Catalytic Converter gutted/SES Light/98 5.7

Just bought a 98 Z71 that the previous owner had the cats gutted at a muffler shop supposedly to get better fuel mileage,( no smog test here), SES light is now on, which is okay with me, but I took it to the dlr the other day for a trans problem, asked the tech about the cats, and he told me that it will make my truck actually burn more fuel and run lean now, that I need to get new ones put back on so I dont hurt the motor (800.00) dlr price...It runs great, and 17mpg, should I do ANYTHING???????????

What's the transmission problem? Cats, who needs cats? Get good cats from random technologies $212 each. Like I said, what tranny problem