Going blue-collar

Where are you and where are you going?
HSpencer
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Post by HSpencer » Fri Nov 05, 2010 1:45 am

Job information on Auto Mechanic
http://www.bls.gov/oco/ocos181.htm


Stahlmann
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Re: Going blue-collar

Post by Stahlmann » Mon Jun 03, 2019 4:08 pm

don't steal jobs from Eastern Europeans after they stole your jobs after you opened borders for them! :evil: :lol:

SavingWithBabies
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Re: Going blue-collar

Post by SavingWithBabies » Mon Jun 03, 2019 8:23 pm

I don't recommend police officer. One of my siblings is one and they are about 2/3 of the way to full pension. They are having a hard time recruiting right now and people are leaving so there is plenty of opportunity. There is indeed room for overtime (some of the shifts more than others). But as you work your way up, you have to choose if you want to apply for higher positions or have one of your coworkers go for it (do you want that coworker to manage you? if not, you might put in for something you don't necessarily want that much just to avoid having that coworker above you). Then there is the administrative staff that typically have all kinds of hijinks going on with poor management and questionable decisions including knee jerk reactions to politically connected complainants.

On top of all of that, there is a lot of sitting on the job. You have to be conscious about exercise and health. If you slip up, you get fat, have high blood pressure due to all the stress. And as @jacob pointed out, you deal with the dregs of society day in, day out. Those are the people you associate with for better or worse. And I too think it jades you (as does my sibling who is the officer).

Another factor to consider is that you can work your way up in a department but if you want to relocate (in state), you start over in rank. If you want to relocate out of state, your pension is going to reset (maybe some states have reciprocal agreements but I haven't heard about that at all). So if you want to get your pension in, you have to stay in that state for your full career. And if you want to work your way up (and not start over in rank), you have to stay at that department for your whole career.

Edit: just realized this thread was from 2010 until the most recent response. Nothing wrong with that I guess. It's interesting to read it in that context. The skilled trades (electrician, plumber) would have been good and people that went into that would maybe be at the point they could be starting their own business doing that work after 9 years? I think the biggest thing about any of this is picking something, making a plan to do it and executing the plan. We all have bumps and changes along the path but doing something, anything, seems better than not taking action.

Sclass
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Re: Going blue-collar

Post by Sclass » Mon Jun 03, 2019 8:47 pm

I think you should do some homework. I like the YouTube channel HumbleMechanic.

A lot has changed in that business over the years. I meet a lot of young mechanics with a debt to Snapon Diagnostics because they invested in the digital scanners needed to work on today’s cars. Cars don’t fail the same ways they did twenty years ago either. Leasing has also changed the landscape tectonically as lease deals include service.

The car landscape is in flux right now. Be careful of the usual assumptions about the industry. My gut is the opinions in this thread are uninformed and basically assumptions based on taking a personal vehicle into the shop and paying a bill...but I may be wrong. It just looks like things have changed a lot recently for mechanics. In the twenty years I’ve played around on the sidelines (and on the field as a diagnostic tools designer) I’ve seen big changes. Things like leasing, ride sharing and self drive are going to really mess up a business planned during peak car.

I would do some homework first.

Gilberto de Piento
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Re: Going blue-collar

Post by Gilberto de Piento » Wed Jun 05, 2019 10:59 am

I think there is going to be a lot less car mechanic work also due to the switch to electric. Many of the systems that need maintenance on gas cars don't exist in electric (example: exhaust) and the systems that replace them are very low maintenance.

Same for anything with a small engine, like lawn mowers.

Sclass
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Re: Going blue-collar

Post by Sclass » Wed Jun 05, 2019 3:52 pm

Exactly. I like to watch the YouTube channel Rich Rebuilds about his restoration of wrecked Teslas. They clearly don’t wear out in the same ways. They don’t seem to wear much at all. Brakes last a long time. The biggest maintenance items seem to be tires which get roasted by the high torque.

The guys doing the most critical work are rooting the boards and bypassing Tesla security so they can actually fix the electronics.

Change is afoot.

SavingWithBabies
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Re: Going blue-collar

Post by SavingWithBabies » Sun Jun 09, 2019 10:46 am

I get the argument against going into a car mechanic now however I don't quite buy it. First off, the thread started with a job that you could get into quickly and make good money and I think that is still good for being a mechanic. Second, as we're going for ERE here, I think it's not bad if the outlook for the job might be shorter than longer (as is argued above with changes in the industry). If one doesn't finish accumulating money and needs to make more, yes, a pivot in jobs might be needed but I still think if one is doing ERE there is definitely 10 years left in being a mechanic.

I think the argument that the automotive industry is moving to electric is overblown. How many vehicles are on the road today? How many are electric let alone hybrid? There is going to be demand to work on the existing fleet of vehicles for at least a decade and I would guess more than that. So I think mechanic, if you are already inclined in that direction and have some skill or interest, is not a bad way to go today assuming you're looking at the shorter timeline not the longer one (or are prepared to bust you ass so when things start contracting, you are out on your own shop or doing something that leaves you still working if you need to be). And change is opportunity -- another way to go would be to focus on the new and become really good at that. But Tesla is like Apple in that they don't want you working on your own things so it might be a little early to get into that side of things unless you're doing it as a hobby/youtube revenue stream.

I just realized the above is the same paragraph written twice with slight differences but I'm having a hard time editing it down so please excuse my repetitiveness.

unemployable
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Re: Going blue-collar

Post by unemployable » Sun Jun 09, 2019 11:15 am

Mechanical things are always going to break, need maintenance or wear out. Capitalism continuously serves to reduce the frequency at which these things happen, but cannot repeal the second law of thermodynamics. I'm not worried car mechanics will be losing their jobs anytime soon. It's a counter-cyclical business if anything.

Campitor
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Re: Going blue-collar

Post by Campitor » Sun Jun 09, 2019 12:06 pm

Regarding the firefighter recommendation, I have a close friend who retired from being a firefighter because of PTSD. Running into a burning building and pulling out a burning body or a young child whose face is half melted will give you nightmares for days on end. And firefighters are often called to traffic accidents and have to pull out mangled or decapitated bodies from the most heinous wreckages. And you also get the joy of breathing in all those nice carcinogenic fumes that results from melting PVC pipe and PVC siding. And let not forget the 900+ Fahrenheit temps you have to deal with.

I recommend the following trades:
  1. Carpenter. The barrier to entry is low and you can do a wide variety of work from regular handyman stuff to more complex projects except for homebuilding which requires an apprenticeship with a licensed homebuilder.
  2. Electrician. You need to apprentice but the job isn't as physically demanding as a carpenter unless you're doing commercial grade work.
  3. Plumber. You need to apprentice with a licensed plumber. But boy does this profession get work. You can get away with delaying electrical/carpenter repairs but there is no delaying a backed up waste pipe, a busted water heater, or a busted water pipe. The volume of work you get in a major city is great - lots of plugged crappers but it's the dirtiest of jobs you'll probably every do. You can't be squeamish about getting human feces splattered on your work clothes - there's a reason plumber carry those disposable hazmat suits in their trucks. Decaying hair balls or rotting food grease isn't a joy either. But the money is awesome if you work fast, smart, and hard. Snaking out a fecal pipe is quick and you're off to the next job - unclog 5 to 10 pipes a day 5 days per week and your bringing home bank. Changing water heaters earns big bucks too.
  4. Welding - I've never worked in this field but I hear that it's in high demand with not enough qualified workers available internationally or locally - must be willing to relocate - welders have to follow the industrial projects. The 1st three have potential to dovetail into "house flipping/rental investment".

Sclass
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Re: Going blue-collar

Post by Sclass » Mon Jun 10, 2019 7:45 am

I’ll revise my opinion of auto technician based on the posts above. I’m not a professional so I really don’t know the ins and outs of doing this for a living. There are some really big differences between working for a dealership, working for a municipality (fixing police cars), working at an independent and being a sole proprietor independent. So one thumbs up or down doesn’t really cut it.

The point about being a job that only requires a 10 year horizon is spot on. If we are talking ERE, yes, it probably doesn’t matter what happens because the existing vehicle inventory won’t change that quickly.

As for things that wear out, as an avid hobbyist mechanic I can say what breaks on cars has changed dramatically over the last decade. Materials and lubricants are getting better. Also HALT testing and simulation are letting manufacturers design in obsolescence more accurately than before. Many parts last the lifetime of the car...and just that. This was not the case a decade ago.

I have two friends who operate independent shops. They mostly diagnose and replace electronics. They are tricky guys. They know exactly which modules have problems and they rebuild broken circuit boards and swap them back into customers’ cars. Their shops look more like pcb assembly factories than car repair places.

The game has morphed into this diagnostic scanning and electronic module swapping game. My friends are very profitable because they beat dealer rates by using their refurbished modules. BTW neither of these people are trade school trained. College dropouts. Went into business in their 20s as techs and auto salvage guys. Now they’re blue collar millionaires running family operated businesses. Like everything we talk about on this forum there are a lot of variables the outcomes depend upon.

So I take back what I say. If you want to start making money for the next ten years without much training become a mechanic. I’d go further and say forget the training, go to the library and read service manuals, get some tools at Harbor Freight, become a mobile mechanic.

The big oil industry trade rags argue that EVs adoption will be slow. I really don’t know. I just jumped over to a Li Ion powered chainsaw and I’m a convert. I think if costs go down the superior technology will win over quickly.

jacob
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Re: Going blue-collar

Post by jacob » Tue Jun 11, 2019 5:50 pm

Slight derail ...

Currently most of the "undervalued" companies in my investment screen are automobile suppliers of various bits and parts. But what's the story here? I can think of three.

1) They're a casualty of the tariff shenanigans seeing as a lot of manufacturing happens globally. Cars in particular seem to derive a lot from Canada and Mexico. This suggested a politically constructed structural problem that will go away as soon as normal economic relations are restored.

2) Young people are just not very into cars anymore. With ever increasing urbanization (And Uber), it just doesn't make as much sense to own a car anymore.

3) Electric cars are taking over and smart investors have noted that EVs used far fewer parts than gassers + the EV companies seem very vertically integrated (kinda like Apple) making it tough for OEMs.

Bonus question: Insofar those car part manufacturers would start making something else, what would it be?

Campitor
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Re: Going blue-collar

Post by Campitor » Tue Jun 11, 2019 6:34 pm

jacob wrote:
Tue Jun 11, 2019 5:50 pm
Bonus question: Insofar those car part manufacturers would start making something else, what would it be?
Considering they have the molds and facilities for stamping out parts, I imagine they would transition to making parts and accessories for Electric Vehicles and the coming self driving delivery cargo trucks. I imagine the wear and tear of having self driving vehicles operating constantly will increase the demand for parts that are either vandalized, worn, or broken. Plus they can transition to making parts for self flying vehicles that are on the horizon.

unemployable
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Re: Going blue-collar

Post by unemployable » Tue Jun 11, 2019 8:29 pm

Jacob: Not sure whether you're looking at suppliers to new cars exclusively, or aftermarket parts and auto parts stores, but car repair is counter-cyclical. When the economy is good people replace their cars more often; when it's bad they try to make their cars last longer through maintenance and repair. Or move down the spectrum, from taking it to a shop to doing the work themselves. Auto parts stores in particular do gangbusters in recessions.

Sclass
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Re: Going blue-collar

Post by Sclass » Tue Jun 11, 2019 11:41 pm

jacob wrote:
Tue Jun 11, 2019 5:50 pm
Bonus question: Insofar those car part manufacturers would start making something else, what would it be?
Parker Hannifin and Eaton were able to reinvent themselves twenty years ago. They started out as car and truck parts manufacturers and morphed into industrial conglomerates that serve the automotive, aerospace, automation and medical industry. Mostly through acquisitions if I recall correctly.

It really depends on the business leadership. There are companies that go for years and years selling car parts successfully. Dorman inc comes to mind. They sell to the aftermarket so they are counter-cyclic to the automotive industry. At least the theory says that people buy and fix used cars in bad times. So it really depends on which specific businesses you are looking at.

My friend at Denso says that they have branched out into The aftermarket. They wanted to diversify out of their once captive market with Toyota. Now you can buy Denso parts at Autozone for OE applications that never used Denso.

The same guy says that new car leasing has been on a tear for years and it has hurt component sales for repair. The fleet is new and the components don’t need replacement like they did a decade ago...on average. Better materials and simulation allows planned obsolescence to be more accurately engineered.

All of this is exacerbated by the fact we are deep in the second half of the latest cycle. Recently I heard a stock presentation that said industrials are slow now because of where we are in the cycle. They apparently do well in the early half and wane in the late half. Auto components get lumped in to this category. I’m not sure if they are good deals right now. I’ve held things like Parker and Eaton for decades through their ups and downs. They’re good long term investments.

Sclass
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Re: Going blue-collar

Post by Sclass » Tue Jun 11, 2019 11:48 pm

unemployable wrote:
Tue Jun 11, 2019 8:29 pm
Auto parts stores in particular do gangbusters in recessions.
As an investor in Dorman, CSK group and Autozone I’ll say this is a myth. I hear it all the time year after year but it just isn’t true. Makes a good story though. My strategy to just hold these stocks for a long time, recesssion or boom, has worked well for me.

Jason
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Re: Going blue-collar

Post by Jason » Wed Jun 12, 2019 5:41 am

jacob wrote:
Tue Jun 11, 2019 5:50 pm
Bonus question: Insofar those car part manufacturers would start making something else, what would it be?
Meet George Jetson.

https://www.cnet.com/news/how-uber-is-g ... he-ground/

Ego
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Re: Going blue-collar

Post by Ego » Wed Jun 12, 2019 5:58 am

The transition to electric and self-drive could be lucrative for parts manufacturers who specialize in parts to retrofit older vehicles. Think vinyl record boom only with $100K VW Beetles and $250K Land Rovers.

https://www.zelectricmotors.com/available
https://www.youtube.com/watch?v=IGjOY4JBmy4

unemployable
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Re: Going blue-collar

Post by unemployable » Wed Jun 12, 2019 6:32 pm

Sclass wrote:
Tue Jun 11, 2019 11:48 pm
As an investor in Dorman, CSK group and Autozone I’ll say this is a myth. I hear it all the time year after year but it just isn’t true. Makes a good story though. My strategy to just hold these stocks for a long time, recesssion or boom, has worked well for me.
Well, let's look at AZO...

More than tripled from mid-2000 to mid-2002, when the SPX dropped some 50%
Dropped about 40% peak-to-trough in a couple months in 2008. It recovered by Feb 2009 (while the SPX had yet to hit is 3/9/09 low) and surpassed its 2007-08 highs for good by November 2009. The SPX didn't surpass its 2007 highs until spring 2013 (going OTTOMH on that).

CSK is now ORLY. I can only look up ORLY stock, but it behaved pretty much the same as AZO did, actually 2000-02 was better.

DORM bottomed out in late 2000 last than most of the others, but had quadrupled by mid-2002It dropped some 30% between late 2007 and late 2008, but got it all back by mid-2009, and by late 2009 again passed its 2007 high for good.

GPC looks pretty much the same, took longer to come back after 2008, but still beat the SPX to new highs by some 2½ years

Source for all this is eyeballing charts on Yahoo Finance. I don't have a Bloomberg and still feel like I should get paid to do stock research for other people.

So I'm not seeing this claim. They were incredible buys at the bottom, and better-than-most-other-things buys at the pre-recession tops.

I certainly agree they are great buy-and-holds. When they go bad it's usually an episode like the late 1990s, when no one liked value stocks. There is of course always single-stock risk, although most chains seem to get acquired rather than go out of business.

Sclass
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Re: Going blue-collar

Post by Sclass » Thu Jun 13, 2019 12:20 am

Youre right. I’m talking about something I remember back testing in 2000. Pep Boys I think. Damn I’m old and full of shit. Ancient history. I’ve owned AZO 20 years and I haven’t paid much attention to when it went up. I just know it did go up kind of steadily. It kind of defies reality.

Sclass
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Re: Going blue-collar

Post by Sclass » Thu Jun 13, 2019 9:57 pm

Sorry to side track the thread, but the AZO results I discussed kept gnawing at my mind today. It bugged me enough to make me stop what I'm doing and dig through some old data. I think we are mixing up AZO stock performance and auto parts sales performance during downturns. Obviously AZO has done very well. I know, I invested in it twenty years ago and still own it. I have a pile of annual reports that tell a glowing tale of earnings growth and rising EPS every year. And the stock has gone up. It goes up in recessions as @unemployable said, and it goes up even more after recessions. It just goes up and up. And that has always bothered me because I know there is nothing magical about their stores. The number of parts sales cannot grow like that.

To clarify, the myth that I believe is still a myth is that some analysts have this theory that when times are bad, regular folk start fixing their own cars and that drives up the price of auto parts manufacturers and auto parts store stocks. Nice story. But there are other things that move price. I think if I thumb through the AZO reports what jumps out at me is the price of the stock was driven by rising earnings - recession or not.

First the management of AZO consolidated the industry. They bought up most of the mom and pops and turned them into Autozones. It shows in the yoy store openings in the reports. O'reilly followed their playbook but later in the game. CSK suffered up till that point when the O'reilly management pointed the ship in that direction. To me it looks like these companies grew their earnings by efficiently taking over the business. Basically two companies own most of the pie. Companies like Pep Boys got left behind. Same business, different equity strategy. What I'm getting at is we are mixing up the ticker with the actual sales of parts.

Second, this buying spree also coincides with an era of low interest rates. Companies can borrow or use their profits to buy their own shares efficiently. Autozone is the posterchild of buybacks. Again, it is very obvious from twenty years of reports watching their earnings per share skyrocket while their same store sales were flat, falling or rising modestly.

So that brings me to the point of "Auto parts stores do well when the economy is bad because folks fix their cars by themselves." I've plotted same store sales along with the last few recessions. I had to do this old school because it isn't on Yahoo! finance. There is a blip in 2001. And prior to that, same store sales went up regardless of recession or not. From reading the reports, it looks like shrewd business decisions drove sales, such as making a parts courier service for independent shops. During this period the mix of car cosmetics and actual car parts shelved has moved back and forth. Also note that their strategy seemed to flatten out after the first few years. At the end of the day the changes on the y axis aren't all that big.

I see this as a stock picker and as an automechanic. When people have no money, they don't head to Autozone. They just stop fixing their cars. I call it the bald tire indicator. People drive longer on what they have. Because they're dumb and lazy. That may be what is happening in the longer recession on the far right where the same store sales look flat.

Image

After listening to twenty years of the CEOs making excuses for weak quarters, it seems that a lot of the ups and downs in same store sales are just caused by smart business changes or screwups like installing a new parts ordering database that didn't work well for a couple of quarters. They blamed a blip a year ago on tax rebate checks coming earlier than the printing of their flyer. That's how silly the customer is. I don't see these people saying, "oh man, we just went into recession, I think I better change my own oil." They just don't change their oil.

So who cares? Right. If the stock goes up that's all that matters at the end of the day. But I think this is a quirk of our times. Auto parts businesses didn't always do this. We didn't have two chains dominating the business. And AZO is an insane buyback story. Does it really matter? I guess this is one of those times when it is better to be lucky than right. I've won on a lot of equities for the wrong reasons. But I'm way too embarrassed to say anything else but "I meant to do that!"

My final thought on this is unrelated to the biz. I'm shocked at how many stock price charts look like this. Some people (the 1%?) have gotten very rich. I wonder what is going to happen if this keeps up. It is disturbing and makes me wonder if I'm just holding a bunch of paper chits that can go right back to where I got them...for pretty much nothing.

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