At first glance, you might think Tea, South Dakota, with a population of only about 4500, would be a terrible place to open a transmission repair shop. And when Jerry and Mary Ellen Heirigs opened J&M Transmission in 1993, the numbers were even worse: Back then, Tea had fewer than 1000 residents!
But Tea is right on the edge of Sioux Falls, the largest city in South Dakota. And being based just outside the city has some real advantages.
“As a specialty shop, we’re plenty close to Sioux Falls,” explains Jerry. “This is the mid-west; people are used to driving a little farther to get where they’re going. Driving 20 or 30 miles is no big deal.
“And it gives us easy access to open roads where we can test drive a car properly. We’re a mile off the interstate, and if you’re going to rebuild a transmission, you’d better get it up to highway speed to make sure it’s working right.”
In addition, ground prices in Tea are substantially lower than in the Sioux Falls metro area. And, chances are, they’d never have found a property the size they needed for their shop. So, all things considered, choosing a site in Tea might have been one of the smartest decisions they could’ve made.
Getting Started
“I wanted to open my own shop since I started turning wrenches professionally in 1978,” says Jerry. “What type of shop depended on what I was working on at the time.”
Jerry attended the Mitchell Area Vo-Tech School right out of high school. Then he took his first job: “I grew up on a farm — one of seven kids — so I actually started out working on farm equipment for the local Oliver Tractor dealer. At $3.30 an hour, the only way I could afford to work there was if I lived at home. But it was a start.”
Jerry continued working on industrial equipment for about six years. Meanwhile he worked part time for a local Ford dealer, gaining valuable automotive experience.
“Then I went to work for an established transmission shop, and I truly enjoyed it. This was back in the gravy days, when transmission repairs meant 350s, 400s, C4s, and 727s. In that shop you did your own R&R, so I was doing the entire job, from R&R through the rebuild.”
After a while, Jerry and Mary Ellen pulled up stakes and moved to southern Texas. Jerry got a good job working for a Chevy dealer right near the Texas/ Mexico border.
Even though they were generally happy there, they really wanted their son to go to school where they grew up, so they started making plans to open a shop in South Dakota.
“We made arrangements to have a shop built, and we were all set to move up and open our doors,” explains Jerry. “But when we moved back in July 1993, construction hadn’t even started. So we moved on to plan D or E. We found someone who was willing to remodel part of a warehouse, and we opened there.
“That was within a mile and a half of where we are now. We bought a piece of ground and built our new shop in 1998. That original building was around 3200 square feet. About 10 years later we expanded to 8300 square feet.”
Full Service Shop
J&M began as a transmission-only shop. They officially changed to a full-service shop around 2008 (www. jmtransmissionservice.com). But unlike so many other shops that expanded into general repairs when the economy tanked, J&M expanded their service model slowly, primarily to address their customers’ needs.
“We slid into general repair before the economic crash,” explains Jerry. “Part of it was because a lot of the technicians working here had backgrounds in general repair.”
But a bigger reason was to provide the service that their customers really needed. “Consider how many 700s got rebuilt because of a plugged fuel filter, or the Chevys that came in because they were leaking a red fluid: ‘No sir, that isn’t transmission fluid; it’s engine coolant. The intake manifold is leaking.’
“And, as time went on, the systems became so integrated that a lot of the ‘transmission’ problems had nothing to do with the transmission. That’s when we really started to embrace general repair, because there are so many things that can affect how a transmission operates.”
Not that the economy had nothing to do with the addition, but “It wasn’t the driving force for the change. Adding general repair was just a way to provide the service that our customers need.
“60% or so of the customers who come in are positive they need a transmission repair… but they don’t. In fact, a large percentage of those customers’ problems have nothing to do with the transmission.
“They trust us enough to come in and ask us to fix their vehicles. And sometimes we have to do a lot of convincing to get them to let us fix the real problem: ‘Please, let me get the misfire taken care of, because I’ll bet it’ll fix your transmission problem.’ Sometimes it’s a hard sell.”
It’s a situation everyone in the transmission business can relate to, and one that most shops address on a daily basis. For J&M, it was the underlying reason for expanding from a transmission-only to a full-service repair shop.
It’s an expansion they’ve gone into all the way: “We have an alignment rack in house, and we even have a set of portable column lifts, so we can work on medium-duty trucks and school busses, and 2½- and 3-ton vehicles.
“The most important part of our business is to take care of our customers,” he says. And, when you get right down to it, what else is there?
Reman Distributor
“In 2009, we became a distributor for a major transmission remanufacturer,” explains Jerry. “I was getting frustrated with prima donna rebuilders. I own the shop, and I want the work done my way. I just got tired of beating heads with them.
“So I needed a source that would provide me with a product that met my standards. We were at Expo in Las Vegas when one remanufacturer rolled out its first distributorship program. We were invited to take part and we jumped at it.
“We became one of their first non-stocking distributors. We’re only three hours from the factory, so there’s no need to stock units. Which means I don’t have $200,000 in inventory sitting here.”
In addition, they don’t have to provide space for the transmissions, or even match numbers or pull units from stock. They take the information and place the order: The reman company delivers the transmission to J&M. “They send a truck out pretty much every day.
“That allowed me to reactivate our outside sales program. When you’re rebuilding everything yourself, you’re a little anxious about allowing a general repair shop to handle the install. If something doesn’t work right, there’s all kind of finger-pointing.
“These remans are dyno-tested, they come with fluid and detailed instruction sheets… they’re really designed to be installed by technicians at a general repair shop. And the reman company carries the warranty, not J&M.
“To verify the quality of these remans, we handled virtually all of the installs in house for the first year. I needed to know that their quality was up to my standards. They were every bit as good… sometimes I think they might have been even better.
“Then we started going out and offering remans to other shops. Part of the service we offer is to help them diagnose the problem, so we’re sure it actually needs a transmission.
“Then we order the transmission. It’s typically in our hands the next day, and we get it to them the same day. So they get the car done, it’s off the lift and out of their way, and their customer gets the car back quickly.
“Remans have become a major part of our business, going up 12% to 25% each year. Today we actually operate two separate businesses: Our retail business and our wholesale division, which is basically a parts house.”
J&M is still doing some rebuilding in house, but the vast majority of their transmission jobs involve remans. “We do repairs, but, by the time I buy all the parts I need for a nice, clean rebuild, I’m within about $300 of the price of a reman. And with a reman, I don’t have to pay a rebuilder.”
For the first few years, Jerry handled all his outside sales himself. But last year he finally handed that over to someone else, leaving him free to oversee his business. It’s a strategy that seems to be working well for them.
Bella the Greeter
While many shops wait until customers come to the counter to greet them, J&M has a greeter who’ll meet them at the door. And, in some cases, she’ll roll over for a belly rub.
Bella is a Boston Terrier/Beagle mix, and she’s the owner of Justin Ymker, the shop’s parts manager and service writer. Bella came to the shop because Justin’s wife works nights, and “you can’t leave a little puppy at home during the day while Mom’s sleeping,” explains Mary Ellen.
“So Bella came here as a puppy, and now this is her daily job. She greets our customers and she’s become such an important part of our shop.
“And for me it’s like being a grandparent: I get to have her during the day and she goes home to her Mommy and Daddy at night. They pay for the food and the vet bills, and I get to spoil her rotten!”
But the real benefit of having Bella there is how she relates to the customers. “It isn’t fun to have your car in for repairs,” says Mary Ellen. “People become anxious about that. Bella really helps release some of that tension. So she’s become an integral part of the service that we can provide.”
Growing Their Own
It should be no surprise to anyone reading GEARS that the lack of young technicians entering the auto repair business is becoming critical. But South Dakota is working with businesses like J&M to help create a solution.
“South Dakota has a wonderful program called Build Dakota, where any student choosing a career in high-demand trade industries can apply for a full scholarship,” explains Mary Ellen. “They can also partner with employers to sponsor their education.”
Jaden Maier came to work for J&M while he was in high school. “He worked out so well that he continued working part time through his senior year and is back until college starts this August.”
He enjoys working in the industry and would like to make it a career. So Jerry and Mary Ellen agreed to sponsor him through the Build Dakota program (www.builddakotascholarships.com).
“Jaden will be taking the automotive program at Southeast Technical Institute. Build Dakota will pay for his first year and J&M Transmission will pay for his second year. After graduating, Jaden must continue to work for J&M for three years.”
So Jaden builds a new career, debt free, and J&M gets a new technician they already know and are comfortable with. And South Dakota has one more educated technician, providing his technical prowess within the community, earning a good living, and paying taxes. Sounds like a win-win-win!
If your state doesn’t offer a scholarship program, consider contacting your state representatives and let them know how South Dakota is helping grow tomorrow’s technicians. It sounds like a program that should be available all across the country!
And kudos to Jerry and Mary Ellen for stepping up and helping grow their own. With that kind of attitude, they should be well placed for growth for many years to come.
