New Orleans transmission shop successfully expands into total auto care

In 1988, Frank Cato, a 54-year-old repair technician, got the entrepreneurial itch and opened a Cottman Transmission Shop in New Orleans, LA. Today, under the ownership and management of his two sons, Rusty and Randy, the business has grown to include three franchises – two in New Orleans proper and one in nearby Gretna, LA – offering transmission and total auto care. The brothers have found operating multiple locations allows them to maximize their tools and tailor both their assets and manpower to the three shops’ varying workloads.

The brothers, both in their forties, have found that expanding beyond transmission work to include general auto repair allows them to better utilize both their tool and manpower capabilities. The company’s sales have grown by two to three percent in each of the last five years in a region that continues to suffer the dual impact of a devastating hurricane and an oil spill.

The Catos also credit the technical and marketing strength of a national franchise organization. The Cottman organization began in 1962 and has grown to include several hundred franchises nationwide.

The Cato brothers feel fortunate to have “come of age” in auto repair at a time when vehicle manufacturers were introducing electronic controls. Under the guidance of their now-retired father, the Catos, as ASE certified techs, familiarized themselves with changing automotive technology while they were in their 20s.

By 2005, with six employees (not counting themselves), six bays and three lifts, the Catos came across an opportunity to buy a second shop at a location that didn’t experience flooding caused by Hurricane Katrina. When the hurricane flooded their first shop on Earhart Boulevard, they moved their operations to the newly-acquired second shop in the La Place neighborhood.

Katrina strikes New Orleans

Repair shops that stayed open during Katrina’s immediate aftermath benefited from the influx of orders from repair centers that closed. The Catos’ first shop was back in operation in about two months.

By that time, the company was on a growth curve, thanks to the expansion beyond transmission work to general auto repair, a move supported by the Cottman franchise organization. This required adding air conditioning equipment to their existing tool arsenal.

“We were doing that (general repair) work anyway,” Randy explains. “We just now advertise it.”

This past year, the Catos opened their third shop in Gretna, LA, a town just across the Mississippi River from New Orleans.

Franchise organization provides resources

As a part of Cottman, the stores offer a warranty and have access to a technical company hotline. The national franchise organization also runs professionally-produced TV commercials and has helped provide a professional-looking website and a social media initiative.

The Catos learned the importance of electronic scan tools in the early Nineties, when these tools were just coming on the market.

They were introduced to computerized diagnostics years ago when they were having trouble identifying a problem with a Chrysler transmission just when the Snap-on tool truck happened to pay a visit. The Snap-on distributor was able to look up the problem with his electronic scanner and identify a solution in less than 20 minutes. That very moment, they bought a Snap-on MT2500 “Brick” scanner.

Ever since, they have put a strong emphasis on having the right tools for computerized diagnostics. The company currently uses three different scan tools, housing one scanner in each of their three locations. The La Place shop has the Snap-on tool, the Gretna shop houses an OTC Genisys scan tool, and the main shop has the Autel MaxiDAS. “They all do different things very well,” Randy says. If the scanner at a particular shop isn’t the best one for a particular problem, they use another shop’s scanner.

The brothers have a similar system for making use of different automotive repair data software: Alldata, Mitchell 1 and Identifix. Each shop houses one of the three systems. “One has a lot of information (and is good for estimates). One is good on wiring diagnosis. One is good at easy-to-find stuff (with easy-to-follow diagnosis and repair steps),” Randy explains.

Having three shops has allowed the company to acquire not only a diverse offering of tools that are important in today’s auto repair business, but a highly versatile staff of technicians and transmission rebuilders. Two of the shops have three techs, one has two techs, and each shop has a dedicated equipment rebuilder.

The Cato brothers make all buying decisions about shop-owned equipment, which includes electronic and air conditioning tools. The techs keep their hand tools in toolboxes and roll-around carts.

Shop-owned tools are kept in cabinets. Randy says there is no organized system for tracking shop-owned tools on the shop floor. So far, the technicians have done a good job returning tools; lost tools haven’t been an issue thus far.

Randy says transmission systems have changed the most in recent years. He particularly looks for different tools that allow him to diagnose both the electrical (scan tool, meter, labscope, Power Probe, etc.) and mechanical parts (pressure gauge, run-out dials, seal installers, bearing presses, files, oil pump installers, snap-ring pliers, torque wrenches) of a transmission.

While electronics have made it easier to diagnose and repair problems, some models that have the Transmission Control Module (TCM) built into the transmission can be a challenge. The TCM can be on the transmission case or in the valve body, which requires a transmission rebuild, making the job more expensive.

“You have to raise prices if cost goes up,” Randy says. “It’s getting harder to explain to a customer what it costs to repair a 10-year-old vehicle. They just don’t see the value (of a costly repair) in a 10-year-old car.”

Keeping on top of new electronics is an ongoing task. Randy notes that today’s new vehicles don’t make their way to the repair shops until after the OEM warranties expire.

In the future, the brothers hope to add one or two more shops. They believe with the right tools, people and business model, they can expand their success in the greater New Orleans area.

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