It's not just the dealer taking a cut, the mechanic(s) also take a cut in pay. It's not uncommon for a good flat-rate mechanic to get paid for 10-15 hours in an 8 hour day. If all you do is warranty work, you might get paid for 6 hours in that 8 hour day. Maybe less.
I'm confused about the terminology. "Flat rate" normally means that the employees gets a set salary each week, for a set number of hours per week. Let's say he works a 38 hour week and gets $2,000 per week. It makes no difference to the employee if there is not work to do and he can sit around drinking coffee or he may choose to do something more productive such as tidy the workshop. Either way, at the end of the week he is going to get $2,000 deposited into his bank account (ignoring tax, etc.).
If the work to be done earns his boss less then the boss suffers, not the employee.
On the other hand, if the employee is paid according to the "billable hours", then the situation is as you describe. If 1 hour is designated to the job and he can do two of those jobe in one hour, he earns twice as much. Likewise, if the job takes him two hours, he earns half as much. From what I understand, in most cases the allocated times are very much in favour of the dealership and employee, at the expense of the customer.
How long would you stay at a job if your boss came to you and said we're going to pay you half your normal salary for the next few months?
Seriously? How often would it happen that the only work being done is warranty work? What percentage of a dealership workshop's work is warranty work? If it's excessive, then the product is crap and the dealer should seek a different product to sell.
I understand that a dealer might lose a bit on warranty work, but look at how much he is overcharging the customer for all the regular worker. By your own admission the customer is getting charged for "10-15 hours work in an 8 hour day". In other words, for a job that actually take 1 hour to do the customer is being charged for 1.5 hours, maybe more. Who is being ripped off here?
For the dealer and the mechanic to wear a bit of a reduced income for the warranty work when they make exhorbitant profits using the manufacturers' specified times for the non-warranty work would seem like a reasonable situation. It's a case of swings and roundabouts.
