Universal Technical Institute CEO Kimberly McWaters: Graduates start earning $12 to $15 an hour.
Universal Technical Institute Inc. of Phoenix, one of the hundreds of educational institutions that grooms future technicians, has eight campuses nationwide. It is one of the few public companies working with automakers and dealers to fill these jobs.
Upon completion of a Universal Technical auto or diesel program, qualifying students can enroll in one of its 22 manufacturer-sponsored advanced training programs. CEO Kimberly McWaters spoke in July with Staff Reporter Ralph Kisiel about the technician shortage and other topics.
What's driving the technician shortage?
Primarily the majority of their work force is baby boomers, and they are looking to retire. The baby boomers are intimidated by the new technology, and they were kind of happy being wrench turners. But now they've got to be computer diagnosticians and technicians. So the skill level has increased significantly, and it's just driving this huge skill obsolescence throughout the work force. Instead of some of the older technicians going back to school and becoming skilled in this area, they are opting to leave the industry. We just have not been able to refill or replace those openings as quickly as they are leaving.
What role does Universal Technical play in alleviating the automotive technician shortage?
Last year we graduated about 4,000 auto technicians. This year we'll grow, adding probably 700 to 1,000 more by the end of this year. Our primary focus is to expand our national footprint to match that against the dealer demand.
Do students pay their own tuition? Do dealers and automakers help?
It's both. Typically we'll enroll a student to go into our undergraduate program, and they'll spend roughly 15 months with us in school. Their tuition's somewhere in the mid-$20,000s. They will apply for federal grants and loans, like any student going to any college. Once the student graduates, because they are in such demand, a number of employers who hire them agree to make their student loan payments - basically $150 a month. We found that it's a great recruitment tool for the dealer and a very strong retention tool.
How many students go on to enroll in the manufacturer-sponsored advance training?
The top students, roughly a third of our graduates coming out of the automotive program, are then accepted into these manufacturer-specific, advance-training programs. We have programs with BMW, Audi, Volkswagen, Mercedes-Benz, Ford - a number of them.
How long do the advanced training courses last?
Typically those programs can range anywhere from three months to six months. And the tuition for those is paid entirely by the manufacturer. Dealers are in such need of these technicians that they are often having to hire people off the street or right out of high school who absolutely have no training. It takes them a long time to become productive.
Universal Technical Institute has programs that teach students to repair specific brands such as Mercedes-Benz.
Is it difficult to recruit high school kids?
We're trying to change the stereotype. Mom and Dad probably didn't have a dream when Johnny was born that he'd become an automotive mechanic. We're trying to turn that stereotype around - informing parents that their son or daughter could choose this path, and with 15 months of training and a few years of experience, are able to earn at least the same level as somebody with a bachelor's degree.
What does your typical student earn at a dealership?
Typically they are going to start at about $12 to $15 an hour. Often within 90 days we'll see it jump to $15 to $18 an hour, especially if they are coming out of the advance training programs. We've got over 70,000 graduates out there in the history of our company. So we have anywhere from the low end of the spectrum to well over $100,000.
Who is your competition?
Our main competition would be community colleges. It's basically just cost and convenience. Students are able to go right down the street. They don't have to relocate. There's also Wyoming Technical Institute, owned by Corinthian Colleges Inc., which is publicly held, and the private Lincoln Technical Institute.
Why did Universal Technical go public late last year?
We were basically servicing our debt vs. investing back into our business. That was the primary reason that we did it. The second was to attract top talent, to be able to compete effectively with today's labor force.
What are your revenues?
About $250 million this year. We've been having better than 20 percent year-over-year growth.