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[Cardboard Joe]

You don't really think that dealers "profit" from performing warranty work, do you?

[Gone Fishin']

You don't really think that dealers "profit" from performing warranty work, do you?

Of course they do. They charge the Moco the same hourly rates as they would charge the customers. No mark-up on parts, however. In fact there are many dealers who post two different hourly rates, the higher being used for warranty work, while the lower (more competitive) is charged to the customers. And any dealer with a happy customer benefits to begin with!

Ride safely,
Louis

[ultrafxr]

Of course they do. They charge the Moco the same hourly rates as they would charge the customers. No mark-up on parts, however. In fact there are many dealers who post two different hourly rates, the higher being used for warranty work, while the lower (more competitive) is charged to the customers. And any dealer with a happy customer benefits to begin with!

Ride safely,
Louis

Louis, are you a dealer?  I do not have details but from what I've been told by service writers and managers I was led to believe that warranty work was less profitable than billable work and that the moco set the time and rate they would reimburse.

[Gone Fishin']

Louis, are you a dealer?  I do not have details but from what I've been told by service writers and managers I was led to believe that warranty work was less profitable than billable work and that the moco set the time and rate they would reimburse.

No, not at all.
But: I do know for sure that the dealers in Europe work the way I have described. Maybe the deal is different in the U.S., however the U.S. dealers have always had a strong command over the company, so I am lead to believe that they'd operate similarly. Obviously the Moco has certain guidelines for specific jobs, such as an official recall (even probably the 905/906 campaigns) and will pay a fixed sum for these, but regular warranty work is most probably just billed as it was done. I think this would also be prudent, since no manufacturer would want to have grouchy dealers servicing their customers in a warranty situation. All warranty issues I had with H-D bikes have been taken care of most generously and very comprehensive.

Ride safely,
Louis

[Cardboard Joe]

The factory sets the time allowed for the repair, and it is usually around 50-75% of the time that it actually takes. No markup on the parts used. Diagnostic times are a joke too..... The best a dealer can hope for is to break even on a warranty job. Naturally, they prefer regular work over warranty!

[grc]

You don't really think that dealers "profit" from performing warranty work, do you?

Harley functions similarly to the auto companies in that they publish their own flat rate manual.  There are specific labor codes for most jobs that directly translate to specific labor hours that can be charged.  If the book says you get 5.2 hours to do a particular repair, that is what H-D will pay.  As for the labor rate, that will vary depending on the laws in each locale.  In the USA, laws have been passed that require manufacturer's to pay the dealer's normal retail labor rate.  The trick is the retail labor rate has to be verifiable, not just some BS posted on a price board.  If a manufacturer wishes to protest that claimed $100 per hour rate, they can audit retail work orders and determine the actual rate.  BTW, in those cases where a labor code doesn't exist or extra diagnostic time is required due to the complexity of a problem, most manufacturer's will reimburse the documented actual time.  Documented as in time stamped on and off the job.

There are also laws in the USA regulating what auto manufacturer's must pay for the parts used.  It isn't just dealer cost, it is dealer cost plus a percentage.  So no matter what your friendly dealer may try to make you believe, they do not lose money on warranty repairs.  They may make slightly less than if that same job was retail, since there is no limit to how many hours they can charge and at what rate, and the sky is the limit on parts markup.  I'm assuming that those laws would also apply to folks like H-D, but I can't state that as fact.  Maybe one of our dealer members would like to jump in and give us the latest info here. 

Conclusion, yes dealer's do profit from warranty work.  How much they profit has much more to do with the competence of their shop than with the reimbursement rates from the manufacturer.  Inefficient or incompetent shops just pass along the costs of that inefficiency or incompetence to the retail customers, but they can't do that with the manufacturer's.  That's the real issue in a nutshell.

Jerry

[Gone Fishin']

Harley functions similarly to the auto companies in that they publish their own flat rate manual.  There are specific labor codes for most jobs that directly translate to specific labor hours that can be charged.  If the book says you get 5.2 hours to do a particular repair, that is what H-D will pay.  As for the labor rate, that will vary depending on the laws in each locale.  In the USA, laws have been passed that require manufacturer's to pay the dealer's normal retail labor rate.  The trick is the retail labor rate has to be verifiable, not just some BS posted on a price board.  If a manufacturer wishes to protest that claimed $100 per hour rate, they can audit retail work orders and determine the actual rate.  BTW, in those cases where a labor code doesn't exist or extra diagnostic time is required due to the complexity of a problem, most manufacturer's will reimburse the documented actual time.  Documented as in time stamped on and off the job.

There are also laws in the USA regulating what auto manufacturer's must pay for the parts used.  It isn't just dealer cost, it is dealer cost plus a percentage.  So no matter what your friendly dealer may try to make you believe, they do not lose money on warranty repairs.  They may make slightly less than if that same job was retail, since there is no limit to how many hours they can charge and at what rate, and the sky is the limit on parts markup.  I'm assuming that those laws would also apply to folks like H-D, but I can't state that as fact.  Maybe one of our dealer members would like to jump in and give us the latest info here. 

Conclusion, yes dealer's do profit from warranty work.  How much they profit has much more to do with the competence of their shop than with the reimbursement rates from the manufacturer.  Inefficient or incompetent shops just pass along the costs of that inefficiency or incompetence to the retail customers, but they can't do that with the manufacturer's.  That's the real issue in a nutshell.

Jerry

Thanx Jerry! You said it way more professional than what I said, but we fully agree!

Ride safely,
Louis

[Cardboard Joe]

Been working in a motorcycle dealer long?
I won't argue with you. But, trust me, you're incorrect.

[skreminegul07]

My 2 cents.
The gasket program specifically stated the hours paid, which if I remember was just under 6 hours to pull cylinders for the base gaskets, head gaskets, new heads if applicable.  HD does pay over cost for the parts used.  However in the case of the motor replacements, these were sent out from the factory and the dealer made nothing on them.  Dealers weren't happy.
If you read early history of HD, you'll find that HD did not reinmburse any warranty work.  That was the cost of being an HD dealer.

[charger]

All I know about this is that my 08 CUSE3 has been in the dealers shop with the parts for 3 months. They are waiting for a "slow" time because the tech says HD does not give enough time to do the upgrade (He works for flat rate) and he is not willing to take a cut in pay. Only good thing so far is that I am getting "free" storage for part of our loooong winter. Just hope things "slow" down before riding season starts.

[ice6900]

from my personel experience, when i managed my domestic appliance repair shop we were always screwed by the manufactures on warrenty reimbursement hourly rates. Some you were paid a fixed rate per any job, others we could claim so many units depending on what the fault was. There was no chance to make any profit from warrenty work, so at the end of the day it was out of warrenty work that made up for the losses.

4 example: we could be quoted 20mins labour time to strip and replace a washing machine drum bearings, in a laboritory situation with all the required tools, equipment and spare parts laid  out before you start, after a few practise runs on a brand new product it could be done. But u were removing brand new unused parts from an unused machine, thats a totally different ball game from removing defect bearings from a used machine.

Extended warrenties were usually covered via an insurance company,  with these the repair rates were more generous and it was worth trying to sell the policies to keep the customer from defecting to the indy.

At the end of the day the idies came n went, even the local electricity company gave up repairing appliances, my business survived n prospered and with less competition we were able tell the big comglomerates, you pay us a fairer warrenty rate or we will terminate the deal. Market forces!

i could go on n on........

[cluckenbill]

not all of the 07's were part of this recall. your dealership is not out to GET YOU! they are telling the truth. your bikes was produced before this was a problem and you do not have the defective head gaskets and ACR's.

[RedDevil]

not all of the 07's were part of this recall. your dealership is not out to GET YOU! they are telling the truth. your bikes was produced before this was a problem and you do not have the defective head gaskets and ACR's.

Not sure how to take your answer on the 07's not being a part of the product enhancement, (it's not a recall).  Your right in that the 96 engines are not a part of it, but all 07 and some of the 08 110 engines were a part of either product enhancement 0905 or 0906.  FWIW I've enclosed the first page of the letter from the MoCo to the dealers concerning the upgrade.

   

[Gone Fishin']

not all of the 07's were part of this recall. your dealership is not out to GET YOU! they are telling the truth. your bikes was produced before this was a problem and you do not have the defective head gaskets and ACR's.

With all respect, I think you incorrect. All '07 110's were part of the campaign. There was no 110' engine produced earlier.

Ride safely,
Louis

[Hoist!]

With all respect, I think you incorrect. All '07 110's were part of the campaign. There was no 110' engine produced earlier.

Ride safely,
Louis

Louis, you're confused a lil here I think. Are you referring to model year '06 models built til June of '07? The 110 was introduced for the '07 model year CVO's, which came out in July '06. And yes, ALL '07 model year CVO's are included in the EP. And only the SEUC's got new heads out of the deal! Charlie's right on this one!

Hoist!