AutoNation mines a scarce resource: service technicians

AutoNation Inc., the largest U.S. new-vehicle retailer, is joining other public dealership groups in redoubling its efforts to hire service technicians.

In most AutoNation markets, "every role in the service area" is short of technicians at all levels of experience, says Marc Cannon, the company's chief marketing officer. "Bottom line, we want to grow service," he says.

AutoNation said last week it seeks to add 500 technicians, for both its dealership service departments and its growing network of company-branded collision repair centers. The company did not say how many technicians it currently employs.

The group, based in Fort Lauderdale, Fla., operates 244 dealerships in the United States and sold 310,839 new vehicles in 2018, according to the latest Automotive News ranking of the 150 largest U.S. dealership groups.

The company is about three years into a $500 million brand extension program that includes its 83 collision centers, stand-alone used-car stores, and AutoNation-branded parts and accessories as well as finance and insurance products.

Adding body shops has created greater demand for service techs, Cannon says. AutoNation opened nine collision centers in 2018 and acquired two more, the company said in its annual report. Cannon told Automotive News the group plans to continue opening collision centers, but declined to specify a growth target.

Across the industry, auto retailers report that demand is up for technicians, citing a recovery in new-vehicle sales since the Great Recession, along with a major increase in recalls. Dealerships are under pressure to increase profits from fixed operations, to make up for flat or declining new-vehicle sales in recent years.

A high rate of attrition makes the technician shortage worse as older, experienced techs retire and an insufficient number of entry-level techs join the work force.

According to the National Automobile Dealers Association, U.S. technical colleges and training programs graduate about 37,000 service technicians each year. But retailers need about 76,000 new techs annually, NADA estimates, just to keep pace with job creation and retirements and resignations.

"There are a lot of issues," said Harry Hollenberg, managing director of the research and consulting firm Carlisle & Co., "in terms of not having enough technicians, in terms of retaining the techs we do have, in terms of the job satisfaction of existing techs across the industry."

A Carlisle survey last year of nearly 35,000 dealership service technicians in the United States and Canada found that just one in four techs expressed high overall satisfaction with the job, far below the levels of service managers (57 percent), parts managers (44 percent) and service advisers (42 percent).

"The industry understands it's got a problem," Hollenberg says. "Everybody has initiatives — the OEMs, the public dealer groups, NADA, the training schools — but for the most part, they are uncoordinated."

The industry isn't waiting for that situation to improve. In January, the NADA Foundation — which typically handles such matters as charitable contributions and emergency relief from natural disasters — launched its Workforce Initiative. The project aims to promote careers in the retail auto industry, and to provide a single source for would-be techs to identify available training courses.

The NADA Foundation is promoting the initiative at key events, including annual conferences for high school guidance counselors, at technical schools and community colleges, at military separation offices, and among other industry groups.

"It's an exciting time to be in the industry," says Larry Hourcle, an instructor at the NADA Academy in Tysons, Va. "There's been a huge cultural shift.

"We thought everybody had to go to college, but especially working for the franchised dealers, it's a great opportunity to make a lot of money," Hourcle says. "Maybe we didn't put enough emphasis on getting that word out."

Other major dealership groups are taking measures to recruit and retain service technicians. Asbury Automotive Group, which employs about 1,800 technicians at its 83 dealerships, is offering stock ownership incentives, paying more for senior techs' health insurance and providing locker rooms for techs. Asbury, of Duluth, Ga., ranks No. 7 on the Automotive News list of dealership groups, with 105,275 new-vehicle sales last year.

Group 1 Automotive, which employs nearly 3,000 technicians at its 183 dealerships, is adopting four-day work weeks at many of its stores to offer techs more consecutive days off. Group 1, of Houston, is the No. 4 dealership group, with sales of 170,517 new vehicles in 2018.

The four-day week gives dealerships flexibility to beef up technician coverage on Saturdays, when customers prefer to come in for service, said Pete DeLongchamps, Group 1 senior vice president of manufacturer relations, financial services and public affairs. "Saturday has become our most productive day of the week," he said.

For AutoNation and other big chains, a coast-to-coast footprint provides a competitive advantage over smaller operations, Cannon says. Service technicians can change jobs and move within the dealership network, he notes. AutoNation also offers incentives to employees to provide referrals of technicians who get hired, the company says.

Scott Arnold, AutoNation's executive vice president of customer care and brand extensions, says the company's plan to hire 500 techs "is a great opportunity for tech school grads, men, women, veterans, those just out of the military and anyone who is willing to invest in the training in order to make a career change."