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IAM Local 701, representing auto technicians across Illinois, applauds the findings of a groundbreaking study evaluating the effects of the 2022 Illinois law on auto mechanic warranty work reimbursement. The law, spearheaded by then DBR Sam Cicinelli, introduced in the House by Illinois State Rep. Larry Walsh and endorsed by IAM Local 701, created fair compensation for warranty repairs conducted by Illinois auto technicians.
The results of the study, titled “Improving the Motor Vehicle Franchise Act in Illinois: Impacts of the Multiplier Act on Car Dealerships, Mechanics, and Drivers,” were released by the Illinois Economic Policy Institute (ILEPI) and the Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign.
In their study, ILEPI and PMCR researchers first used data from the U.S. Census Bureau, the U.S. Bureau of Labor Statistics, and the National Automobile Dealers Association to compare the economic outcomes of affected workers with other private sector workers in Illinois as well as with their counterparts in neighboring states that do not have similar warranty parity laws.
“This bipartisan law removed the two-tiered compensation system and ensured that automakers fully fund warranty repair services at local dealers,” said ILEPI Economist and study coauthor Frank Manzo IV. “By bringing pay for warranty work up to the same market standard for non-warranty work, the law has generated positive economic impacts across Illinois.”
The study also revealed that the law has increased worker earnings at Illinois’ auto dealers by $143 million annually and saved auto dealers money through a 9% reduction in employee turnover. Additionally, researchers found that law has boosted Illinois’ economy by over $300 million and generated more than $40 million in combined state and local tax revenues every year.
“The findings of this study underscore the importance of fair compensation for auto technicians and the positive effects it has on our communities,” said IAM Local 701 Directing Business Representative Mark Grasseschi. “IAM Local 701 is proud to have played a role in advocating for this law and appreciates the efforts of the ILEPI and PMCR researchers on producing this detailed study. IAM Local 701 remains committed to upholding this law that prioritizes the well-being of auto technicians and advances the automotive industry in Illinois.”
Since its passage at the end of the 2021 Illinois legislative session, the law has made significant strides in rectifying a two-tiered compensation system for certified auto mechanics at Illinois’ car dealerships. This reform has not only increased technicians’ paychecks but has also addressed the statewide shortage of qualified auto technicians. Moreover, it has stimulated economic activity, bolstered state and local tax revenues, and promoted enhanced vehicle safety and reliability.
“This law has helped IAM mechanics and the entire Illinois auto industry by forcing manufacturers to reimburse dealerships at the retail rate for all warranty repairs. Now technicians will be fairly compensated for the work performed,” said IAM Midwest Territory General Vice President Sam Cicinelli. “This law should be replicated nationwide in the auto industry and is another example of when we come together and fight, we win. Going forward, we must ensure that we defend against any attempts to roll back this law and its positive progress.”
