis

EV investments

Jeep Cherokee

Ford F150

repair orders

NASCAR

Daytona

service departments

CSI

Cadillac ELR

Cox Automotive

aftermarket

multi point inspection

Volkswagen

OEM repair facilities

KPI

effective labor rate

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