Regions Scramble to Warn Dealers

Various GM regions are scrambling to inform dealers of looming corporate-level audits.  For a recap, GM reactivated the General Motors Audit Services (GMAS) teams in September 2012 after a 13-year hiatus.  From what we’ve seen, these audits have been nothing less than brutal, often exceeding $80,000 to $120,000+.  Regional audits have been fair, for the most part.  These are not.

As we’ve reported, there seems to be no rhyme or reason behind the audits.  Even the regions are perplexed as to the risk factors that trigger these visits.  After all, if there were truly some red flag “indicators,” the regions would have been the first to know and would have acted on that basis.

Some have suggested GMAS is either “throwing darts at a map,” or going in because they wanted to “catch a ballgame,” “visit family,” or “go to a warmer climate.”  In either case, these corporate junkets have everyone on edge.

So concerned are GM regions that they’ve taken to conducting meetings to warn dealers of the potential chargebacks.  Dealers who didn’t make the meeting are being visited by their reps and required to sign a statement that they have been warned.  If the regions are nervous, you should be too.

The warnings consist of providing the “Top 5 Warranty Deviations” report along with the updated “Required Operating Procedures” bulletin (04-00-89-015E).  The “Top 5” are as follows:

1. No Customer Signature or Service Management Explanation

2. Add-on Not Pre-approved, No Date/Time of Approval

3. Improper Documentation for Other Labor Hours, Straight Time not Pre-approved

4. Job Card Required Information Missing or Incorrect, Overlapping Time Records

5. Missing Diagnostic Trouble Codes

As we’ve said before, this list is based on regional-level audits and isn’t entirely consistent with corporate-level audits, as they assume you are guilty.

Nonetheless, most corporate-level audits we’ve been involved with have made OLH a mainstay debit category, although they have applied “new” rules to claims before the changes were made official in the P&P or bulletins.

The Required Operating Procedures bulletin has undergone some warranty compliance changes, as has the Policy & Procedure Manual.  First of all, the bulletin was formerly 18-points and has now been condensed to 10-points.

One significant change relates to authorization for Other Labor Hours.  It is now a requirement that OLH approval includes the time of day the approval was initiated.  The P&P was updated in June to reflect this change, although it seems a bit redundant when the tech’s time record is right there too.

Another change to OLH requirements is: “Technician must detail failure and steps taken to facilitate repairs.  Vague comments such as ‘metal throughout’ are not acceptable.”

With all this in mind, you must view OLH approval as a two-part process.  The

first part is providing approval to proceed on a straight time basis.  This is when you would include the time of day, along with signature and date.  The second part would be determining how much time is being approved.

For example, a single statement of “OK 1.5 hours straight time” would be a clear indication the approval was after-the-fact since no one knows beforehand exactly how much straight time will be required.

As for a technician detailing the failure and steps taken to perform the repair, well, GM was a little “vague” themselves by saying “metal throughout” is not acceptable, yet it can be, based on the failure.

Certainly that reference is directly related to transmission recondition times.  While “metal throughout” might seem acceptable to the technician who performed the repair, or even most of us, GM auditors obviously can’t grasp the concept.

Since GM didn’t provide an example of what they might find acceptable, we solicited advice from an expert on transmission failures.

Our friend was quick to point out that many transmission recondition comments read something like this:

“3-5 reverse wave plate broken.  Metal throughout.  Disassemble and recondition transmission.”

Obviously that explanation would fall short of expectations.  Instead, technicians should list the failure and which components were affected by the failure.  If the filter is stopped completely by the component failure, that should be noted, as it could support the reasoning behind OLH.

Depending on the nature of the failure and how long the vehicle might have been driven can create cases where parts might become seized.

Technicians must list every component affected by the failure (i.e. planetary kit, clutches, etc.) along with how far they disassembled the transmission and what they found.

Cleaning and inspection of the valve body is required with any internal transmission failure, but techs must be specific as to why they did it and what they found in that process.

Our contact agreed the “normal” OLH for transmission recondition falls in the 1.5 – 2.0 hr. range, although some “extreme” cases may justify up to 5.0 hrs. but only with supporting comments.

Typically, this is because disassembly times can be more difficult if the vehicle was driven extensively after the damage occurred.  Once parts are cleaned and inspected, reassembly is fairly straightforward.

We’re certain it’d be worth your time to sit down with your transmission technicians and review this newsletter along with the relevant bulletins to make sure everyone is on the same page.

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