Haeco grounded by elite bank jobs that pay more
Despite its No 2 world ranking, the aircraft maintenance company's best days may be behind them with their labour shortages likely to worsen
A shortage of labour is limiting Hong Kong's position in the aircraft maintenance industry even though it is home to the world's No 2 service provider.
Business, August 11
That No 2 ranking in the aircraft maintenance business is a little dubious. It is done on the basis of market capitalisation, which means that any contender must first be a separate listed company. Many are not. Total revenues or maintenance hours would be a better measure.
But Hong Kong Aircraft Engineering Company is still a company that has impressed me right from my investment analyst days when they used to offer us tours at Kai Tak once a year and showed how they had all the equipment to put together a Boeing 747 from the ground up.
Then there was the time that the late Vic Locke, commodore of the yacht club, ran his aluminium-built yacht, Bugis, across a rock somewhere near Port Shelter, and put a kink in it.
The boys at Haeco took it out of the water, put it on the rack, and, "pop", Bugis was all shipshape again. But to everything there is a season and it may just be that Haeco's best days are over, that it just doesn't make sense to have such a big maintenance centre here any longer.
Hong Kong people just don't want the jobs. They want to work in banks and Haeco won't make you rich. In a bank job you have a chance.
As the chart shows, we crossed a benchmark in our employment statistics this year. There are now more than one million job holders with a degree from a tertiary institute of education.
This amounts to 27 per cent of the total employment rolls, a figure that has doubled in just 15 years.
Many of these degree holders slaver for the get-rich-quick bank jobs as they enter the workforce and the large majority of them will be frustrated. Only if daddy maintains US$100 million with the bank is son or daughter guaranteed a job there.
But why is it that in a work force with a million people who have gone to the time and effort of acquiring a full tertiary level education there are not enough people who have directed their education towards the skilled jobs that Haeco has on offer?
Part of the answer obviously lies in the fact that at Haeco you have to wear a maintenance uniform rather than suit and tie and you have to dirty your hands a little. But there are many bank jobs of far greater drudgery than anything to which Haeco puts its people.
I think in the end it just comes down to the money. I am not privy to the Haeco pay scale but the company faces a conundrum that will simply not go away. Either the pay goes way up and slowly the word goes out that Haeco is a good place to work or its labour shortage will get worse.
And if paying more means that Haeco is no longer competitive in the worldwide aircraft maintenance market, then so be it. Hong Kong's window of opportunity in this business will have been exploited fully during the few decades the window was open and now it is Pakistan's turn or Brazil's.
Haeco, in my view, is a bellwether for much that will change in the make-up of Hong Kong's economy over the next few years.
But while it would be sad to lose a company like this or see it dwindle, the same could be said of many garment companies that are now only names from the past.
If it must go, then let it go. This town will still move on.