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It’s been a while since I went off on a rant and I’m past due a belter. I was going to do another story but then thought better of it, so I’ll just press on. And the reson that this post has not been made in the general forums is because you should be the first to think this over.
I am led to believe that the expression “to keep the wolf from the door” which is often used in this trade, is derived from ancient peasants starving and, when there were wolfs about, they’d prey on the weak, infirm and starving. Therefore, to keep the wolf from the door you had to ensure that there was food on the table.
This of course all carries to modern day if a little less gory but the premise is much the same.
With recent events that are unfolding it would appear that 2006 is going to go down as a pivotal one in this industry within the UK, I certainly hope it does.
We’re launching ISE with repair rates that surpass any out there today I believe as we realise that to survive and flourish the independents need revenues, but not just a quick fix. We need a long term cure, not a band-aid. So, whilst this may take some time to come into effect and to do the intended job we have to make the most of every opportunity presented to us to ensure that we’re all around to ensure that we do reap the benefits.
Case in point… Expert Appliance Care.
EAC has gone to the wall despite having huge reserves to draw upon and the cushion of a large national company at it’s back. Even though the charges were what we would likely consider to be high.
You have to wonder why that is don’t you?
Well, I could go on all night disecting it and picking the bones but there seems little point and, anyway, we can all do that in full public view if we so wish. But the important bits are that they over-burdened themselves with a management structure and costs that just could not be carried or passed on, the sword many companies fall on. Keep it lean, keep it simple.
Much of this I expect was administration costs, which on the scale of a company such as EAC must have been simply enormous. So we came up with what I sincerely hope is a cure for that as well, for us, which I spoke about at the weekend’s meeting, ACH (Advanced Call Handling).
But then, since EAC came into being from the old Iceland Group (of which it remained a part) the business has changed as we well and all know, sadly many of these companies have not realised or changed to compensate. Often, like EAC, they take on extra work thinking in some perverse way that more work means more profit, this proves again that it does not. But we all know that don’t we?
To paraphrase John Hopwood, often a company is defined by what it does not do, not what it does. In our case that could just as easily read, a company survives very often not by what it does, but by what it does not do. I don’t see that as too much of a stretch and I don’t think that many will disagree with the sentiment.
So, in effect this post says a lot, without saying a lot but the bottom line is that if you are offered work in the fallout of EAC going t*tsup.com then please, please think about the consequences of your decision. Think about the implications on your time and that of your staff should you have any and consider that you may well be better off actually passing on the work.
Unless…
The pay is right!
Yes, as ever we’re all mercenary really, I mean we’re in business, we have to be… but not to the point of stupidity I hope.
I’ve already decided what my rate is going to be across the board for refrigeration on volume products and it sure as hell ain’t gonna be £40! In fact I do some work for ISDAL for GEC and that’s a pain in the rear and it’s costing me money at £50 a call! A lesson learnt.
But that’s the thing, I learnt. I will not make the same mistake twice so next time it will be a lot more than £50 and then maybe for once the old “swings and roundabouts” nonsense will work in my favour just for a change.
And remember, the manufacturers are in a bit of a pickle here, they don’t have cover and this is one of the best chances you’ll ever have to up the rates significantly. There’s no choice.
Maybe the wolf won’t be at the door anytime soon as at least this time we have a choice.
K.
Re: The Big Bad Wolf
am i waiting for the call from Smeg to take back the refrigeration work they took from us a few years back? If that happens I am not going to do it for £34.
Re: The Big Bad Wolf
Indeed Mark, I also have a long memory and I won’t forget the treatment from Smeg as well as a few others that swiped the work for what looked like the easy option at the time.
Who’s laughing now I wonder.
K.
Re: The Big Bad Wolf
If anyone thinks they will benefit from the short term fall-out, they need to get real.
Further to Ken’s post regards the support from on high, they didn’t get that luxury in the end, they were left to their own destiny, with no support at all. The demise has been going on for some time.
For a start, EAC need to sell the business, if that is possible. To do that they will need a healthy “Order Book”. Therefore, any work that may be in the offing, might not stay. A management buy out for example would quickly claw back the work. Strategically, they will endeavour to hold onto any existing contracts, or at least start making approaches and reassurances.
Problem is, the largest part of their workload was I/G or insurance work, and theer is no money in that. There is little these days in chargeable on refrigeration, (when did anyone last fit a VT9), and let’s face it, they were no good at selling themselves to the general public.
I’ve had it suggested to me today by LEC that I might be getting a lot more work soon. Then there is Servevast (Smeg), British Gas, and what about MFI?
MFI don’t want to think about it. They don’t have direct service with the skills, and some of the agents are not geared up for refrigeration. LEC, (who now pay £40 per call by the way) are similar. Some of their repairers don’t want to know about Medical products, and Glen Dimplex the parent company of Lec, don’t quite have the infrastructure to hande the work themselves. Lec agents needn’t get excited either, as Glen Dimplex are starting a training programme, and will no doubt start doing doors and cosmetic bits themselves.
To fill the gap, I can see that possibly one of the above could get involved. However, MFI are in trouble, Glen Dimplex backed out, and forget Brit Gas, they are looking to hive it all off.
I wonder if there is anything in this to get excited about, somehow I don’t think so.
Alex
Re: The Big Bad Wolf
Alex wrote:If anyone thinks they will benefit from the short term fall-out, they need to get real.
Indeed, this is going to take time to sort out.
Alex wrote:I wonder if there is anything in this to get excited about, somehow I don’t think so.
I dunno Alex, if nothing else perhaps a few lessons will be learnt. 😉
K.
Re: The Big Bad Wolf
At the very least it may make the big guns stop and think about the risk of putting all their eggs in one basket.
If a company the size of EAC cant make the job pay (and let’s face it they were getting better rates than any of us) then how the hell are we supposed too.
We are already working in the background trying to make the industry wake up to the skills shortage.
Another thing to think about is that even if EAC are bought out at the eleventh hour it would have to be by a manufacturer as they would be the only ones with enough money to do it and what manufacturer would want their products serviced by another manufacturer ?
We may or may not get a little extra work out of this but the most important thing of all is that it has happened and may start to get the message across that the service side of this trade is in danger of implodeing.
The only alternative would be for every repair to be a swap out and believe it or not delivery men work out more expensive than engineers.
Sean
Re: The Big Bad Wolf
Del wrote:If a company the size of EAC cant make the job pay (and let’s face it they were getting better rates than any of us) then how the hell are we supposed too.
Quick fag packet calculation…
With a workforce of ~150-160 they could accomodate about 288,000 calls per year.
Allow 38,000 to give a round figure and allow for recalls etc. leaving 250,000 roughly.
With a two million pounds per year loss that equates to the work being under-funded by £8 per call just to break even and that’s being kind. I should expect that it was really under-funded by about £15-20 per call to allow for recalls and dead stock as well taking out training and exceptionals.
Assuming an average labour rate of ~£45-50 that puts the real price, to break even, at about £60-70 which is exactly where I end up pricing it for my own business but I can shave a bit on being more efficient to make it pay at £70 I think, although I would like a safety margin in there.
So here’s the message, don’t under-price yourself if you get asked to do this sort of work. Think long and hard before you agree to anything.
K.
Re: The Big Bad Wolf
I am told that EAC is offering its eng stock and vans at a knock down price at the end of the month? are they going to be offered work direct as well, if so they will not be offered good terms.
Kirk
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