Huge Auction Marks Decline of Aerospace : Business: Buyers from across the country come to San Diego for sale of used Convair machinery. The state has become a hot market for such events.
Randy Stevens of Farmington, Mich., has made six trips to California in the past year.
But he’s not a tourist, he’s not selling anything, and he doesn’t have relatives in the Golden State.
Stevens is part of the family-owned Lee Stevens’ Machinery Co., a machinery wholesaler. When big manufacturing companies hit the shoals and are forced to sell their used machinery, Stevens is ready to buy.
This week he is in San Diego for one of the biggest aerospace auctions ever seen: the six-day auction of 12,000 lots of machinery and related items at the Convair division of General Dynamics.
When it comes to auctions of manufacturing equipment, California is where the action is. The dismantling of the state’s once-mammoth aerospace industry has spawned a hot market in the selling and buying of machinery.
For most of the years after World War II, it was common for machinery buyers to attend going-out-of-business auctions in the Midwest and East to search for machinery to sell to plants in fast-growing California. Now the tables are turned.
Buyers are looking for good deals on milling and turning machines, grinders, routers, drillers, borers, lathes, shears, brakes, fabricators, arc welders and a long list of other kinds of machinery.
“I’m getting to know California very well,” Stevens said. “I don’t think I’d like to live here--too crowded--but it’s great if you’re buying machinery. It’s beautiful equipment, well-conditioned and at good prices.”
Some of the Convair machinery, such as a nifty Mattison 42-inch-by-144-inch hydraulic feed reciprocating surface grinder, is virtually new.
Some of the large drill presses date to World War II and were used to build the B-24 Liberator, the long-range bomber that was used in Europe and the South Pacific. Some of the smaller presses were brought to San Diego from Buffalo in 1935 when Reuben H. Fleet relocated his Consolidated Aircraft Co., later to become Consolidated Vultee and then Convair.
Hundreds of buyers from 40 states and several foreign countries are in attendance as everything but the American flag at the 2.5-million-square-foot Convair plant is up for sale. Many of the buyers know each other from auctions at Lockheed, McDonnell-Douglas, General Electric-Aerospace and other companies.
By early next year, the Convair plant that once employed 40,000 workers will be razed and the property on Pacific Coast Highway next to Lindbergh Field will be returned to the landlord: the San Diego Unified Port District.
The Convair auction is being conducted by Norman Levy Associates of Southfield, Mich., and that too is part of a new trend. Levy is the world’s largest industrial auction, appraisal and liquidation firm.
Name an industry that has down-scaled or restructured, and chances are Norman Levy Associates has been there. Norman Levy clients have included Caterpillar, Chrysler, Eastern Airlines and AT&T.;
Earlier this year, the 44-year-old firm opened an office in Alameda in Northern California, its first west of the Mississippi.
The goal is to enhance the firm’s chances of continuing to get the lion’s share of the aerospace and Silicon Valley auctions at which the electronics industry is shedding equipment made obsolete by new technology and products.
Robert Levy, 37, the firm’s president and the son of the late founder, knows that for every big aerospace auction, there are stories of job loss and pain. On the first day of the Convair auction, dozens of retired and laid-off Convair employees sadly watched the sale of machinery they had spent their work lives using and tending.
“This is the saddest day of my life,” one retiree said.
Still, Levy prefers to see an auction as proof of the dynamism of the capitalist system. Someone needs to sell, someone wants to buy. The world’s richest economy moves on.
The aerospace industry has withered, but the automobile industry is booming. California is declining as a big manufacturing state, but the South is growing.
“We’re selling equipment to get it back into use,” Levy said. “Someone will buy this equipment and be able to create jobs, have increased productivity or new product capability. It’s all part of a free market system.”
Roy Gilmour, the Convair manager overseeing the auction, agrees with the life-goes-on philosophy.
“I’ve done my crying for Convair,” said Gilmour, an employee at the plant for 36 years. “Now I want to see this stuff recycled to someone who can use it.”
Much of the machinery will be resold by wholesalers to small machine shops, the kind of shops that would leap at a good price on a Leblond Makino Regal Servo Shift 15-by-30 Quick Change Geared Head Lathe, which is used to cut threads in metal.
The decline of California aerospace has also created a boomlet for companies that specialize in the rigging and moving of heavy industrial machinery across town or across country. Many of their reps are at the Convair auction trolling for business.
“Business is great, as long as things are leaving California,” said Dennis R. O’Hara, general field superintendent at Mammoet Western of South El Monte. “In a couple of years, who knows? But right now, we’re busy.”
“California is hot right now for our business,” said Rick Bollinger, Fontana-based representative for the Georgia-based TRISM Co. of Ft. Worth.
It would be wrong to think of the Convair auction as a fire sale. This is what is called a “reserved” auction where, under California law, the auctioneer has the right to refuse to sell any piece of equipment when he considers the bids too low.
In the world of auctioneering, Norman Levy enjoys a reputation for fairness, for demanding good prices for clients but not holding out for exorbitant ones. “If you come to a Levy auction, you know it’s a straight deal,” Stevens said.
Bob Norris, a former television newsman who lives in Yorba Linda and consults for companies looking for quality-control machinery, is at the Convair auction on behalf of A. A. Jansson Inc., machinery dealers in Livonia, Mich. At other auctions, he has bid on behalf of companies from Singapore, Taiwan and Japan.
Buying at auction is a competitive enterprise, and Norris knows his competitors. He’s been seeing them regularly for several years and he notes that their bids are getting higher, a sign that the demand for machinery is rising.
Even after the Convair auction closes Saturday, it won’t be long before the traveling company of buyers reconvenes.
“Most of them will be at the Northrop auction” on Dec. 19 in Hawthorne, Norris said.