CONSULTANTS TO THE AFTERMARKET

Bill Wade

 

Blocking & Tackling XXIV November, 2009 Truck Parts & Service

There is No Such Thing as "Right" to Repair

By Bill Wade Wade&Partners

Right to Repair

How about a dispassionate look at the so called "right to repair" controversy? First, let’s distinguish between real rights and legislated entitlements or privileges.

Real rights are inalienable. They exist whether or not they are recognized and whether or not the ability or the will to defend them exists. If something must be provided to us at the expense of someone else, then it may be an entitlement, a privilege or an act of charity – but it is not a right.

While lawsuits have been filed for both sides of this issue, recently the courts and regulatory bodies have favored the "privilege" status. This is no accident.

For several decades, enforcement agencies have recognized that privileges are more easily controlled and regulated than rights. Furthermore, if they are the dispenser of a privilege, their powers and influence are enhanced. Illinois alone licenses everything from beauty shops to drug distributors, from interior designers to structural engineers.

But wait. Isn’t the heavy duty aftermarket nominally a free market structure? If it is, then the customer ... the truck operator ... should have a right to seek repair within certain boundaries. No one would argue that protecting his investment isn't his economic right.

Some OEMs seem to hold to the divine right theory of the aftermarket (i.e. we created the vehicle and therefore have the divine right to the revenue stream generated by its upkeep).

OE dealers say they should be part of that stream because of their substantial and restricted investment, not to mention their franchise agreement.

The independent aftermarket parts and service players claim the right of access to critical tech specs ... so that they can support the right of the truck owner to get maintenance services where he chooses. Very noble.

In summary, no info flow, no independents. No independence either because monopoly power accrues to the OEM and his dealer network. Monopoly power raises the costs for the customer of everyone: The truck owner. This sets up the battle for access to information, to parts, to specialty tools and to training.

To get the customer the best possible vehicle solution:

  • The OEM has invested (upfront) millions in vehicle design and development ... costs he theoretically recovers in the sale of the truck.
  • Component suppliers have invested (upfront) millions to provide the latest engineering ... costs they theoretically recover in the sale of parts to the truck assembler.
  • The OE dealer has invested (upfront) millions for facilities, tools and trained personnel to fulfill his franchise agreement ... costs he theoretically recovers in the sale and service of the truck.
  • The independent parts and service provider has no absolute requirement to invest in anything (for the most severe example, watch the brake and engine "specialists" working under a tarp lean-to outside the Port of Los Angeles).

Of course, this is not the real world. Independent shops often rival or surpass OE dealers in shop facilities and levels of service expertise, especially on a broader array of equipment and vehicles.

Component suppliers must recover some portion of their investment by selling into the independent segment. There are untold versions of a fleet market channel map.

The point is this: For anyone in this chain to claim a part of anyone else’s turf, there must be real economic benefit to the eventual common customer. Suppliers selling fleets direct isn’t illegal; it simply has not been in the end users’ best interests.

Profit margin is a product of risk, responsibility and relationships. Long term, profit follows satisfaction which follows service efficiency.

The software idea of open architecture needs to be introduced here: Invite the best service providers to delight the customer from any platform. Utilize the absolute best talents without purely artificial restrictions ... and God knows legislative intervention should be the last resort!

This is not a call for open season in truck repair ... hiding behind the claim of some right. Investment in training and tools are essential for anyone to be able to compete.

If independents can't price their products to support this necessary investment, they don’t belong. If they are willing to put the dollars in upfront to get the job done, they should be an OEM’s best friend.

Unless we all missed something, wouldn’t any OEM covet the position of being the most universally and inexpensively serviced truck on the road?

That's not a right. It's just plain right.

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