MY experience was in the car dealerships, where warranty work CAN be a profit center...if the dealership handles it right.
One dealership turned their warranty work from a break-even at best to a profit center by making warranty repairs a priority at the dealership. EVERY car that came in was run through the dealer computer to check for outstanding [uncompleted] recalls, no matter HOW old the car was.
Second, the warrranty clerk's job was adjusted, so that the top priority was NOT simply to FILE warranty claims for reimbursements, but to GET THEM PAID. Which meant that, when the DSM was in the dealership for his monthly visit, it wasn't just a lunch date with the service manager; it was time to sit down and explain some of the unpaid claims--which meant that the warranty clerk had to understand something about WHY and HOW the repair was done--and to get the DSM to authorize payment on as many as possible.
Technician pay? Simple answer. The dealership switched the techs from being paid Chilton time to being paid factory [warranty] time on a job. So then, if a job only paid 4.5 hours, but the tech took 8 hours to do the work, the tech only got paid the 4.5 hours. To make that palatable to the techs, hourly pay rates were raised in the shop...and the customer-pay shop labor rate was adjusted, initially to 3 times the hourly rate paid to the best-paid master tech.
Warranty claim settlement statements came off the cumputer daily, and 10-bin warrant parts storage areas were utilized [by the last digit of the repair order number], and all parts replaced under warranty were tagged...with all warranty parts tags filled out COMPLETELY. In the case of most manufacturers, they could still call a replaced part back for inspection up to 30 days after the claim was paid; so it was the warrranty clerk's job to issue a list DAILY of the warranty parts that were eligible for scrappage. In one dealership these guys owned, the warranty clerk pulled the scrap parts; in another, the parts department stock clerk handled that responsibility.
If the manufacturer's labor reimbursement rate for warranty repairs was low, most auto manufacturers had a procedure spelled out in their warranty administration manual to address that. Amout once every 12-18 months, the dealership would call the neighboring car dealers of ALL makes and do a survey of their customer-pay labor rates. If the "usual and customary" labor rate in the area was higher than the warranty reimbursement rate, the dealer could then petition the manufacturer for an increase in the warranty labor reimbursement labor rate. Usually the manufacturer would agree to an increase, even if it wasn't 100% of what the dealership was seeking.
And I've seen warranty parts reimbursement rates go from cost + 20% to an almost-universal cost + 30%...and when I got out of the parts biz, Ford was discussing going to cost + 40%. There was usually a procedure for claiming freight on the warranty RO, but most parts people didn't understand how to bill it, nor did most warranty clerks know how to claim it. In my last years in parts, some manufacturers were going back to the A-B-C-Z classifications on part; so if it was a class A part, it was something the dealer most likely SHOULD HAVE had in stock, and there was no freight reimbursement. Class B and C parts were eligible for freight reimbursement. Of course, just because FORD [or whoever the manufacturer was] said a certain part was a "class A" part, that was no indication that YOUR dealership sold enough of 'em [3 or more in 12 months] to stock 'em.
And towing was a sublet item. WHY?? Because most dealerships found that it was easier to get sublets paid, no questions asked, than to go to the expense of having their own wrecker or roll-back and keeping it [and a dedicated wrecker driver] in DOT compliance. Towing often had a maximum reimbursement limit; but then, most of the new-car warranties also had 1 year of some sort of emergency roadside assistance, which INCLUDED towing. In those cases, towing was only reimbursed under warranty for the amount in excess of the roadside assistance limits.
One dealership group I worked for sold their used cars at ALL their dealerships with Ford extended warranties. [A certain semi-rigorous used car inspection program had to be in place for the car to qualify for the extended warranty...but since the dealership routinely did used-car inspections before the cars hit the lot, it was easy enough to tailor the inspection to meet Ford specs.] So whenever one of their used cars came back with a warranty issue, they were booked in at the Ford dealership wirh a Ford warranty repair order...and then the work was "sublet" to the other dealership they owned, because Ford very seldom questioned parts and labor rates on sublet repairs. Customer paid their $100 deductible, dealership made the money on the actual repair, and everyone walked away happy.
Farm equipment manufacturrs MAY work differently than that. If the manufacturer is THAT bad about standing behind both their equipment AND their dealers, I'm not sure I'd be so darn proud to represent them. BUT that's based on my 30 or so years in auto dealerships, and not from any experience working for a farm equipment dealership. And based on that, I still think I was justified in walking away from the Ford dealership who told me he'd find a way NOT to schedule me for repairs...ever. Because I've learned over the years that if he was losing money on his waranty work, it was most likely his own fault.
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