Why People Aren't Lining Up for This $120,000 Job

0:05Ryan Knutson:There is a problem in the auto industry. There are not enough mechanics. The CEO of Ford, Jim Farley, has been outspoken about it. It's a very serious thing. We do not have trade schools. We are not investing in educating a next generation. This is Farley on a podcast late last year. Those jobs are out there. 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. 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 it.

0:53Ryan Knutson:According to a trade group, There's an annual shortage of 37 ,000 mechanics across the industry. Here's our colleague Chris Otts. 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 almost like this moralistic reaction. With the government, with education, I think we can solve this. But we have a lot of work to do.

1:38Ryan Knutson:But our colleague Chris says that when you actually look at what the job 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. Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudsen. It's Thursday, April 16th.

2:24Ryan Knutson:Coming up on the show, why people are not lining up for this$120 ,000 job.

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3:44Ryan Knutson:To get 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. Showed up about 7 a.m. It was still kind of dark outside, kind of cold. And come in the shop and, you know, 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. 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.

4:33Ryan Knutson:Chris saw him in action. So these F-150s have a problem with harsh shifts, harsh engagement, harsh reverse. 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, so I ordered a transmission for this. It needs a whole new transmission. Yeah. Okay. Yeah. Okay. The way mechanics get paid is a little funky. It's something known as the flat rate system. With Flatrate, 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.

5:21Ryan Knutson:And the job he was working on that day, replacing the transmission of a Ford F-150, had a preset pay of about 10 hours. 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? Okay. Regardless of how long it takes. Yep. Okay. Gotcha. Ted is effectively going to get double his hourly rate or almost because he's doing a 10 hour job in five hours. I mean, when I've done so many of these, I haven't even opened the workshop manual. Like when you first do it, you got to walk back and forth or have something on your toolbox.

6:07checking each step, so it takes a lot more time.

6:10Ryan Knutson:Yeah. 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? 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, dealership 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.

7:04But it is certainly not typical of a average mechanics experience in this job.

7:13Ryan Knutson:The experience of most mechanics is more like that of a man named Russell Wickham. You know, when Ford says that they can't find people at$120 ,000 a year, I just hung my head, shook it, and then started laughing.

7:31Ryan Knutson:Russell has loved cars since he was a kid. When he was 17, he got his hands on a beat-up old Camaro. 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. 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$10 ,000.

8:17Ryan Knutson: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. 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 just learning how to do my job, and I worked 40 hours, and my first paycheck was 20 hours, and it's like, this is a problem. The flat rate system is great when you're good, but it can also be a burden, especially when you're just starting out. 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.

9:18A 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.

9:34Ryan Knutson:But Russell didn't walk away. And eventually his paychecks got bigger. You know, 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. 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? $26 ,000.

10:03Experience 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 like 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.

10:46Ryan Knutson: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. 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, you know, 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.

11:39And it's like, you know, money in the bank if they get this kind of work.

11:43Ryan Knutson:Right. But if you're the automaker, you're thinking, oh, we shouldn't be paying three hours. We should be paying 30 minutes. Exactly. 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. It absolutely is. And so the trick is to stay ahead of that. A spokesman for GM said, quote, our dealership technicians are at the heart of the customer experience and critical to dealer profitability.

12:17Ryan Knutson: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.

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13:48Ryan Knutson:Our colleague Chris Otts 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. 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.

14:40Ryan Knutson: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. 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. That job? Russell said it paid a little over 10 hours. But Russell hadn't replaced an engine on this type of Chevy trailblazer 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 feed pipes.

15:28Ryan Knutson:Russell knew that he would have to replace some of the parts within the engine. Injectors, there's a fuel pump with a single-use pipe. 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.

15:52So I get everything back together and I'm 19 and a half hours into it.

15:57Ryan Knutson:19 and a half hours when the job paid 10. In situations like these, mechanics can sometimes file for extra pay. But when Russell asked for that, he said his request was denied. and um i it kind of broke me i um that was the point where i decided that i was i was gonna leave the dealership world and do something else why did it break you

16:27you 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. Just, I had a bad week. You know, how many times do you do that before you just say, I got to do something else?

16:55Ryan Knutson:After that happened, Russell quit his job at the dealership. If this shortage is such a big deal, what is the industry or the automakers doing to try to alleviate some of these issues and make it more attractive? 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.

17:51You know, 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.

18:09Ryan Knutson: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 a shortage of what on its face looks like a lucrative career? You know, I I asked Ted that question because we were talking like he's a great teacher. It's clear his apprentices love him. Chris is talking about that superstar mechanic we heard about earlier, Ted Hummel. And I said, you know, how many apprentices have you had? I don't know, 20, 30, like he hadn't kept count.

18:49I said, how many are still in the business today? And he said, maybe four, five. Really? 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 tradeoffs 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 HVAC 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.

19:54So 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.

20:10Ryan Knutson:Ford says it's doing a bunch of things to address the mechanic shortage. The company has 33 technician training centers around the U.S. 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.

20:42Ryan Knutson:After quitting the dealership, Russell tried out a few other jobs, including a corporate one. But now he's back at a different dealership, not because of the pay, but because of the work itself. There is such a joy in taking something that comes in running like garbage. And you feel the engine run. You listen to it. You start to understand what is ailing it. You dig into it. You 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.

21:36It's just, oh, that's such a thrill.

21:49Ryan Knutson:That's all for today, Thursday, April 16th. 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.

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