"We Fix What Others Can't or Won't"

When Matt Johnson and Blaise Bayer bought Kennedy Transmission in 2015, they recognized the potential to boost revenue by expanding into general repair and new-technology transmissions and drivetrain work.

"When we took over, we immediately started marketing particularly deep-engine repair, timing belt, engine replacement, as well as a lot of electrical work," Matt said. "We just opened it up to everything."

That included the transmission side, where they took on CVTs and dual-clutch units, both of which were things that few other Twin Cities shops wanted to tackle, Matt said. Likewise in general repair, the shop became adept at servicing hybrids.

"I am always looking for what can we do that other people are not, or are what people are struggling with," he said.

The marketing effort focused on general repair, the new facet of the business.

"Our assumption was it is been marketed as a transmission shop for many years. It is got a good reputation; transmissions are a given. You are going to get what you are known for," he said. "We thought we had a lot of room to grow on the general side and to grow quickly."

When they took possession of the shop, general service represented 10% to 15% of revenue; now it is 35%. The transmission side also grew by expanding into the new assemblies. The only constraining factor is the number of bays, just five, which makes things tight.

Transmission focus

While the shop is ready to work on most vehicles, it specializes in European units and CVTs. Whatever the transmission, Matt said he prefers to keep it in the vehicle if at all possible. With rigorous diagnosis, the shop has been able to make customers sigh with relief when the problem is just a speed sensor, wiring issue or a solenoid — but not always.

"I think there is a lot of transmission shops that really focus on price: we will overhaul it for X dollars, and they compete with each other on price. We are not that. I am pretty up front with our customers. We are going to charge you for diagnostics, and we are going to take the time needed with the vehicle. But if the unit has to come out and requires an overhaul, I am not going to claim to be the cheapest. We will build the unit right or we will not build it."

The shop performs two to five overhauls per week, five or more transmission-repair services such as sensors, solenoids, fluids and leaks. Among transmission jobs, less than 5% are R&R, the rest are in-house rebuilding.

Matt described the transmission operation as parts-heavy.

"If there is common failure points, we always try to work them out," he said. The objective is always to get as close to or exceed the OEM standards, he said.

Complex, simple

As general-repair services were rolled out, Kennedy Transmissions also began to hone in on areas where they could stand out.

"We specialize in diagnosing the difficult issues. A lot of our deeper electrical or engine work comes from other shops and from some of the dealerships — if they are struggling diagnosing," Matt said. "Last week we did a timing-change job on a GMC 3.6 liter because another shop did not have a technician that they thought could handle it. So we really specialize on what other shops may not want to get into."

On the other hand, Matt welcomes motorists who have a check engine light but do not understand what it means. The coding issue does not take much time, and it offers an opportunity to meet prospective customers. While taking care of a leak or a loose gas cap, shop professionals can explain the problem, which can make for happy customers or add to additional diagnostics and repairs, he said.

Versatile staff

Technicians do transmission work as well as general repair, and every one of them are well-versed in diagnostics and general repair, Matt said.

"My staff may not be as quick on just removing and replacing common transmissions from common vehicles, but they are all capable of driving and live scanning, looking at code data and assessing what is going on with the transmission. I have only general-service diagnostic technicians who can remove and replace transmissions. They all do all work."

There is one exception: Jeff Stepp, the rebuilding specialist.

He is usually busy at the bench, where he enjoys to be and needs to be, Matt said. However, he is ready to jump in if needed to perform a diagnosis or anything else, as needed.

Customers

Kennedy Transmission has two sets of customers: regular general-repair motorists within 5-10 miles of the shop; and transmission and drivetrain customers from Minnesota, the Dakotas, Wisconsin and Iowa.

Right after acquiring the shop, the business partners reached out to customers in simple ways. Matt designed and ordered flyers online. He also visited more than 200 shops within 15 miles, seeking referrals.

"I went to those shops to say, 'I will not take your customers, but if you run into something that you do not want to deal with, or that you are technicians are struggling with, we will certainly do a good job for your customer," he said. "That was very effective."

The shop offers the ATRA 2-year, 24,000-mile warranty, but no warranty action has been taken since they bought the shop. "If we built the transmission, no matter what the mileage is or what the time is, to date, we have never billed anybody a dollar to fix it," he said.

Business goals

• Expand CVT, hybrid, dual clutch and European business.
• Stay current with electric and driverless vehicle technologies as they enter the aftermarket in the coming years.
• Continue to improve partnerships with local dealerships and high-quality repair shops. Matt's outlook: "You are either creating change, adapting to change, or becoming a victim of change."

"It is hard to learn new things and learn new equipment and get comfortable with a new system, but that is critical to surviving and growing," he said. "My staff is very much on board with that. We do not shy away from difficult repairs, and we do not get too worked up over any type of issue, we just keep plugging on it till we solve it."