Episode 262 - When Generations Collide - Growing an Auto Shop with Family Values With Matt Clarke

0:02Hey folks, David here, and I'd like to thank you for joining us for the Changing the Industry podcast. Lucas and I started this podcast with the goal of capturing the frank and open conversations you typically have at industry events. Those conversations cover the challenges we face in our business and lives, as well as difficult repairs, new products and services, and everything in between.

0:26We hoped that these recordings would spur our listeners to enact the change they'd like to see in their own lives and businesses. That's also why we've partnered with the Institute for Automotive Business Excellence. My first management class was with Cecil Bullard, and his genuine passion for helping others in an honest and ethical manner permeates his entire organization. And if you need some of the Institute's help, they have a special offer for our listeners.

1:00Click the link in the show notes and get signed up for a free business analysis. They'll go over your current situation and give you advice on your next steps. And they have everything from free resources and online classes to peer groups, one-on-one coaching, and specific help for MSOs. So don't miss out on this great offer. Click the link in the show notes.

1:26And now on to the podcast. You made a video about it? Yeah, I made a video about it, and I was just saying like, hey, if you want to go to trade shows, right, like there— hey, there's things that need to be improved about trade shows, but trade shows are really expensive. And Sherry came in and she like highlighted— she's like, look, a Donut at Vision is $6 per donut.

1:49The box lunches are $30 and $40 apiece. A cup of coffee is $7, right? Like, that's what it— and, and, you know, you hear that and you think, that's asinine, why would I ever do that? I wouldn't pay that for that. But then you, you get into the trade show space and you're like, holy crap, this is ridiculous, right? Because most of those convention centers are union-driven They're ran by organizations which are, you know, they're buying the product from another— Lucas, Lucas, Lucas, surely you're not saying that because these people are unionized, it's driving up the cost for everybody else.

2:24I would not say that. You're not saying that. They need to be paid a fair wage, Lucas. They're moving product from one place to another. Now, if they were non-union, they'd be making, I don't know, $3 an hour plus tips. But because they're union, they're making $35 an hour. Um, so let me just put this out there. Let me just put this out there.

2:46I don't make $35 an hour. Maybe I should unionize. Okay. All right. It's not about the money from what I can tell. You think I could make more money if I unionized? Um, okay. So it's not about the money. All right. Here's the deal is I made a video a while back and it did some kind of crazy thing and all these people commented on it, right?

3:05It's probably got like 5 or 6,000 comments at this point. And I said on Facebook, on Instagram, where is this video? Or what? TikTok, Facebook, YouTube. And so I should probably unblock you. I've got you blocked everywhere. I can only look at your face so many times. I mean, me too, fam, me too. I get up and whatever, whatever, you don't look in the mirror and I'm like, oh, this is depressing still.

3:34Block. Just put a piece of paper over that. Hey, have you seen the, have you seen the, the, the Instagram trend where people like, hey dad, what, what did, what were you like in the '90s? And then it's usually celebrities and then they show a bunch of pictures of them where they were younger in their, in the '90s. Well, you haven't seen that?

3:57No, it is freaking, it's stupid is what it is. But then started, people started taking themselves, like there was older Asian man looked into the, you know, was looking at the camera. I was like, dad, what were you like in the '90s? And then he flashed a bunch of pictures of Brad Pitt in the '90s. That is hilarious. Back to your union comment, right?

4:21I'm not making any comments. I'm all for the unions. Power to the people. How much pre-workout did you consume this morning? All these evil employers trying to gouge the poor workers. Well, hold up though. Hold up. Okay. So all these people work for unions and they commented because my video said, hey, the best way to ruin a good employee is to let them see you tolerating and accepting bad performance from a bad employee, right?

4:52That's all it said. Super short. And there are thousands of comments about how unions have destroyed the American workforce. And they said, every single one of them said, what you described is a union. And all these other people, all these technicians who have been going around saying, we need unions, we need unions, we need unions, they get in there. What technician is saying that?

5:16They get in there and they start arguing about it, right? And they go down this list and all the people from the unions are like, right, but what you don't understand is, is there's 2 or 3 people working because they can't fire anybody. The rest sit on their ass all day long and they aren't contributing and they aren't doing anything. They're just getting a big paycheck.

5:33And so it takes more people to accomplish the same amount of work that it does everywhere else. And so it drives the cost of the product up and it causes this entire like toxic work environment that we didn't think we'd be subjected to because it was a union. A union is worse. And people were trying like crazy to get out of the unions, but they— what did they do?

5:55Their spending went up with their paycheck, and now they can't leave because they can't work anywhere else. But they're the ones doing all the work, and they feel bad about it. It's, it's very interesting. You should go check it out. Matt, good morning. How are you, sir? Good morning. Yeah, this is— well, this is it. This is the podcast. I just jumped in the middle of a Great conversation here, but we perform.

6:16Now I know why you guys are— you guys are podcasters. I mean, you guys can any topic, you know, I'm sure. That's it. Wide range. Give David any ideas, man. Please don't give him any ideas. Um, we had Kathleen Callahan sends me a message. Okay, do you know who Kathleen is? I do not. Okay, so she's big with ACA and she sends me a message and she said, my daughter is going to be on your show at Vision.

6:40But she can be very spicy and you need to be careful because she can be very wide open. I made the mistake of saying that to David and this poor young lady sat across the table from us slack-jawed going, I can't believe he said that. I can't believe he said that. She sent us 3 hours. No, no, no, it wasn't that long.

6:59These were children sitting across from me. I had to learn them a thing or two. This is how the world works. This is why they went to training. David was there. He trained them all right. More like corrupted them, but still, there were plenty corrupted when they showed up, let me tell you. Matt, tell us exactly who you are and tell us a little bit about how we ended up here.

7:25Tell us about how you got started in the automotive industry. Sure. Well, my name is Matt Clark, Clark Automotive. Father started the business in 1978. And as a family business, I grew up working in the business, around the business, and quickly realized that a college classroom with AC would be much better than working on cars in hot, humid Florida. So I actually went off to college to get out of this industry and get away from the business.

7:57It drew you back in is what you're telling me? It did in unique ways. So, I graduated during that Great Recession and just working two part-time jobs. And one of the things I did in college I really enjoyed was small business consulting. And so, I said, "Hey, why can't I take what I've learned and see if I can't apply it?" You know, I had entrepreneurial spirit, wanted to do something small business for myself.

8:28And so, it just kind of fostered. From there coming back into the business rather than working on cars, it was more of how can we, you know, make the business better, run better, right? Run it like a business, right? For sure. Yeah. I, you know, that's something that, that I believe that like the world has this weird roadmap laid out in front of you and you think you're going one direction and it moves you back into the map no matter what you do.

8:55You know, I kind of had a similar experience, which was my family owned a business, not an auto repair shop.. And through the tactics and tools that I've learned in auto repair and going to business management classes, things like that, when the need arose to go into that family business and begin to do something different because it's never been ran like a business, I at least had a little bit of knowledge to guide them and point them in a direction.

9:19And so that's been, that's been a really pivotal thing for us as a family. Tell us what, what did you change when you went into your dad's business and was he open to this? Because I, that, that's the big thing that I'm really curious about right now. Well, at the beginning, he was definitely interested and open. He always has been. Now he's got his strong points and positions that he doesn't want to waver from.

9:46I always say it's planting a seed and letting it also kind of become his nature or his idea. And he nurtures it and grows it. And so, uh, you know, it's— it obviously always working with a family business, there is some of that struggle, right? But with working through all that, he's my best, uh, best friend. He's my number one guy in my corner.

10:14And so I think he feels the same mutual ass, uh, you know, respect between each other for sure. That's really cool. So give us a little bit of a background on where we started, right? Because One of the things that we talk to a lot of shop owners about is they get into business and, and they're over here, they're working away. They don't really know where to start when it comes time to fix that.

10:36When you went into the business, what were the big things you found and, and what were you working on? Yeah, I mean, I think we had to look at profit of, of things. I think we were really focused on car count and numbers, rather than, you know, not that we weren't quality, but improving that quality of that even in the car of a basic oil service that we were going to give the highest level quality that we could.

11:06And that didn't mean this great low entry-level price to get in for an oil service, but to bring more value to that. And it benefited the customers. If it didn't benefit the customer, we would have never pivoted to that. But, you know, I think that was the biggest thing is going ahead and getting a hold of this car count and say, it's a little crazy, it's a little much.

11:30We can slow down and we can give a better quality of service and detail of what the vehicle needs by lowering car count and focusing on that. Well, so let me ask you this. There's often mentalities, right? From what I found talking to shop owners, they all have a mentality of why they do the things that they do now. When you're talking about a son to a father, it can blur that a little bit, right?

11:55It can be hard to see and you're just like, Dad says this is the way we've always done it. So I mean, like, surely he knows more than I do, right? David talks all the time. He's like, one day I woke up and realized my parents were idiots. Maybe he didn't say exactly that. You know, here's the thing is like, I think that we hold our parents at a high esteem and so it can blur those lines a little bit.

12:16But I talk to a lot of shop owners and they, they have all these reasons for believing that they need that high of a car count. What did you find his reason was? Hmm. I, in some ways, he, he may have just loved the, the grind. I don't, I don't think a little bit of the chaos for sure. And maybe he was controlling that chaos and the leader of the chaos.

12:42But just being busy is what he thought was going to be the success to make this thing go. But also it's a generational thing. I mean, I don't know. I wasn't around the industry when he was in it in the '70s and the '80s. And it may have been different. It may have been that that was the pursuit. And then obviously it pivoted at some point.

13:08You know, so it may have been what he knew and couldn't see the transition of what the industry was pivoting towards, um, even though he was always forward-thinking, you know, putting me in the position I did that I was in. Um, he was open to the concepts for sure, for sure. Well, and I mean, I think that's a big issue is that, that just like, you know, and you have to think, right, when they were coming up, we didn't have these resources.

13:34You know, I, I talk to Carm all the time and I talk to all these other instructors all the time and they're like, this is ridiculous because all of this data is available, right? Like you can go out and find this information now. Well, when they were coming up and learning how to run a business, none of that was out there. They didn't understand the liabilities.

13:51They didn't understand what they could do and how they could make more money and how they could make the business more profitable and these ideas. And there were consultants that went around and did that, right? And, and so it, it was, the problem was you'd spend a week, 2 weeks with that consultant, and they really could only teach you so much in that time.

14:09You know, when I hired Rick White as my first coach, I mean, dude, he sat down and month after month after month, he's like, okay, I'm going to teach you about this number, right? And I feel so bad for the dude. I think that's why he's kind of balding now, is because it was like, this kid is so stupid, he just can't get this number.

14:25Like, I've been over this 50 times. Once it finally clicked, it worked, right? And I'm moving in a better direction now. But that data wasn't there for them. They didn't have that resource or that person there to help them learn that. And then when it shifted, right, like when you came in, that was kind of part of what was available. You had a college education, you saw some different things.

14:45What were the first steps you took? Yeah, I think, um, what you alluded to, you got in with a coach, and, uh, that wasn't really me as much as my father knew that I needed to, to learn more. There was a lot for me still to learn. College helpful, but, you know, having somebody in this industry who'd been in this industry, been successful at it.

15:07And so getting part of a, a 20s group, having a coach and learning under all these other successful people that are running an automotive repair business, uh, was huge, a big asset to, to get me started, to understand going into these other shops how and why they were successful. Not just profitability-wise, but, you know, from the high standards of customer service they were providing to their customers, to the relationship and the driving of a good workforce, their employees that wanted to show up and work every day, not just for money, but for higher purposes.

15:49So all that really got me started is him getting me into these classes or going to conventions, uh, you know, WorldPAC, STX, and those things were highly impactful for me getting started. Was there a class that stood out? Was there something in that journey? I, I know, you know, I talk all the time about like my journey and my story of how we got here, and, and there was an epiphany, right?

16:15At one moment there was an epiphany. And, you know, when you came in, we're talking about all this training that's going on and how people are frustrated that the training isn't as impactful as it once was. And, you know, some of the folks that were commenting were saying like, hey, you can't expect, especially when it comes to management training, for it to continue to be that impactful forever.

16:34You're not going to continue to get epiphanies every class you go to because much of that content is the same and much of how you run a business, regardless of what model you follow, is very similar from model to model. Was there an epiphany for you at any point that it was like whoa, hold on, stop the presses, let's do something different here.

16:53Um, I think I was probably overwhelmed. Uh, I, I don't know if it was an epiphany, but an overwhelming— where I'm like, wow, there's, there's a lot more here. Um, and that might have been my first or second class. Like you alluded to, we were going over KPIs, and I'm like, trying to understand it. And it— they— I literally had to go through it a couple times to grasp it, to understand it.

17:20So I think maybe the KPIs were an epiphany moment, like, okay, wow, I really need to be solid in understanding these and follow them, uh, to be able to make the pivot and the shift. As well as nobody was the— nobody was at the wheel for those KPI numbers and understanding them. And so, uh, that could have been the epiphany moment, is just really grasping those.

17:45Yeah, for sure. Kind of like we're, we're this big ship in the ocean and we don't really have any direction. We're doing the thing, but we're not making the momentum that we could make. We're not making the headway that we could make if we had a little bit of data and used the numbers to get there, right? Yeah, absolutely. So tell us a little bit about the business now.

18:02How many bays do we have? How many technicians do we have? Yep, so we've got, uh, 5 technicians, 1 apprentice. And so we've got 8 bays and business is just continuing to grow. Lord willing, we'll be expanding a little bit, a little growth. But yeah, very cool. So how much revenue do we do a year right now, or however you want to look at it, a month?

18:28Like, I think that folks really love hearing back. You don't have to use exact numbers and share stuff you don't want to share, but how much revenue does the business do right now? Yeah, annually we're, we're over $2 million, and so the goal would be $2.2, $2.3 this year. And, um, yeah, it's slow, slowly, steadily been going up, but, um, as we know, the cost of everything as well has been going, so driving those numbers as well.

18:59So for sure, absolutely. And maintaining that gross profit is so important to keep the business healthy. Because I've seen a lot of shops recently that I've talked to who said, that seems really expensive, and they're not thinking about the fact that the part cost went up or that whatever their subletting went up. And so they start lowering their price. And so I've seen shops that instead of their gross profit going up with the pricing that we've seen increasing, their gross profit was going down.

19:26And I'm like, you cannot afford to do that right now. That's bad news bears, you know. Yeah, absolutely. So when we talk about expanding, is there a reason you're not going into multiple shops? Is there a reason that you're staying with one shop and just expanding it? Yeah, I think, um, I don't think we've perfected our craft. Um, I think there are certain individuals that are really— they have the aspiration to go and go to multiple store locations, and they've got good systems and processes to be able to make that transition and make that happen.

20:02Um, I think we're still kind of refining ourselves here, in my opinion. And so, um, I don't know, at one point I did think, well, hey, we could, we could have two locations, we could expand. Um, and now I just feel like, well, we haven't hit our full capacity here yet. Um, and so I don't know, there's a lot already on my plates with one location.

20:30I don't know if I'm a guy to have two locations. Or also, the other thing is we know you've got to have really good people that can run both locations. You're not going to be— it's just physically incapable of being both places. You're not going to be. So you need good managers, service managers running the place. Absolutely. I agree with you 100%, and that's kind of one of the things that's held me back from even considering that, because at some point or another, like, I was considering going to to multiple locations.

21:01And then I said, you know what, this is not for me. It's not what I want. I don't want the workload. I don't want the stress. I don't want all the other things. The money is not really worth it for me. Yes, I know I could make more money if I had 5 stores, no doubt. That's not really what I want. And I'm going to tell you, I am, I am not a wise man, but I'm wise enough to look around and say, those guys running 5 and 10 shop operations, I know they're smarter than me.

21:29There's no doubt about it. I know they're more capable than me, and I am not trying to like push my trajectory that hard to get there. Kind of like David, I'm on the— I'm on the decline at this point. Yeah, I mean, you just got to accept sometimes like, you know, what our capabilities are, you know. Maybe it's not in the cards for us to have multiple shops.

21:54And so, so be it. You're right. I mean, I'm not, uh, totally— it's all about the money, you know. And I don't know if I've got all the brains and the smarts to make all this happen all the time. For sure, for sure. I'm with you. So let me ask you this. It sounds like you, you've been working with coaching companies. Do you have a coach now?

22:11Yeah, so we're working with, uh, Elite now. And, um, yeah, very happy with them. And, uh, It's always just good to be able to sit down with a mentor or coach weekly and talk about certain struggles or find a new avenue that maybe I'm not thinking of, to have that outside perspective, which is helpful as my dad is less and less, really isn't part of the business day to day.

22:41And so in some ways he's losing the realities of what things are taking. Nowadays to run. So anyway, it's great to have that in your back pocket to be able to meet weekly with these guys. What's the most he ever did? Sorry, say that again. What's the most he ever did? A year? I think he was in the one, a little over a million.

23:08Now he was with me as we grew it up to, you know, we got to 1.5 to 1.7, you know. Um, so he was with me, he was in the trenches for probably longer than he should have been, but he wanted to be as long as he could. And so, uh, in some ways, uh, thankful for having him there with me. So for sure, for sure.

23:32And you know, I've often said that there, there are 3 coaching companies that fit my personality, right? 180 Biz, Elite, and the Institute. I'm with the Institute right now, and I love what I've got. I love the connection that I've gotten. I've had really great success with them, um, across the board because they offer a lot of stuff. But man, Darren Barney has done such a good job with Elite, and, and ethically and morally, it fits very close to my belief system, like what they teach.

23:59And I think that's so important when you have a coach because you're bringing up a lot of the things that— there are businesses who focus solely on the money, there's businesses who focus solely on volume and hey, let's get the big dollars in here, let's get to MSO, let's grow, grow, grow. And there's coaching companies for those businesses. And then there's those businesses who are, are 100% about the relationship, 100% about sustainability, 100% about stress management.

24:26And I think those are the companies that really focus on that, right? Like that's what they do in their coaching is, is develop sustainable business.. And so I've been really happy with the Institute. Tell us a little bit about your journey with Elite. Yeah, so correct me if I'm wrong, Institute, that's started by Cecil Bullard? Yeah. Okay, uh, so yeah, actually that's where I got my started was with Cecil, uh, at the WorldPAC 20s.

24:54And so Cecil, uh, really taught me a ton. I love working with Cecil, and I think by the time I was kind of like closing out there with WorldPAC's 20s group. He was starting the institute, I believe. So him and his son have done a great job there from what I've seen from afar. Yeah, dude, it's amazing. Truly amazing. Cool. But anyways, Elite, yeah, it's good.

25:24I like the aspect of meeting weekly. I've kind of already alluded to that., but, um, they've got some new, you know, at the time it was, help me out, Cooper, um, who owned it and then they've transitioned, but I've liked the transition. I did go to the Eagles and it's kind of been refreshed and, uh, yeah, I think it's just great to have a network of people.

25:52You cannot do this alone. I mean, you, you literally have to have these guys in, you know, I use an acronym, OTWATER, on the wall, at the ready. And so, you know, you got to have guys in your corner that are there to help you navigate these difficult things or make sure that the business is being run successful. Um, so yeah, that accountability piece, right?

26:19Like, there you go. That's, that's what I struggle the most with. And, and, you know, I was, I was talking to a friend of mine just a little bit ago, and, uh, really sweet guy. He's having some business troubles, and, and he tends to make bad decisions sometimes. And he's going to listen to this later, and his wife's going to listen to this later, and they're going to look at each other, and she's going to be shaking her head at him, right?

26:38But he went out and he bought a truck, and he bought this like $140,000 Ford pickup, and he financed it, and the financing agreement ain't so great, right? So now he's like, oh, I'm gonna refinance my house to pay the truck off to get a better loan, right? Paid more for the truck than he paid for his house. And so like the accountability aspect of that, and I see a lot of shop owners who don't want that accountability.

27:03I'm the owner, right? Like, it's funny, I'm gonna talk shit on David for a minute because like David won't listen to anybody, but Cecil puts his foot down and David's like, okay, I'm sorry. It's terrible, right? Like, well, Cecil's good at that. Very good at that. It's the only person David listens to of anybody out there.. But I think that that's what shop owners need.

27:24And I think that especially some people, some people do really well with having a coach and that one coach is their accountability partner. And then other people do better with having that group and that group being the accountability partner. And you have that person calling and saying, hey man, did you get that done? You know, I think that that pushes people, but there are a lot of shop owners who don't like accountability.

27:44Did you find that with your dad a little bit? Because that's one of the things that we've dealt with in the family business is dad doesn't like accountability at all. I've been doing this 50 years, boy. You better watch out, you know? Oh yeah, I mean, absolutely. There were some heated moments and conversations, sometimes still, you know, with him buying all the latest tools and equipment, which is a great thing.

28:11But I'm like, hey, we do have a budget. We need to be watching this. So quickly, he's the guy who can spend a lot. So it's a good thing. The guys in the shop love him for it when he comes in with a new scan tool, or, or, hey, drive this new— this month, but yeah. And, um, love that he's found YouTube and found, uh, automotive guys out there that are talking about tools and comes back with, hey, what about this?

28:41We need to buy this now. So yeah, I got to keep him in check with the, the pocketbook. Oh man. But it's his, right? Like that. Yeah, I get that it's yours too at this point, and he knows he's leaving it to you, but he might be spending your inheritance right now. Oh yeah. My dad keeps reminding me like, boy, this is still mine.

29:01And until it's yours and I'm gone, it's going to be mine. And so you're going to listen to me. And I'm like, oh my God. And so I honor it, right? Like, I'm listening, I'm doing what he asked me to do. But that doesn't mean that I'm not like, My dad's gonna leave me a bill for his funeral. That's what I'm gonna get for my dad.

29:24David, earmuffs, kids. That's fucked up. Um, it's true. That's all I'm gonna get. I— what kind of bill is your mom gonna leave David? Probably the same. At least for my dad, I might find out I have a couple of, uh, stepbrothers and sisters floating around I didn't know about. I'll see him at the funeral. I'm like, who the hell are you?

29:49You kind of look like me. Could you imagine if the world had more than one David Roman in it? I don't— man, I'm just gonna be honest with you, I don't know that. Look, this is, this is a culmination of being raised the way I was raised, okay? That's unique. Ain't nobody else getting that nonsense. Yeah, that's a good point. I, I, I, I mean, like, I don't know how we got here, and I don't know what the raising was like, but it, it's a fucked up world we live in.

30:22It's traumatizing is what it was. Traumatizing. I can tell. I can tell it made you— it's gotta be traumatizing. You gotta take it and push it all the way down, like way down inside. Notice that, but the problem is, is it continues to bubble out, um, in little doses here and there, typically when there's people who are sensitive on the other end of the podcast table.

30:48I've only made one or two people cry. I think there's been a few criers on the podcast. No, we've had more than that. We've had more than two for sure. Yeah, we've definitely had more than that. Any hangups? No, no. Well, okay. Rage quitters? No, we haven't. One or two times. Yeah, we've had to frantically get off the stream. Like, no, cut it, cut it, cut it.

31:14Those are the podcasts I would really love to see in a UGP action. No, you don't want to see that. Trust me, you don't want to see. That was bad. You cannot see what you see. You're like, ugh. Listen, this has been like 5 or 6 years. And it is still dinner table discussion, right? Like, that's because you're bringing it up. Remember that time?

31:34And David's like, no, she doesn't even remember. She brought it up at dinner the other night. Did she? Yeah, I wasn't listening. No, you were in the bathroom. And she's like, hey, do you guys still talk to that? Like, yeah. Oh, is that why you guys were talking about it when I got back? Oh my goodness. I told her about the reflection on your face and she's like, I would have loved to have seen that.

32:00There was nothing to reflect. Are you kidding me? That thing was all shriveled up. Get out of here. It wasn't nothing there. That's beginning to put the meat in the soup. Listen, listen, we were just really early to the whole OF scene. If we just knew, if we just knew. Yeah, exactly, exactly. We could have made millions, man. We could have made millions.

32:22So I don't know. That's a great transition. I don't know about shopware. Monique, I'm sorry. I really am terribly sorry, Monique. I'm just saying, if we had an equivalent, we could have screenshotted that and posted it on the RO and it would have been there forever. Yeah. Just go back to the RO and look it up. So Matt, Shopware, you Shopware in your business?

32:53Yes. Isn't it bad if he had said no? It'd be like, why do you guys have me on here? Do you have to? I use, I use RO Writer. We only have people who don't use Shopware on to tell them how stupid they are. Those are the people that we just talked about. Ah, he's totally right. We get them on the podcast and we just sit there, berate them for their idiocy.

33:17I mean, look, look, if I wanted the Mitchell of shop management softwares, I would choose one of those other— just cloud-based, right? Exactly. Cloud-based Mitchell. I, I want like an innovative product. I want something that's thinking ahead and that, that was designed in the customer's eyes, right? Like it was designed to serve the client. And that's what, that's what sold me on You just don't want something data mining you.

33:42Exactly. Um, we weren't supposed to talk about that, David. Um, what? Why not? That is an open secret now. Everybody knows that. Yeah. There are lots of companies that data mine you and I don't like that. Um, but I'm okay with the data mining, but they just, they gotta be transparent. We're like, hey, we're data mining for improvement of the product. Not, hey, we're data mining you so we can sell you more shit down the line.

34:08When we tack on some new product. And we're going to auto-sub you to this, by the way, you know. Yeah, we're going to auto-sub you, then we're going to have some stupid AI running in the background. You mean Shot Marketing Software is doing that? They're going to. Are you kidding me? They're going to be pushing some AI nonsense and they're going to like, hey, the whole thing is going to build an RO for you.

34:30Just click the AI button. It's coming. You know, you know what they need to do is just call it Jeeves. You remember Ask Jeeves from back in the day? I do. Hey, well, they, they all have a name. My local collision shop came to me the other day and he was like, hey, I just want you to look at this. And he brings me this estimate and it was an insurance company and they are holding their ground, right?

34:55Like, this bunch is absolutely saying that is what you're going to get paid. We're not negotiating, we're not talking about it. And at the bottom of it, it says this estimate has been generated by AI. No human involvement was, was made in this process. And that is their reasoning for not adjusting it. AI made it and it can't be wrong because AI made it.

35:20And he said, I'd want to know who wrote the code for that AI and go talk to that person. No, no, no. They bought it from somebody. Ain't nobody writing their own code, dude. These people are buying. They're either typed in, I need, I need code to build an AI. I need a large language model that's going to save me 30% on my insurance payouts.

35:42That's what they did. They said, I need 30%. It's like, sure, absolutely. I can knock labor time down 30%. I'm going to scrape the internet to find the cheapest everything ever. And then slap it on the RO with the shortest amount of times. But here's the thing, most of these companies are buying some service or something, you know what I'm saying? Like they're going to OpenAI and saying, hey, we want to be able to use it in the background.

36:07Uh, how much is that going to cost? They're not writing their own. That's what I'm saying. Nobody's writing their own. It takes too long. But like their, their motivation was they put their motivation into it. Right. Well, yeah. And yeah, just like all of these, uh, calibration agreements, like GEICO and Allstate and all these other companies have set up calibration agreements with these companies, and, and Caliber and some of those companies have set contracts with them.

36:34So in the collision space, it's like, it— I, I think what Caliber was really doing and what these big collision chains were doing is they said, hey, look, if we bend to insurance will right? We're, we're super huge, we're profitable, we don't really care about the end quality product. We can use the cheapest parts, we can use low-skilled labor, we can turn a profit even if we're not charging what we should charge.

37:00And so if we're willing to bend to their requirements, we'll get in bed with these insurance companies, we'll work out a deal, they'll be sending us all the work, and so we'll just, we'll kill them in volume. On low-quality repairs. And, and I, I can't help but wonder about this, right? So remember the Keith Perkins— so Matt, a while back Keith Perkins makes a video.

37:20He's a huge, huge, huge technical trainer in our space. Gets a car in and they want it programmed for an airbag or SRS module, right? Get the car in and Keith says, hey, changing this module is not going to help because there's resistors in the seat belts and the seat belts have been cut. There's resistors in the airbags. Like, it doesn't have airbags in it, or it has faulty airbags in it, and you've put resistors in.

37:46And so he makes a video about it. About a month later, Ken Miller, who is the president of AASP New Jersey, owns 821 Collision up in New Jersey. Ken Miller makes a video, same thing, right? And then just, I want to say last week, I saw 3 or 4 shops while we were at Vision posting pictures of resistors in airbag and seat belt circuits.

38:11And it's like, dude, that's wrong. But it makes me wonder, is it possible that this influx of these big chain collision shops might have something to do with that? I don't think all the mom-and-pop shops are what's doing that. I know that if I went to my mom-and-pop shop and said, hey, I need you to disable the safety systems on this automobile, they're going to be like, you need us to what?

38:33I don't think so. Yeah, right. I mean, I think that's shady. I don't know. But don't— is it possible, David, that it's because of all those big chain stores? I'm not, not assigning guilt to them. I'm just saying, is it possible? Yes. Where you go? Yeah, I think, um, you know, the body— I— it's not my world, right? But I think the body shops have just been to the insurance company And that's, I don't want to ever see us become like working for an insurance company.

39:09You know, in fact, we'd probably get out of this, right? Yeah. But we've got, talking about AI, I mean, we're gonna, my concern would be too is like we're gonna lose the personal touch. That's what gives us the advantage over the dealership, that personal touch, that customer service. And then once we just become AI-driven or AI selling the work, we're losing a little bit of our DNA of what we are, you know, after market-wise, I think too.

39:41So I think we gotta tread softly, but they're building AI to try to be personable and try to talk to us. I mean, we use it out there in the shop, try to diagnose the car, and my tech is super talkative. And he's carrying a conversation on with AI like it's a person about his old car. Did you remind him to say please and thank you?

40:02Oh, he was doing it automatically without even thinking. I was like, you know, you're just talking to numbers and just, you're not talking to anybody. But when it takes over the world, we need it to be on our side, right? I don't know how you carry on a conversation like it's so, it's so obvious that you're talking. It's like It's like you're talking to Alexa.

40:23It's like, and you, I don't know, you clearly have not had enough of an algorithm trained to you yet, David. Or maybe, maybe you are so broken that it can't understand you. It's just so obviously not human. It's like no one talks like that. It's really odd. I mean, I think that, like, I mean, you hear about this, people having a relationship with AI.

40:47Or AI told them to do this and they trusted AI so much that they did this crazy act. Did you hear about the guy? This, so there's this guy, I think he was in Florida. I think he was in Florida. Anyway, Florida man for sure. He starts posting on Instagram and he starts posting like fitness content. It was like older guys, like in his 50s or whatever.

41:07And he starts doing a bunch of gear and he starts talking to his ChatGPT. Like they're friends. And the ChatGPT log has the ChatGPT going down this like really, really dark path where all of a sudden it's now he is blasting an immense amount of compounds. And some of them are neurotoxic to the point where like it amplifies underlying personality traits that the normal person goes, this isn't acceptable in society.

41:41I should probably not take this brick and smash that person's face in. And that, these compounds will sometimes suppress those tendencies where all of a sudden that seems like a reasonable thing to do is pick up this brick and smash that person in the face. And so the AI kept pushing him further and further and further to the point where it convinced him that he had to murder his mom and then take his own life.

42:06And that's what he ended up doing. Is he murdered his mom and he's posting on Instagram and the, and the videos became more and more unhinged that people started posting on the comments going, somebody needs to check on this guy because he is not well. It is, we was obvious that this guy had completely gone off the reservation and that's what it ended up being is, uh, is, uh, him murdering his mom and killing himself.

42:33Yeah, it was messed up. Really messed up. But you know, that, that, that was like, you know, 3 versions ago. AI, they've ever since fixed that and they've made it like, uh, it's stupid, but like, I, I don't know, even, even these new versions, even the ones that are like less and less, I don't know, natural, what they just, the more they try to, um, to stop that kind of like, uh, thing from happening, the, the more they end up tempering it and the more ends up sounding artificial.

43:04I, I just don't know how you end up. Having any conversations with these things going, yeah, I'm going to feel like I'm talking to somebody. Really? Have you ever talked to a real human? Because that's not what it sounds like at all. At all. Just the tone. Just tone. Just tone. You can't miss the tone a little bit. It misses tone entirely.

43:27It doesn't miss my tone. It doesn't have tone. And so It's not putting any emphasis on any syllables. And I'm listening to it going, this is the most monotone, like robotic nonsense. And my brain like— Are you telling me that AI is teaching technical classes? Is that what you're saying? Are you saying these trainers are all building these classes in AI and then just regurgitating the information?

43:54Is that what you're accusing these— Is that why you started this? Is that why you— Hold on, hold on. Is that why you did the survey? Is that why you did the survey is I want a list of all the classes that were obviously built with an AI? AI? Is that what you're doing? I'm just going to tell you. You look so guilty.

44:08That is so messed up. I want names. I want names. Oh, you're going to have the names. Ooh, you're going to have the— oh shit. You're going to have the names. This is so messed up. Are you, are you— the trainers, the trainers are going to AI and then they're submitting these trash classes. What does that say? Hold on. Hold on. Not only are these trainers like lazy and they're building these things out of AI, which is like, That's so wrong, right?

44:32So wrong. Yes. And then, and then the, who is selecting these classes that they're going, this is a good class. No, it's AI slop. How are you not seeing this as AI slop? And this is, this is why I have no hope in humanity now. This is why we're all going to get taken over by the robots. I'm just telling you right now.

44:49I'm just telling you right now. So, you know, I got into peptides and all that stuff, right? And so there's this guy, there's this guy on the internet. And he's, he's got, he's bald and he's got this big beard and he's all jacked and stuff like that. And he says the most unhinged shit ever. Right. And it's hilarious because he'll record like 45.

45:07You shaved your beard. I thought he was describing himself for a moment. No, no, no, no, no, no. He's all tatted up and stuff like that. And he says the stupidest shit. And anyway, he says 40, it's 45 minutes to 60 minutes. And for like 25 minutes. He just tells everybody how stupid they are and how smart he is. Like, that's what he does for 25 minutes.

45:28It is hilarious to listen to. I listen to it and I laugh. I'm just laughing and laughing. He doesn't listen to AI, but he'll listen to this guy unhinged. No, no, no. I listen. Yeah, I listen to it so I can listen to him degrade his audience. Like, you morons don't even know what you're talking about. I know more. I've forgotten more than you'll ever know.

45:48And that's how he goes on and on and on like that. And it's every podcast too. Like he spent 25 minutes doing— anyway, it got to the point where people started like posting the comment, like the actual content starts at 25:46. And like, they started posting it in the comment section anyway. That's crazy. Anyway. And the, the comments, the comments from people that are into the space are always like, if you can get past his unhinged rants about how smart he is and how stupid everybody else is and how good looking he is and how hot his wife is, how rich he is.

46:22And nobody should pay him any money. He doesn't care because he's already super rich. If you can get past all that, he's got really good information on biology. And I'm like, so he sets up the camera like up here and then he's looking at the screen. He's not actually looking at the camera, talking to the camera. And that's because the motherfucker's reading ChatGPT content about the whatever it is.

46:47That's all he's doing. He's got a freaking, like, what's that, teleprompter? He's got a freaking teleprompter going off with all of the technical terms. And so he'll like, he'll sit there and just blah, blah, blah, blah, blah. And it sounds smart if you don't know shh, F all about the thing. And you're like, hold on, hold on, hold on. Because what makes somebody actually smart, Lucas, you've heard, you have said this before, is to be able to take the information that you know and be able to then disseminate it in an understandable fashion for people who don't know the information.

47:22You can take that and you can translate it and make it understandable because you yourself have mastery of the content. If you're just reading ChatGPT nonsense, you're just, you don't have mastery of the content. And all you're doing is just blabbering about shit that are just going over people's heads. And it sounds smart to the normie. But if you don't, if you've never taught a class, if you've never tried to teach anybody anything ever about anything, you're like, oh, that guy's really smart.

47:51What? Because he's reading off a freaking teleprompter, ChatGPT slop. Listen, you make a really valid point because some of these people were saying like some of the feedback that I got and this upset a lot of people, right? That video upset a lot of people and I got a little bit of hate mail. A little bit of like, hey, we want to be better, male, and a little bit of like— the people that were hating on you got— were— feel like they were getting called out.

48:15Yeah, that's what I'm saying. Well, and so listen, some of the feedback that I got from actual technicians who have been attending classes said it sounds like I'm listening to AI because the instructor stands at the front of the room and says, this is about the 2025 BMW, and you see here that we have a coil-on plug set up, and it does the— and it's just monotone all the way through.

48:38There's no enthusiasm, there's no excitement, there's no fire in it, right? I've told you so many times about that Ian Leiby class because, I mean, dude just like ripped the class apart, and like there was excitement, there was energy, and there was, there was like passion for what he was talking about. Yeah. And it seems like the majority of instructors we have in automotive right now don't have that passion.

48:59Now lots of them do, right? You sit in a Brandon Steckler class, you sit in a Keith Perkins class, buddy, they're fired up. You sit in a Rick White class, you're leaving that motivated. There's no ifs, ands, or buts about it. You sit in a Cecil class, you're going to leave that saying, damn, I'm gonna go back and fix my numbers, right?

49:15But some of these classes, these, these masses classes, if you'll call them that— masses classes, masses classes might as well be pizza parties. It's terrible, right? I'm okay. Hey, I don't have a problem with the pizza party class if the instructor's good. Yeah. If the instructor's trash, like, and here's the thing, like, I don't understand these companies that are sending out these instructors.

49:36They know they're trash. They're probably union as they can't fire them. And so they got to send them out and do something. And so we're going to send them out to pizza party classes. And you know, I've sent my technicians to lots of pizza party classes, usually barbecue classes here, but we send them out to barbecue classes and they come back and They, here's what they do is they look at the instructor name and if the instructor is somebody they know, that they're all, they don't care about the content.

50:04They don't care about the topic because they know that instructor is going to, he's going to shift the content to the audience. If a whole bunch of, of experienced technicians show up that know the basics, they're going to then, hey, we're going to push through the first 30 minutes of the class and we're going to go into the good stuff because they know like, hey, I don't need to bore you with, you know, how it jumps from primary windings, secondary windings on the coil, blah, blah, blah, blah.

50:32Like he doesn't need to go through. But at the same time, a whole bunch of brand new technicians show up and they all look like they're fresh faced, never grown a beard, that kind of thing. They're going to go, yeah, you know what? We need to go over the basics here. This is what 12 volts look like, looks like. And this is what direct current versus AC current.

50:47And he's good. They're going to dumb it down, but they end up looking at the instructor. And if the instructor is somebody that they know and recognize, they'll go to the class regardless of whether it's a barbecue class or not, because they know that instructor is going to bring it. Yeah. I don't know. I don't know. In, in it's okay in a college.

51:07It's okay in a high school where, you know, like, hey, the English teacher is a shit teacher. He's been here for 25 years. They can't get rid of him. Because he's a union, he's tenured, whatever, right? I understand that. But out in the aftermarket space where like you, like you have to build these classes from scratch and you need, you're representing a name if it's WTI or whatever, right?

51:32Like they're walking in, they're reading the class for the first time the night before and they're, they're walking up on stage and teaching the class they've never even read. They don't even, they're not prepared for That's the first thing you need to ask is, did you write this class yourself? And if they're like, no, it's like, I'm walking out, dude. I'm out.

51:49Deuces. Matt, what are you doing for training? Are you guys still training? You didn't go to Vision. We know that. I didn't see you there. Did not make Vision, but looking forward to WorldPAC coming up here. And so we've done I need to go to Vision. I've never been to Vision, but everyone tells me Vision's dead to us now. It's, it's past.

52:15You need to look in the future. ASTA is coming up in September. Yeah, buddy. Yep. And it's really close in Phoenix. There is a training in Florida coming up. Oh, really? I don't know anything about that. Well, none of those people reached out to us, so I don't know. They're dead to me. The ASTA is coming up. North Carolina. It's not that far away from you.

52:37What part of Florida are you in? Tampa. So there you go. It's like right there on the border. ETI is in Tampa this year. Okay. I'm gonna tell you what, that's a, that's a really good show. Really good show. It's not much. Yeah, that's right. But it's for shop owners that— no, no, no, no. It's, it's for shop owners that are like, if you're not in the business on a daily basis and you're, you've got a general manager or a shop manager that runs the shop, and you want to go, hey, I need to know what's coming up 3 to 5 years down the road.

53:09Yeah. I need to know what kind of technology they're pushing on these newer vehicles. What kind of like fuel delivery devices are going to be going to, for example, I think it was last year or the year before. What, what, what, um, where we recorded with Dave McColl's, uh, what, what, what was that last year? It was last year, wasn't it? 2025?

53:29Anyway. Anyway, uh, Toyota did a whole presentation on F-EVs. Like, we're not messing with EVs. Like, this is our future is in hybrid. We started the hybrid movement. We've, we have refined it. Do you know how good our hybrids are? We can put hybrids in everything. And not only is it like doubling and tripling the fuel mileage, these batteries last 20 years.

53:53And if even if we move away from gasoline, like we're developing our hydrogen, uh, line. And so the hydrogen cartridges that go into the vehicle and like pop in almost like a fuel cell, or like, uh, it's really cool. And it's like that, that to me, if you've got a shop and you're thinking 10, 15, 20 years down the road, like, no, that's too far, that's too far.

54:18It's 3 to 5 years because there was that class that GM did, that class that GM did where they were talking about the This is our current networking structure and this is what we're going to be moving towards. Now that's shit that you want to know because you're like, okay, how am I going to tool up for this? And then what kind of training do I— you're not sending your technicians to EV training after you go to ETI and you hear what Toyota said.

54:40Toyota's like, F EVs. Like, and so the, all these EV classes are coming out and you're like, I don't need to teach my guys about EVs. They need to know about hybrids. Yeah, because you know the future isn't EV, the future's hybrid. You see what I'm saying? So you're, you're formulating your next 3 to 5 years based around the training that you get at ETI.

55:00But if you're like on the daily answering the phones and stuff like that, you're still dealing with customers. You're just, you're too in the muck to, to be thinking like overall. So do you think hydrogen is, is the 10 years out? I, I believe so. Yeah, that's what Toyota said. I think there's challenges associated with it, but Toyota's throwing a ton of weight behind hydrogen right now.

55:24And yeah, they're— throws weight behind something, buddy, they know markets, right? Well, they're not the biggest— aren't they the biggest? They're the biggest right now, aren't they? Number one carmaker in the world said screw EVs, we're gonna go hybrid. And like, they're the— they were— they're gonna set the market, dude, right? Like, they, they were in hybrid and EV very early on, and they had a ton of research and data that went into it.

55:45And for them to back up and say, hey, like with the technology we have right now, something may change at some point, but right now this pathway doesn't look sustainable and feasible. Yeah, right. And for them to say that, that says a lot. Well, it makes perfect sense. They only have an EV because they're mandated to do so, it seems like. I mean, I think I saw one commercial advertising their EV vehicle.

56:07I mean, the BRZ is a cool vehicle. I would totally buy one. But here's the thing though. The, if, if they, they released EVs, if the market had swung wildly towards EVs, and I'm talking about the consumer, the consumer wanted EVs and they were, that's what they were buying and they were buying it in droves, come hell or high water. And this is regardless of all of the tax credits that people were demanding EVs, then you would have seen a shift because Toyota would have been like, we've seen the market.

56:35Everybody wants EVs. That's what we're going to be pushing our technology towards. But guess what they saw? They saw the rejection. They saw the only reason why everybody's propping them, like the federal government's propping them up. And then they are completely worthless after 2 years of ownership. And all we're going to have is like fields and fields and fields of EVs with junk batteries that are like, we can't do anything with them.

57:01And so they immediately saw that, hey, this is, this is not sustainable. Like we need to move away from this. Americans don't want— the number one car market in the world doesn't want flipping EVs. Yeah, yeah, I agree. Matt, in closing, where do you think you're going from here? What, what is the vision for the business moving forward? Uh, good question. Um, looking just to I look at it like from 3 standpoints maybe, but me personally, where I'm gonna get my growth, we kind of alluded to that.

57:44You know, I got a lot of growth in me that needs to happen training knowledge-wise. I think we've got to train up the next generation. I mean, I'm looking, I'm still fairly young. But I'd like to start looking at the next generation. There may be somebody— I'm 42. Okay. And so like, you're, you're already thinking, hey, I better have a succession plan, I better have some strategies.

58:10Exactly. Yep, exactly. Um, and so there may be somebody in this, uh, working for me now that wants to, uh, move to that next level. Um, I think it's hard for the young people to come in this industry and see that this is a great doorway to open up to, like, I mean, do a podcast, be a shop owner, be the manager, go be a trainer, you know, if you've got the enthusiasm and knowledge and information.

58:41I mean, it sounds pretty easy beating these barbecue and pizza places to go out there and be a trainer. So the doorways are great that We need to train up those employees out there and say, hey, where are the doorways and where are you best fit and what does that look like? And then just building, I think, you know, I probably should have led off with this because I think it's really a good firm foundation is like, how do we continue to grow the customer relationship and build upon that as we move into a world that's going to be AI?

59:15Let's not lose focus of the personal touch. The personal interactions, the face-to-face that we need to have with these customers that are essentially keeping this business alive. And so there's many ways with community involvement and things that I think we can grow upon building that dynamic between our customer base and our community. For sure. And we have seen that. We've seen a shift, right?

59:42I remember that when I was little, My dad had started going to the shop that his dad went to, and then it was, I was going to go to that shop, and then I obviously started a shop. And we see that, but now we're seeing a decline in that, and we're even seeing a generation of consumers who aren't interested in owning a car, aren't even interested in driving.

1:00:04And I think that that leads to an even more complex shift for— No, dude, that's just in New York. That's literally like New York and maybe some parts. No, it wouldn't work in the rest of the world. Like in the rest of the country, maybe in Europe where everything's right on top of you and the streets are like this wide that it works there where you can get around in a freaking Vespa.

1:00:25You think that would work in Kansas? Hey, I need to get to Hayes, Kansas. I'm going to jump on my Vespa and go. Yeah. Good luck. One stiff wind, one stiff wind, and you're gone. You're gone. That you and your Vespa, you're going to be airborne. Gone. I would be way more worried about the dude in the white Chrysler minivan. Not paying any attention to the road, by the way.

1:00:47Going barreling down the highway at 90 miles an hour, playing on Instagram. That's what he's doing. We're going to dinner on Saturday night and he like just drifts over into this other lane and I look over and there's probably this 7 to 10 year old little girl in the backseat looking. She's just staring at us. I'm like, he's nuts. I wish I'd been recording.

1:01:07Brothers, thank you so much for being on the show. We really appreciate you being here. Yeah, man, appreciate you guys having me. Yes, sir. Thank you for listening to the Changing the Industry podcast. If you enjoy the show, do us a favor and leave us a review on your favorite podcast player, and don't forget to set it to automatically download the latest episode.

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