The Automotive Mechanic/Service Technician Shortage

Why should new car buyers care about the automotive service technician (formerly known as "mechanic") shortage?

Because the lack of experienced techs is part of the reason some new cars are repeatedly in the shop, sometimes more often than on the street.

Here is the key concept in the debate over whether a technician shortfall exists and to what extent: what matters is quality. The evidence of the shortage is not necessarily a street full of cars going without repairs, it's in the number of late model cars repeatedly visiting the dealer for persisting complaints.

Many of these lemon cars were ok before the first visit to the shop.

One key metric in dealership evaluation is the tenure, experience, and turnover rate of personnel. Service techs are the lifeblood of a dealership. If they leave because of bad management, a weak dealership may never recover.

Today's digital cars live on a lifeline to the computers, Technical Service Bulletins (TSB), recall notices, and knowledge of journeyman techs in the shop. Downloading of software has supplanted mechanical wrenching as autos have gone digital.

Joe's garage type non-franchised service centers find it increasingly difficult to access manufacturer's databases.

Shade tree mechanics are a thing of the past.

Every technician works to get National Institute for Automotive Service Excellence (ASE) certification.

Some shops have zero certified techs.

Dealers who retain quality employees have a right to brag, for instance:

"Our team of twenty-six Ford and/or ASE Certified Technicians, includes several Master Certified Technicians and one Senior Master. They average more than eighteen years of experience and 2,500 hours of specialized Ford training."

Helfman Ford Houston Website

So new car buyers should understand the tech shortage and learn to evaluate a shop before signing a multi-year commitment to a make, dealer, and warranty package.

But in the retail automotive space, approximately 36,000 tech jobs are vacant. The shortage grows by around 6,000 vacancies each year.

Demographic trends, especially the retirement of baby boomer generation mechanics, add to the shortage of car techs.

78-million baby boomers, who start retiring around 2011, cannot be replaced by Generation X, with a mere 45-million workers.

This creates a vacuum, with dealers raiding each other's shops for talent. The overall turnover rate for entry-level technicians is believed to be around 60% annually.

Many shops are employing auto tech school students as interns.

Anyone good enough goes independent. A local mechanic in my home town of Elgin, Texas, turned 9 years as a Certified Ford Technician into the base for his own tire and auto shop. He's been there about 5 years and is contemplating retirement in his early thirties after 14 years of working life. Last time I was in, he had added eight new bays and had an appraisal on the business at $1.6 million.

His biggest headache is the insufficient number of qualified technicians available in the Austin, Texas area.

Well, there's the case against college.

A Negative Image

When I was growing up in the 1960's, boys resembling "Fonzie" from the old TV sitcom Happy Days, who dropped out of high school, went straight to work as a mechanic, bought a Harley-Davidson or a 409-powered Impala, were the hippest cats in my little town.

Not anymore.

Old "grease monkey" stereotypes haunt the technician career. Young people, even the mechanically inclined, avoid technician training.

High schoolers increasingly choose other vocational paths, despite the upward mobility available in automotive technology.

Service technicians work anonymously, but seldom avoid the customer's frustration when things go wrong with a car repair.

The flat rate billing system, based on book hours for every job, keeps scarce techs under pressure to hurry.

Mechanics have traditionally been required to furnish their own tools, which can walk away under their own power when no one is watching.

The average technician owns over $27K worth of tools.

The 2006 technician's salary survey by Brake & Front End Magazine reports the national average for entry level technicians was $25,530.

Average experienced technicians earned $43,941 in 2006, with a range of $32-90K.

Small independent shops, marginal dealerships, and especially truck stops, are going to get squeezed as wages rise. Every good diesel tech I know from my trucking days would prefer to be working in a Mercedes or BMW dealer, they can't wait for the new crop of diesel cars to arrive.

Automotive service work is dirty, involves skinned knuckles and very hard work, and poses serious health risks. The turnover is high, surveys show that over 20% of those working as auto techs would rather do something else.

Average attrition rates for automotive service technicians hover around 15% annually.

Seven out of 10 automotive service apprentices have decided the industry is not for them after the first 18 months of training.

So, like the "Truck Driver Shortage", there is a shortage of people willing to work as technicians in conditions prevalent in the auto servicing business today.

Schools Inadequate

Fonzie probably couldn't fix today's Harleys. My Honda motorcycle has about 15 computer chips and sensors, if one fails, the bike goes on the trailer to Honda's technicians.

The days of apprenticing as a mechanic are over, today's automotive technician requires extensive training and constant ongoing education. With hybrids, fuel cells, and lithium-ion battery plug-in electrics on the horizon, financially stressed dealerships face a crisis.

Costs of new equipment and skilled shop personnel to maintain these new vehicle service technologies will be a factor in the continuing decline in dealership numbers.

Demand for entry level technicians is higher than the current supply of vocational school graduates.

100 percent placement rates for automotive training program grads are common.

The shortage of technicians creates an even greater shortfall of qualified vocational school instructors.

To obtain certification and qualify to repair a particular brand, advanced manufacturer training is needed.

But Toyota's training program graduates under 1000 technicians annually, with GM's school training a similar low number.

BMW's ServiceTechnician Education Program, with around 1,200 graduates in the past six years, must serve dealers that service America's 1.4 million BMW's.

There is irony in the fact that the fastest growing brands are facing the greatest effects of the tech shortfall. Toyota and Lexus, with Houston dealerships exhibiting 30% year over year sales growth, are hard up for service personnel.

"Evaluate Your Dealer Through the Service Entrance"

Poor dealers, (from a consumer's point of view - some "poor" dealers make mega bucks), tend to see employees and customers as expendable. This model has been proven profitable by big box retailers like Best Buy.

Better dealerships are run by team building owners or management who are loath to loose a productive employee or loyal customer.

The best dealerships have high technician retention and recruit more technicians as sales grow.

These dealerships won't have a sales corps with 6 weeks average experience.

Smart consumers know the risks of a big ticket purchase, and observe the dealerships personnel, including the service department technicians and managers, before signing a deal.

The growing shortage of service technicians in the auto industry is a problem that's not going away. Car buyer beware.