Book rates are often set by the manufacturer. In theory, they have a mechanic do the job and time it. The real big problem is warranty work is only paid at a fraction of the book rate. So if a job normally takes three hours if you do it under warranty, you only get paid for two hours. It’s a massive disincentive for mechanics to work long-term for a brand-name dealership that sells new cars. They always run the risk of getting shafted by too much warranty work.
What's missing from the discussion is the opposite though. I worked at a dealership (albeit a long time ago) and many mechanics loved warranty work as some would be listed as a 2 hour job but would only take 1.25hr or whatever. So they were often able to put in 12 hours on a 10 hour shift for example.
>(albeit a long time ago)
This probably matters a lot depending on what 'long time ago' means.
Like when you hear old timers say "When I was a kid I bought X for Y" where Y is something like 10th the cost it is now. The push for profits has squeezed every section of the economy and it sounds like (dealer) mechanics are not escaping.
A long time ago was in 2002 or so. But warranty work still drove most of dealer profits back then, so I suspect there was still the same push.
Yeah, that applies to warranty and non-warranty - the mechanics always want to beat the book. And there are definitely some jobs that are well know to be winner, and others that are losers. And nobody wants to take the losers.
Never been a mechanic, but I'm guessing the losers go to the new guy.
Why do dealerships assume warranty risk instead of the manufacturer?
I'm pretty sure the manufacturer does pay for the warranty repair. But only at the fractional rate. The dealership effectively passes that loss onto its employees. Working for a small, independent shop can have better wage/salary, but often lacks benefits (health care in particular) and comes with all the usual downsides of a small business (one bad owner/manager can ruin the experience).
If they assess that a repair needs three hours, then only pay two hours of work if it's under warranty, I don't see how that doesn't mean that either they know that the book estimate is an overestimate and reimburse the correct amount, or the book estimate is correct and the dealership effectivley assumes 33% of the warranty risk because they only get reimbursed for 66% of the repair cost. (the third alternative is that the book estimate is underestimating, but that's basically the second case, but worse).
Neither of those cases looks like fair business dealings
It's effectively two different book rates, the warranty book assumes a new car. The non-warranty book assumes an older car. Older car = rust, rounded fasteners, and other things that add to the time.
Mechanic gets used to working at non-warranty rates, so any warranty works feels like being cheated.
Does it all balance out in the end? Maybe. But, that's not what mechanics "feel" like happens. And they're paid little enough (generally) that the two books annoys them. And the working conditions are bad enough (both physically, but also "mentally" - many shops are hostile workplaces, or close to it, with poor benefits, long-ish hours, etc). So, they have a lot to bitch about, generally.
To give them an incentive not to just rubber stamp every warranty claim.
There's some similarity here to US medical/dental insurance. Some work obviously needs to be done, but the entity that promised to pay for it won't. The system adapts (or fails).