Thank you Greg Weld ! Venting time.

[79 Camaro]

Afternoon all,

I just read thru the whole thread. It really sucks that some ones dream car project goes sideways very badly. I worked in the custom machinery business for over 36 years. Prices started at 300K. We used joke that when a customer wanted an "identical" machine to the last the only thing that was identical was the paint color. I worked as a tech for 10 years and sales for 26 years.

I can't afford a custom car build. Just don't have the cash. I do about 75% of the work myself. The stuff I farm out I always get it in writing what are the expectations. Protects me and the supplier.

Two things that were built into the machine prices. Warranty fund and "Goodwill" fund. Two separate accounts. Warranty was just that. It covered unexpected parts failures and such. The Goodwill fund was used when a customer had an issue, not really our fault but a good customer that was important to satisfy.

One of the things that we made clear to the customer any time they wanted to either supply parts or use a part not standard to us there would be no warranty and integrating their part is "time and material" only. No fixed price on that part integration. We would never warranty new or used parts supplied to our customer by a third party.

All the cool parts you see advertised on-line and in the magazines are a bit scary to me. Might be a great part but the supplier may be out of business tomorrow and then what do you do?

Maybe the time is past when you can set down again with the builder and come to a better conclusion. But any time the attorneys get involved it is going to get very messy. Your documentation will need to be spot on.

I see all these very cool cars at shows and on TV and assume they run great right out of the box.

Good luck.

[Blake Foster]

Originally Posted by 79 Camaro

Afternoon all,


Two things that were built into the machine prices. Warranty fund and "Goodwill" fund. Two separate accounts. Warranty was just that. It covered unexpected parts failures and such. The Goodwill fund was used when a customer had an issue, not really our fault but a good customer that was important to satisfy.

just so i understand the machine was say 250,000.00 and then you charged the customer lets say another 50,000.00 for warranty and goodwill? what if there was no warranty or goodwill needed? did the customer get his 50,000 premium back? or was that just extra profit at the end of the day?

[dhutton]

Originally Posted by Blake Foster

just so i understand the machine was say 250,000.00 and then you charged the customer lets say another 50,000.00 for warranty and goodwill? what if there was no warranty or goodwill needed? did the customer get his 50,000 premium back? or was that just extra profit at the end of the day?

Warranty reserves are normally based on historical warranty costs. At least that is my experience. It is normally taken as a percentage of product cost. If you are delivering quality products should not be more than a few percent. Your example is quite extreme...

Don

[randy]

Man I was too busy hitting cones to check out all of the nice cars. I need to start putting names with cars lol

Originally Posted by DOOM

I have one last thought, comment on this subject before I have Jody close it up . As I followed GW on his journey to GOOD GUY'S TEXAS, Seeing GW enjoy the heck out of his truck was awesome to watch as the trip went along. As I watched this I couldn't help to think about all the jerkoff's that screwed this guy around and all they gave up by not taking care of this man. He finally has a shop that got it right for him and I believe they now have a customer for life plus all the referrals that this guy is going to send them. It's a win win for the shop . In the beginning when I started my shop I was going gang busters so it was easy to think who gives a **** if a guy's not happy there's going to be another customer right behind him. Well after about a year or so business started dropping off . And it wasn't hard to figure out why. It took me a long time to bounce back . I still see some of those customers who I will never get back. They go to other shops that take care of them. Plus you don't facture in the people you lost because bad word of mouth goes around a lot faster than good! When this happens it humbles you in a hurry trust me ! I did a lot of soul searching during that time and changed my whole perspective around on how I needed to do business. I was fortunate to be able to save my business but it doesn't always work that way. So I say go right ahead keep thinking your THE guy your shop is full of cars . Keep screwing people over and it won't be long before you figure it out like I did!!!

[Blake Foster]

Originally Posted by dhutton

Warranty reserves are normally based on historical warranty costs. At least that is my experience. It is normally taken as a percentage of product cost. If you are delivering quality products should not be more than a few percent. Your example is quite extreme...

Don

i am sure it was extreme, but just trying to understand the concept. if it is COG that is totally different than the way i read the original statement. if it is cog then. you (the manufacturer builder) are just covering off the warranty. It sounded like the warranty and goodwill were being added to the sell price and there for the customer was paying for it over and above the true selling price of the WhatChamacallit. which i guess in all reality is what most retailers are doing now anyway buy the Extended warranty deal.

[DOOM]

Just so everyone understands . All my issues with BBT are workmanship related . I have a hood hitting the core support ,left front tire hitting the fender windows that don't go up and seal correctly, a ECM that will take a act of god to get out if it ever goes bad I wanted it relocated. That's the short list. I understand he just installs the parts he don't manufacture them I don't hold him responsible for any of that. My engine is a pile of SH!T ! It was his engine builder who built the engine . And I personally don't think he did anything wrong. From the time my car went to Columbus then to SEMA it was never tuned correctly . I hold him and the two ''TUNERS'' responsible for what happen to my engine . 44 DEGRESSS ADVANCE TIMING WTF COULD HAPPEN THERE ON A FRESCH ENGINE!!!!!!!!!!!!!! So that's where I'm coming from I don't expect a lifetime warranty with my car just fix the issues from day one.

[GregWeld]

Totally agree Mario. It’s his job to make things fit correctly. That’s build quality. Whom ever tuned the engine last is the one that’s responsible for timing. That’s one in the very first things that should have been checked before anything. A:F ratios so they’re not too fat and not too lean before you ever fire it off. Don’t know who worked on it but that’s super basic stuff anyone should have done.

[79 Camaro]

The warranty and goodwill funds were a small percentage of every machine price build up. 2-3% typically. No we didn't give any rebates back to the customer. We adjusted the percentage each year depending on the previous year costs and forecast for the new year.

One thing we did do though is each project was judged in regards to risk and complexity. The higher the risk and complexity the higher the assigned margin.

On rush deliveries the sales department could not make a commitment to the customer without the approval from all the other departments that might be affected by the accelerated schedule.

I totally agree there is no excuse for poor workmanship. I would not accept poor workmanship at any level of cost.

A few of things we did that really helped with customer satisfaction.

1. Design reviews: Prior to purchase. At the time of purchase to reconfirm specs. Design review at completion of the mechanical and electrical design.
Sounds like a lot time spent on design reviews but it really only took a few hours per stage. It was up to the customer to attend in person or via WebEx. We did everything in Solid Works 3D so the customer really could see what they were getting and approved of what was being designed.

2. A project manager was assigned to each machine after the sale.They would typically look after 10-15 machines at any one time. They were the main link to the customer after the sale. Any problems or changes to project scope were looked after by the project manager. The project manager was responsible for the machine (or could be a car) until the customer accepted the machine. With the level of costs that the cars being built at today I think a project manager could a life saver.

3. As said above these are really one off custom cars. Test and debug is critical. It was the same for our machines. So once the machines were completed by the build team and prior to customer inspection, at team of 4 employees were selected. One mechanical engineer, one electrical engineer, one service tech and a different project manager to run a "mock" customer inspection. They were instructed to be highly critical. Any faults were documented and corrected.

I don't know if the above is any help. Just food for thought for customers and builders.

Again I am sorry your project went so wrong.

[DOOM]

Originally Posted by 79 Camaro

The warranty and goodwill funds were a small percentage of every machine price build up. 2-3% typically. No we didn't give any rebates back to the customer. We adjusted the percentage each year depending on the previous year costs and forecast for the new year.

One thing we did do though is each project was judged in regards to risk and complexity. The higher the risk and complexity the higher the assigned margin.

On rush deliveries the sales department could not make a commitment to the customer without the approval from all the other departments that might be affected by the accelerated schedule.

I totally agree there is no excuse for poor workmanship. I would not accept poor workmanship at any level of cost.

A few of things we did that really helped with customer satisfaction.

1. Design reviews: Prior to purchase. At the time of purchase to reconfirm specs. Design review at completion of the mechanical and electrical design.
Sounds like a lot time spent on design reviews but it really only took a few hours per stage. It was up to the customer to attend in person or via WebEx. We did everything in Solid Works 3D so the customer really could see what they were getting and approved of what was being designed.

2. A project manager was assigned to each machine after the sale.They would typically look after 10-15 machines at any one time. They were the main link to the customer after the sale. Any problems or changes to project scope were looked after by the project manager. The project manager was responsible for the machine (or could be a car) until the customer accepted the machine. With the level of costs that the cars being built at today I think a project manager could a life saver.

3. As said above these are really one off custom cars. Test and debug is critical. It was the same for our machines. So once the machines were completed by the build team and prior to customer inspection, at team of 4 employees were selected. One mechanical engineer, one electrical engineer, one service tech and a different project manager to run a "mock" customer inspection. They were instructed to be highly critical. Any faults were documented and corrected.

I don't know if the above is any help. Just food for thought for customers and builders.

Again I am sorry your project went so wrong.

I like this ! I'm going to do so much different the next go around . As my wife said don't blame anyone but myself for what happen . That's what you get for being nice . And it's funny I always say the azzhole and bastards always come out on top . Being nice doesn't work ask GW!

[79 Camaro]

Ok so after this I will shut up.

One thing I didn't include.

We rated projects A, B, C, D and E. The ratings helped determine risk.

"A" projects. No risk to us or the customer. Basically the same as other projects. Reduced margins because they could be turned out quickly with little chance of complications.

"B" projects. Low risk. Typically minor changes to a previous build. Sometimes a new customer. Standard margins.

"C" projects. Custom builds with known components but per customer specs required additional design time along with increased debug time. Slightly higher margin in the price build up. About 2-3%.

"D" projects. Here's where it get's a bit intense and really needs close review by the builder and the customer. Many new components. Many new design ideas. Extended delivery times based on new design and debug time. Again increased margins to cover (hopefully) the unknowns.

"E" projects. We just say no in the best possible way. If the customer offers more money but the project scope doesn't change again the answer is no. I can't stress that enough, don't be tempted with more money it could kill your business and even worse create a very unhappy customer.

On all C and D projects we had staff meetings twice a week if needed to review those projects. That meeting included engineering, production and service. As sales people we were expected to bring the best information to the meeting. Customers were invited to attend to help determine the best solution. So of the best projects were when the customer was very engaged.

I hope I don't come off a as a "I know everything" about machine building. Just want to pass on what has worked for me in the past.

Again I hope this helps bot the customer and the builder.