Lemon Law - Mechanics Flat Rate Pay System
By Donald Ladew
There is a relationship between the auto repair technician Flat Rate pay system and the incidence of unrepaired Lemon Vehicles. It is more direct than one might think.

What is Flat Rate Pay System?

It’s old-fashioned piecework plain and simple. Imagine picking peaches. Instead of an hourly wage, you get paid a penny a peach.

The auto manufacturer establishes fixed times for every conceivable repair. This includes everything from a bulb replacement to installing a new engine. Most dealerships charge between $60 and $70 dollars an hour for warranty repairs. It’s in the dealership’s contract with the manufacturer that they may only charge for the repair hours provided by the manufacturer.

Here are some of the links in this chain of cause and effect:

- The modern automobile is computer controlled and complex.

- Vehicle computers fail and these software/computer hardware failures appear to be other non-computer components in the vehicle.

- Modern diagnostic tools don’t isolate faults; they suggest possibilities, areas of vehicle systems that might be at fault.

- The technician is rewarded for how fast he or she works, not how well.

- The dealership makes good money for warranty and non-warranty repairs.

- Quality and customer satisfaction are advertising slogans, not a way of life in the work place.

- Quite often poorly trained mechanics cause more trouble than existed in the vehicle before attempted repairs.

- The slow technician, whether excellent or not, will barely make a living and certainly receive hard talk from his supervisors.

Are all vehicles declared lemons at buyback unrepairable? Probably not.

Given these conditions, the chances a faulty vehicle will meet lemon vehicle legal definitions, i.e., four repair attempts during the warranty period, are significantly increased.

The Dealership Situation

Here’s an example of what dealerships consider a bad, bad thing.

1. A car that is still under warranty has a defective transmission. The manufacturer assigns transmission replacement a time to repair of 4.5 hours. At $65/hour for warranty repairs, the dealership gets paid $292.50 by the manufacturer for this warranty repair. (Remember, the manufacturer pays for warranty repairs.)

2. If it takes the dealership’s technician 6.75 hours to complete the repair. The dealership must eat 2.25 hours of technician repair time.

3. If the technician takes 3.9 hours to make the repair, the dealer will still charge the manufacturer 4.5 hours, and even though the technician only spent 3.9 actual hours on the job, he will be paid for 4.5 hours.

4. In the first case the service manager at the dealership complains to the technician, "sorry, Joe, the manufacturer reduced repair times again. You know those %^$%^$# aren’t part of the real world, they don’t know how long it takes to make orange juice!" He’s also going to strongly "encourage" the technician to make the repair in less time than that assigned by the manufacturer.

It is an unjust system with no redeeming value for the honest technician or the dealership. Who’s the big loser? You guessed it, the customer.

All the players in this game have very different viewpoints.