PROSPERITY is a double-edged sword for distributors trying to hire and retain employees to install truck equipment in the booming high-tech city of Austin, Texas. Once only a sleepy central Texas college town and the state Capital, Austin has become the Silicon Valley of the Southwest. But the same high-tech companies that help create a healthylocal economy compete with truck equipment dealers for employees. "You have mom-and-pop truck equipment shops trying to compete with very large companies almost the size of GM for employees," says Austin Sleeper, manager of Dealers Truck Equipment in Austin. "We can't offer the same benefits and insurance the big computer companies can." Dealers needs additional installation technicians, he says. The seven technicians on the payroll work 12-hour days six days a week on a flat-rate pay scale. Installation mechanics earn an average gross pay of $820 per week. "We can't keep good people, unless they have the opportunity to make good money," Sleeper says. And with a 13-week backlog, there's plenty of work for the mechanics in this flat-rate shop. With recent sales, Sleeper watched his backlog increase from 300 hours to 3,000 hours. Increasing Labor Rate In just two years, the labor rate for truck equipment technicians in Austin increased from $9 to $14 per hour, Sleeper says. The labor-rate hike was mostly because of an increase in the cost of living. Austin is one of the most popular areas to live in Texas. Coupled with the influx of new employees, rents are higher, and construction of new apartment complexes is often underway. Growth in new construction extends 75 miles from Austin to San Antonio in an area referred to as the next Dallas-Fort Worth, Sleeper says. New construction requires trucks, whether it's dump trucks for widening roads, platforms for hauling construction materials, or service trucks used by building contractors. The recent growth in truck equipment sales in Austin is unprecedented according to Sleeper and Red Handly, one of his salesmen. Sleeper has 20 years of experience in truck equipment, and Handly has sold truck equipment since 1956. "Our sales growth in the last three months for truck equipment has been astounding," Sleeper says. "It's because of an increasing population and new construction." Austin is home to some of the largest personal computer and microprocessor manufacturers in the United States. Companies such as Dell Computer and Advanced Micro Devices (AMD), whose microprocessor competes directly with Intel's Pentium processor, are driving the city's economic growth. Competition for Employees AMD is located just down the street from Dealer's, which has felt the effects -- both positive and negative. Dell Computer Corporation, one of the largest PC manufacturers in the United States, is located in Austin. The company recently hired one of Dealers installation technicians to assemble PCs for $16 per hour. "People aren't going to assemble dump trucks when they can assemble PCs and make twice as much money," Sleeper says. Another reason for Dealers surge in sales growth is because of the annual introduction of new truck models, he says. Combined with new construction in Austin this creates an even greater demand than in previous years. Ford's new higher GVW F-450 and F-550 with regular and crew cabs are very popular. The GVWs of the chassis are higher than for a light-duty truck but less than a medium-duty chassis. "Truck dealers are selling two-ton trucks to haul one-ton loads instead of selling customers one-ton trucks that are driven until the vehicles fall apart," Sleeper says. In June 1998, Hendrix Trucks & Equipment in Austin was purchased by Kim Kayser, owner of Dealers Truck Equipment, which has corporate offices in Shreveport, Louisiana. Other branches are located in Baton Rouge, Louisiana; Longview, Texas; North Little Rock, Arkansas; and another division is located in Fayetteville, North Carolina. In March 1999, Sleeper became manager of Dealers Austin branch. He was promoted from production manager and previously operated the equipment division for Hendrix. Flat-Rate Labor One of the first changes Sleeper made was to convert the shop to a flat-rate system. Since then, he has worked on converting the remainder of Dealers shops to a flat-rate pay scale. Other changes by Dealers transformed Hendrix from a small installation shop owned by the GMC truck dealer to a full-line truck equipment distributor. Among the truck bodies now carried by Dealers are Knapheide service bodies, Dutec crane bodies, platform bodies from Knapheide and Texoma, and Warren dump bodies, which have strong sales in the local market. Dealers mounts two to three dump bodies a month. Hendrix and subsequently Dealers are well known for building lumber bodies, which are used to deliver loads of lumber and roof trusses. The steel platform bodies are mounted with a hoist typically on a medium-duty chassis. The platform bodies have a heavy-duty bulkhead and a 5 1/2-inch pipe bumper. Another truck body manufacturer now builds the lumber bodies. But Dealers' Austin branch still mounts up to 50 lumber bodies a year on medium-duty chassis. Besides the truck bodies used in the construction industry, many others are purchased by the City of Austin and the State of Texas. Many of these are service bodies and dumping platform bodies built by Knapheide. Altogether, Dealers Austin location sells about 150 service bodies a year. Chassis Pool Sales The distributor has bailment pools for Ford, GMC, and Chevrolet truck chassis. Many of the truck bodies are mounted on medium-duty chassis, which was a Hendrix customer base before being purchased by Dealers. About 50% of Dealers business is sales of chassis from bailment pools and the truck bodies and equipment mounted on the chassis, Sleeper says. The distributor currently has 250 chassis on its lot with 300 more scheduled for delivery in the next six weeks. Beside the truck bodies installed on the chassis, Dealers adds many bolt-on items. One of the most popular is a bumper replacement package from RioGrand Truck Accessories in San Antonio, Texas. The RioGrand bumpers are made of six-inch pipe in the front and rear. The front bumper has a tubular steel grill guard with expanded metal grating and a skid plate to protect the transmission oil cooler. The standard rear bumper has a skirt and receiver hitch. Both black-pipe bumpers give the truck a rugged, off-road appearance that is popular in Austin, San Antonio, and the Hill Country region of Central Texas. Black-Pipe Bumpers Trucks with the bumper replacement packages are so popular that vehicles sell shortly after arrival at a truck dealer's lot, he says. On a recent day, Dealers had 17 trucks in its shop for installation of RioGrand bumper replacement packages and orders for 450 more packages. "One mechanic can install seven or eight bumper packages a day," Sleeper says. "The RioGrand bumper packages have a great profit and have a good turn ratio in the shop." Other truck equipment and accessories installed by Dealers include AutoCrane, Fassi, and Liftmoore cranes mounted on service bodies. The distributor has 4,500 square feet of office space and a showroom for retail parts sales and toolbox displays. Dealers carries toolboxes manufactured by Weatherguard, Knapheide, Delta, Rawson Koenig, Dutec, and Stahl. Major truck body lines carried by Dealers are dump bodies from Cadet, Crysteel, Warren, and Rugby. Tailgate lifts from Tommy Gate, Thieman, Maxon, and Waltco are sold and installed by the distributor in its 6,000-sq-ft shop. Dealers estimates it will have gross sales of $4 million during its first 12 months in Austin. The sales goal set by Kim Kayser for Dealers' Austin location is $500,000 per month. "With our production backlog, it's a realistic goal for the next 12 months," Sleeper says. "But we need to hire additional help in the shop."