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- [00:06]
Ryan Knudsen
There's a problem in the auto industry. There are not enough mechanics. The CEO of Ford, Jim Farley, has been outspoken about it.
- [00:16]
Chris Otz
It's a very serious thing. We do not have trade schools. We are not investing in educating a next generation.
- [00:24]
Ryan Knudsen
This is Farley on a podcast late last year. Those jobs are out there.
- [00:30]
Chris Otz
Mechanics in a Ford dealership. As of this morning, we had 5,000 openings. A bay with a lift and tools and no one to work in it.
- [00:40]
Ryan Knudsen
Farley says that after five years, a mechanic working at a Ford dealership will have enough experience to make $120,000 a year. Yet for some reason, not enough people want to do. According to a trade group, there's an annual shortage of 37,000 mechanics across the industry. Here's our colleague Chris Otz.
- [01:03]
Chris Otz
Farley's comment gave the impression, or at least some people interpreted it this way, that wow, $120,000 jobs and we just don't have enough people who went to trade school and know how to turn wrenches. What is wrong with our country? You know, it was like almost like this moralistic reaction with the government, with education, I think we can solve this,
- [01:32]
Ryan Knudsen
but we have a lot of work to do. But our colleague Chris says that when you actually look at what the job
- [01:42]
Chris Otz
entails, it is not hard to understand why there is a shortage of automotive technicians when you drill into it and understand what it takes to be able to do this job. So I really wanted to help people understand why this profession can be so lucrative, but how hard and tenuous it is to get there.
- [02:11]
Ryan Knudsen
Welcome to the Journal, our show about money, business and power. I'm Ryan knudsen. It's Thursday, April 16th. Coming up on the show, why people are not lining up for this $120,000 job. This episode is presented by SAP. Your company's ambitions can't be held back by long implementations, surprise costs or empty AI promises. SAP Grow AI Cloud ERP gets you live fast, keeps pricing predictable and delivers built in AI that gets results the first day, not someday. All on a single platform that's easy to industry ready and designed to scale with your business. Bring it with SAP Grow AI Cloud ERP for any size business. SAP.com grow Comcast is delivering extraordinary experiences in live sports through the incredible broadcast and storytelling from NBC. Innovative and personalized viewing features on Xfinity and Peacock and the country's most reliable wi fi viewers can enjoy every game changing play faster and more seamlessly than ever. All in a network built to deliver unforgettable moments as close to live as possible, the ultimate experience for the American sports fan. Learn more@comcastcorporation.com sports. To give you a sense of the best case scenario for a career as an auto mechanic, our colleague Chris went to a Ford dealership service center in Kent, Ohio.
- [03:52]
Chris Otz
Showed up about 7am it was still kind of dark outside, kind of cold. And come in the shop and you know it's, it is an automotive repair shop. You know, it's kind of dingy. You know, it is well lit and there's like maybe seven bays on one side, seven bays on the other.
- [04:20]
Ryan Knudsen
Chris was there to interview a man named Ted Hummel. He's worked as a mechanic for almost two decades and he's completed the highest level of training Ford offers. He's reached an official designation of Senior Master Technician. Chris Somm in action.
- [04:35]
Chris Otz
So these F150s have a problem with harsh shifts, harsh engagement, harsh reverse.
- [04:40]
Ryan Knudsen
Gotcha. Hummel makes good money. He takes home around $160,000 a year in part from doing some big difficult repairs. This one's kind of a special case,
- [04:52]
Chris Otz
so I ordered a transmission for this. It needs a whole new transmission.
- [04:57]
Ryan Knudsen
Yeah.
- [04:58]
Chris Otz
Okay.
- [04:58]
Ryan Knudsen
Yeah. The way mechanics get paid is a little funky. It's something known as the flat rate system. With flat rate, each repair pays a preset number of hours based on how long the automaker or the dealership says the job should take. So, for example, hummel makes around $45 an hour. And the job he was working on that day replacing the transmission of a Ford F150 had a preset pay of about 10 hours.
- [05:30]
Chris Otz
Do you have any idea how long this one's going to take you? I'll probably have it out before lunch. Well, that's like very. That's good, right? Yeah. If it pays 10, you get 10 hours, right?
- [05:45]
Ryan Knudsen
Okay.
- [05:45]
Chris Otz
Regardless of how long it takes.
- [05:47]
Ryan Knudsen
Yep.
- [05:48]
Russell Wickham
Okay, gotcha.
- [05:50]
Chris Otz
Ted is effectively going to get double his hourly rate or almost, because, you know, he's doing a 10 hour job in five hours.
- [06:00]
Ryan Knudsen
I mean, when I've done so many
- [06:02]
Chris Otz
of these, I haven't even opened the workshop manual.
- [06:03]
Ryan Knudsen
Like when you first do it, you got to walk back and forth or
- [06:06]
Chris Otz
have something on your toolbox checking each step. So it takes a lot more time.
- [06:10]
Russell Wickham
Yeah.
- [06:13]
Ryan Knudsen
Hummel also has a couple of apprentices who the dealership is paying him to teach. That accounts for about a third of his wages, bringing him to that $160,000 a year total. How many Ted Hummels are there out there?
- [06:29]
Chris Otz
Someone earning that amount of money is like easily top 5% if you look at the median wages for this profession that are tracked by the government. You know, dealers, mechanics at the median earn more like 60,000 a year. So Ford CEO Jim Farley is referencing the absolute elite performers in this system. The technicians with high level of skill and a good situation where they can take advantage of those skills. But it is certainly not typical of a average mechanic's experience in this job.
- [07:14]
Ryan Knudsen
The experience of most mechanics is more like that of a man named Russell Wickham.
- [07:19]
Russell Wickham
You know, when Ford says that they, they can't find people at 120,000 a year, I just hung my head, shook it, and then started laughing.
- [07:31]
Ryan Knudsen
Russell has loved cars since he was a kid. When he was 17, he got his hands on a beat up old Camaro.
- [07:39]
Russell Wickham
I ended up having to remove the entire dashboard and actually rang in New Year's of 1995, putting that dash back in the car. And when I got done putting it all back together, I'm like, I could do this.
- [07:56]
Ryan Knudsen
To become a mechanic, Russell first had to go to automotive school, which can cost tens of thousands of dollars. Then he had to build up his set of tools, literally. Mechanics need to buy their own tools, even if they work at a dealership. And that's not cheap. The toolboxes alone can cost ten grand. Once Russell was finally up and running as an auto mechanic and had a job at a GM dealership, he was kind of surprised by the way he was paid the flat rate system.
- [08:28]
Russell Wickham
My first reaction was, that's weird. So I didn't really understand how flat rate worked until I was in the dealership, you know, and I'm, I'm just learning how to do my job. And I worked 40 hours and my first paycheck was 20 hours. And it's like this, this is a problem.
- [08:49]
Ryan Knudsen
The flat rate system is great when you're good, but it can also be a burden, especially when you're just starting out.
- [08:56]
Russell Wickham
You might be earning, let's say $26 an hour, but when you sit down and you look at the mix of work that you've got and calculate how many hours you were in the building versus how much you'd been paid, and you come out with a figure that looks more like $16.36, you start to question your decisions. A manager at McDonald's makes what, 18, 20 bucks an hour or more? And they don't have to work nearly as hard as a flat rate tech does. So it becomes tempting to walk away because the reward just isn't there.
- [09:34]
Ryan Knudsen
But Russell didn't walk away. And eventually his paychecks got bigger.
- [09:39]
Russell Wickham
You know, over. Over time, you learn and you can get faster. And if you're specialized, you know, you're doing pretty much the same thing every time, you become much better at it.
- [09:50]
Ryan Knudsen
Russell says the most he's ever earned as a mechanic was $89,000. What's the lowest? Do you recall what the lowest year was that you made?
- [09:59]
Russell Wickham
26,000.
- [10:03]
Chris Otz
Experience really pays in this job. The ability to turn work faster is the entire source of money in this job. But even with a lot of experience and doing the same job a bajillion times and getting good at it, the cars change, the jobs change. They need to adjust to new products and the changes that the factories make. So even a mechanic with 10 years of experience has to sort of start from zero. And just as you get good at it, the physical toll starts to, you know, really affect your ability to be productive.
- [10:47]
Ryan Knudsen
On top of that, automakers have to pay for warranty repairs and safety recalls. So they're always looking for ways to reduce the number of hours that a job pays.
- [10:57]
Chris Otz
There are even people whose whole profession is to audit the work that the dealerships do to find efficiencies and make sure that the number of hours that such and such job pays is not out of line with how many hours it actually takes to do that job. One technician told me that technicians are even reluctant to share in forums, online forums, that they're on tips and tricks because they think that the factories might be in those forums as well and might catch on when they're, you know, they've got a job that pays three or four hours that they can do in 30 minutes. And it's like, you know, money in the bank if they get this kind of work.
- [11:43]
Ryan Knudsen
Right. But if you're the automaker, you're thinking, oh, we shouldn't be paying three hours, we should be paying 30 minutes.
- [11:49]
Chris Otz
Exactly.
- [11:50]
Ryan Knudsen
That's kind of incredible, though, actually, because, like, one of the incentives for the auto mechanic is that if you're good at your job, you can do it faster than what it pays. But if the automaker finds out, then they might reduce the hours. So it's like a cat and mouse game almost.
- [12:03]
Chris Otz
It absolutely is. And so the trick is to stay ahead of that.
- [12:10]
Ryan Knudsen
A spokesman for GM said, quote, our dealership technicians are at the heart of the customer experience and critical to dealer profitability. Ford said it pays fair labor rates and that its technicians have a chance to earn well above the industry average. For Russell Wickham, Like a lot of mechanics, staying ahead of that cat and mouse game can be really hard. That's next.
- [12:43]
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- [14:16]
Ryan Knudsen
Our colleague Chris Otz says there's a lot of factors outside a mechanic's control that impact how much they're paid. And I should note we're focusing on mechanics who work at dealerships. Pay structures at independent repair shops can vary. For mechanics at dealerships, they generally only earn money when there's cars to fix, so paychecks can shrink during slow periods.
- [14:39]
Chris Otz
In some shops, they are not as good at bringing work in the door, or there are issues about divvying up the work in the most efficient way, or giving people jobs that they will succeed in and be able to turn a lot of hours. The mechanics are the ones who bear the risk of the variability in work.
- [15:09]
Ryan Knudsen
And then there's the flat rate system. For Russell, that system is what ultimately pushed him over the edge. By 2023, his rate had gone up to $42 an hour at a dealership in Texas.
- [15:22]
Russell Wickham
I had a Trailblazer that one of the pistons had split in half and it wiped the block out. So that's an automatic engine replacement.
- [15:34]
Ryan Knudsen
That job. Russell said it paid a little over 10 hours. But Russell hadn't replaced an engine on this type of Chevy Trailblazer.
- [15:42]
Russell Wickham
Before I get the new engine out of the crate and I get the old engine on the stand, and I'm comparing the two, and there's turbocharger, there's coolant pipes, there's oil feedback pipes.
- [15:57]
Ryan Knudsen
Russell knew that he would have to replace some of the parts within the engine injectors.
- [16:01]
Russell Wickham
There's a fuel pump with single use pipe.
- [16:06]
Ryan Knudsen
But he said he had no way of knowing which ones or how many until he actually got in there. And when he did, Russell realized that the job required a lot more work than he was expecting.
- [16:21]
Russell Wickham
So I get everything back together, and I'm nineteen and a half hours into it.
- [16:26]
Ryan Knudsen
Nineteen and a half hours when the job paid ten. In situations like these, mechanics can sometimes file for extra pay. But when Russell asked for that, he said his request was denied.
- [16:39]
Russell Wickham
And it kind of broke me. That was the point where I decided that I was going to leave the dealership world and do something else.
- [16:52]
Ryan Knudsen
Why did it break you?
- [16:56]
Russell Wickham
You know, when you have to go home and look at mama and say, honey, I had another bad week. We're going to have to make the grocery stretch. We got enough for some rice and beans, and that's what we're going to eat for the next week. I had a bad week. You know, how many times do you do that before you. You just say, I got to do something else.
- [17:24]
Ryan Knudsen
After that happened, Russell quit his job at the dealership. If this shortage is such a big deal, what is the industry or the automaker is doing to try to alleviate some of these issues and make it more attractive?
- [17:38]
Chris Otz
You see some deviation from the flat rate system, but not many, because that's just the way the world works in this industry. I think if the shortage continues and if it really matches the rhetoric that we hear about it, it would be natural to expect that there would be more attempts to have a different kind of pay model, or at least some guarantees. But so the common things that are done are apprentice programs like the one at the dealership, certain scholarships, you know, to get started, but they're not uniform. You know, these. None of these initiatives are particularly new or novel. And we're still kind of in this place where there's a lot more people retiring and leaving this profession than coming into it.
- [18:38]
Ryan Knudsen
So we started this conversation Talking about, like the reaction to this idea that there's all, there's this really high paying job and there's a shortage and sort of what's wrong with America? What's your takeaway? What should people make of this situation where there's this shortage of what on its face looks like a lucrative career?
- [18:58]
Chris Otz
You know, I asked Ted that question. Cause we were talking like, he's a great teacher. It's clear his apprentices love him.
- [19:07]
Ryan Knudsen
Chris is talking about that superstar mechanic we heard about earlier, Ted Hummel.
- [19:11]
Chris Otz
And I said, you know, how many apprentices have you had? I don't know, 20, 30. Like he hadn't kept count. I said, how many are still in the business today? And he said, maybe four, five.
- [19:24]
Ryan Knudsen
Really?
- [19:25]
Chris Otz
That I can think of. And I said, ted, why? And he said, it's not hard to understand. It's a really hard job. That's the reason that there's a shortage. I mean, you have a physically demanding job that takes a lot of upfront investment to which there are no guarantees about how much you will earn. I think technicians realize these trade offs and a lot of them have figured out other things to do. I heard a lot about, you know, people who get started with it and then an H Vac company hires them. The flat rate system works incredibly well for a certain few like Ted, but does not work extremely well for many other people. So I think it is the realities of this particular job and how it is compensated that's the reason that there's a shortage as opposed to some great moral failing of the country.
- [20:38]
Ryan Knudsen
Ford says it's doing a bunch of things to address the mechanic shortage. The company has 33 technician training centers around the US and it offers scholarships to help with tuition and tools. It has also launched a new apprenticeship program at dealerships across the country in partnership with the U.S. department of Labor. A spokesperson for General Motors said that the company invests in their mechanics careers through training, upskilling and other programs, quote, helping our dealers attract and retain great talent. After quitting the dealership, Russell tried out a few other jobs, including a corporate one. But now he's back at a different dealership. And not because of the pay, but because of the work itself.
- [21:25]
Russell Wickham
There is such a joy in taking something that comes in running like garbage. And you, you feel the engine run, you listen to it, you start to understand what is ailing it. You, you dig into it. You can confirm your hypothesis or disprove it, and then you develop a new one, but you figure out what's wrong. With it and you go in and you change out the broken part and put it all back together and you hear it fire up and it's running perfectly. It's just. Oh, that's just such a thrill.
- [22:18]
Ryan Knudsen
That's all for today. Thursday, April 16 the Journal is a co production of Spotify and the Wall Street Journal. If you like the show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow. Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same Premium Wireless for $15 a month plan I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to do@mintmobile.com Switch upfront payment of $45 for three month plan equivalent to $15 per month
- [23:01]
Chris Otz
required intro rate first three months only, then full price plan options available, taxes and fees, extra fee, full terms@mintmobile.com.