AINsight: Don't Judge a Shop by Its Size

 - November 2, 2018, 11:06 AM

Over the years I have gone back and forth about my feelings regarding smaller independent maintenance facilities for pre-purchase inspections of pre-owned business aircraft. My attitude was that an independent facility without a direct connection or endorsement from a major OEM was maybe just not the right place to go. My maintenance experience is mostly based around the pre-buy inspection. There are of course two sides to that event visit—you are either the buyer or the seller, and you are clearly aligned with one or the other side of the transaction.

As the buyer, you want the most experienced hands on deck who understand the nuances and intricacies of the inspected aircraft type. There is no room for error since once you close, since the “as-is where-is” clause can be final.

As the seller, you want to be sure the buyer gets a balanced view of the aircraft; however, if you could have lower labor rates due to what could be a lower overhead from the facility, that would fit you better. The fear I always had concerned engineering and a smaller shop's ability to have first-tier access to the engineering criteria and repair input on a timely basis. Also, would the manpower that needs to be assigned to a project be readily available? Does it have the resources for parts procurement?

These and other questions have kept me away both as a buyer and a seller. I am rethinking this, though. Part of what is causing me to take a fresh look at these facilities is aging aircraft. If we are representing a $2 million Hawker, a pre-buy that can create a bill for a seller that is as much as 25 percent of the purchase price can be a hard transaction to get across the finish line.

I am not suggesting going to a small shop to hope they miss expensive findings. It is to be able to find a shop that might build a more targeted work scope and have labor rates up to 30 percent less than the big-box shops, thereby eliminating huge bills at the end.

And I have been pleasantly surprised with the results. In fact, I might add, that just because you have a recognized name across the top of your building does not guarantee blue skies and smooth sailing. These large MRO and OEM facilities do not always bring out the best in the experiences—high turnover and less attentive crews can leave one frustrated and disappointed in the outcome.

There is plenty of room for both the small independent shop and the large OEM facilities. There is no room in these mission-critical situations to compromise or be penny wise and pound foolish. Be prudent and wise in gathering references and understanding what the shops are most noted for.

Just because a shop is large or small does not create a reason to leave due diligence at the door. But it does allow for more choice in the process.

Comments

As a technician that has worked WITH and FOR quite a few maintenance shops, ranging from small mom and pop operations to a few of the biggest CRS's in the country, I agree completely. From my experience, fair out of the door costs come from experienced techs that are efficient and methodical at both troubleshooting and inspections practices. It all really boils down to management and their ability to spot and eliminate poor techs as fast as possible, and keep the good ones as long as they can. Some management at these big shops cant do this because they do not have an in depth and good relationship with the crew leads, technicians etc., nor do they have the man power to have the guts to let someone go who is borderline incompetent. The maintenance sector has been in an employee marketplace for a while now, so most turnover rates are not due to techs getting let go, but techs deciding to leave for whatever reason (mostly to leave for better pay somewhere else). Also the other aspect of a great operation is how much fear/respect the techs have for the maintenance managers. I have seen shops with multiple locations where only one out of three locations are run at high respectable standard. That well ran location's major factor was due to the high expectations and the fear that was put on by the floor management. The fear of getting let go quickly for under performing drove the higher standards in a sense.

If you have great techs and management that doesn't hire too many people that are not revenue producing workers (IE admin, QA and more managers) your bill will be considerably lower overall consistently. A tip is when you go to a prospective shop, look at the manager, QA and admin employee ratio to the technicians. This ratio will signal if their overhead is getting out of hand and will reflect on the bill/ labor rate in general.

Also most people don't know that there is a flat rate billing practice that most shop implement in some situations without telling the operator. Billing a job for a certain amount of hours regardless of how many hours it actually took the tech to do the job. Most of the time this benefits the shop financially. I have seen where they bill from 1% to 100% markup from the actual hours taken to accomplish a certain task.

Its sad to say but there is a big percentage of poor technicians out there that are managed by even poorer management. Its hard to find good techs these days and I hope it changes for the better in the future.

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