At the heart of the Steele Honda strike is how the dealership pays mechanics.
Teamsters Local Union 855 president Richard Gill said one of the key concerns behind the decision to strike was the employer’s desire to negotiate to a flat-rate pay system rather than the current hourly system.
Most automotive shops in St. John’s and the province have mechanics earning an hourly wage, said Gill. That means they are paid for the hours they work.
Gill said some shops have negotiations in which, during slow times of the year, the employer can send mechanics home an hour early a day to a maximum of five hours per week — something he said the union proposed to the employer, but he said the employer wanted a flat rate system instead.
Gill said with an hourly system there’s also the option of layoffs.
No jobs, no pay
In a flat rate system, there’s a set time during which it’s expected certain jobs will be completed. Mechanics get paid for the jobs they complete, and only for the allotted time standard.
For example, if a brake repair has a time standard of two and a half hours to complete and the technician finishes it in one hour, she is still paid for the two and a half hours.
However, if there is a lot of rust — a common problem in this province — the job could take much longer to complete, yet the mechanic is still paid only for the two and a half hours.
Gill contends there are problems with this system.
If there is plenty of work coming into a shop, mechanics might rush through jobs in an effort to earn a higher paycheque. If there is no work coming into the shop, mechanics do not get paid.
As well, on complicated jobs, mechanics might rush through the work in order to meet the allocated time even though the job requires more thought or time-consuming troubleshooting.
For the customer, it might result in a speedier turnaround time, but it could also mean subpar work.
Gill said other than warranty work, flat rates impact a customer’s experience on the retail side.
“What some businesses found – like Canadian Tire, for instance – they cut out flat rate altogether because they were losing their customer base because what was happening was their techs got into the up-sell (mode).
“So, if you brought your car in to get the front brakes checked, well, guess what? Your callipers are gone, your rotors are gone, the brake hoses are all gone — they’re rotted out — when, really, they’re up-selling because they’ve got to take that stuff off anyways to do the job, so let’s put new stuff on and charge them for it because we get a portion of that sale.
“So, are you really getting the best deal here? It’s not in the customer’s best interest to have your mechanic making money on a given task when, to me, it leads to abuse — and that’s what Canadian Tire actually found, and they cut that out years ago because they were losing their customer base.”
Gill said all Steele Honda employees, except the sales and management team which is not part of the union, are involved in the strike.
He said employees who aren’t mechanics and who were hired after 2018 could lose three sick days per year (reduced from eight to five), but most of the negotiations affect mechanics. Gill said that includes an employer proposed two-tier system which would mean new hires get an eight per cent reduction in pay.
“(Staff other than mechanics) felt if they didn’t support the mechanics this time, they’ll be the targets next time.”
Teamsters Local Union 855 represents many of the car dealers on Kenmount Road, including Hickman Motors, Cabot Ford, Capital Hyundai, Avalon Ford, Terra Nova Motors and Royal Garage.
The strike only affects Steele Honda, but Gill said if the union accepts what the company is proposing, then similar changes could be on the table for the other dealerships during the next round of negotiations.
Honda work sent to Mazda
Meanwhile, Steele Mazda is a non-unionized shop, and Gill said Honda employees are picketing at Mazda because the Honda work is now getting sent down to Mazda.
He said in the middle of negotiations about two months ago, work began to be shipped from Honda down to Mazda, such as repair work on used vehicles, as well as pre-delivery inspections.
“That’s mostly because (Honda doesn't) have enough room in their current dealership. They’ve overgrown that building and they need about six to eight bays more, so they actually hired eight technicians at Mazda and have been sending work down that way.
“We’re saying, you’ve got empty shops around town that you own. This is what City Honda did before Steele bought it, like when Ches Penney had it, and he needed to expand as well, he had four technicians working at a building right next to Mercedes Benz — it’s a pre-used building but there’s four bays there, so he had bargaining unit members go down there and set up shop there and (they) did repairs.
“They have the avenue to do that but they choose to say, ‘No, we’re going to do something different here,’ and we think they’re doing it because they pay them much less down to Mazda.”
The union is also seeking a two per cent wage increase, which Gill said is on par with what other dealers have given this year.
“That’s all we have on the table today. We’re not striking over wages — we’re striking because they’re looking for cuts.”
Steele Honda statement
Steele Honda issued a news release saying they are disappointed their unionized employees voted to initiate strike action, but the company fully respects the process and the rights of its unionized employees.
“Steele Honda is motivated by maintaining positive relationships with its employees, while delivering a quality, cost-effective service program with reasonable wait times for customers. That is what we are striving for.”
The news release said the dealership aims to minimize disruptions to customers and will reschedule service appointments. Customers can call 1-800-667-9900.
The release says the company will not comment on the details of the contract negotiations “as we will continue to work hard to reach an agreement.”
Twitter: @juanitamercer_
