3/1/2001
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Navistar 7.3L Diesel Labor Costing Study
By Doug Kaufman
The 7.3L IDI diesel engine originally produced by Navistar from 1989-’93 is an indirect injection type engine. This system used a hydraulic injection system in which fuel pressurized by the injection pump actuated the injector. The amount of fuel injected is dependent on the mechanical operation of the injector pump governor, which adjusts volume based on engine load or rpm.
Capable of producing 190 hp at 3,000 rpm and 388 ft.lbs. of torque at 1,400 rpm, the 7.3L engine was available in Ford F series Super Duty pickups and E series vans. This was the only engine used in Ford chassis ambulances and emergency vehicles, and according to a Navistar spokesperson, the 7.3L was and continues to be the best selling diesel engine in the over 8,500 GVW (gross vehicle weight) market.
Although the 7.3L IDI engine was replaced in 1994 by the Navistar 7.3L Powerstroke engine, the earlier model has continued to be a popular engine for recreational and business use. Shops across the country continue to report a steady demand for rebuilt 7.3L engines.
Of course, knowing that you can do the work and knowing that you’re making a proper profit margin on your labor are two different things. Being cost competitive requires more than just having the lowest price. Successful engine rebuilders know that, in the long run, you can’t compete just by matching your low priced biggest competitor on every labor job that you perform.
Your rates should be based on the experience of your personnel, your skill and experience with a particular engine, your equipment, warranty coverage, turnaround time, and many other bottom line items. That said, however, it can be helpful to know where your shop’s labor charges stand with relation to other shops in your region.
Our current labor costing study on rebuilding the 1989-’93 Navistar 7.3L diesel engine offers a look at national and regional average labor charges. The study covers various head, block and crankshaft service procedures, as well as miscellaneous labor charges. The list of 38 specific operations includes a basic valve job, cylinder head resurfacing, crack detection on connecting rods, cylinder sleeve installation, crankshaft straightening, engine disassembly, dyno testing, etc. An index of specific charges for labor jobs performed can be found on this chart.
At the beginning of this study, you’ll also find a chart representing the national average, median and mode labor charges for all 38 labor jobs covered in our survey. The "average" for a specific labor charge is the result of adding all of the charges for that service from all respondents and then dividing that number by the total number of respondents. The "median" is the result of ranking all of the survey responses from highest to lowest and then finding the number that falls exactly in the middle.
The "mode" is simply the most often reported number from all survey respondents.
Labor charges reported in this study were compiled through a survey mailed and faxed to 2,800 machine shop members of the Engine Rebuilders Association (AERA) in January. A total of 440 completed questionnaires were received for an effective return rate of 15.7%.
For the National Average, Median and Mode Labor Charges for Rebuilding the Navistar 7.3L Diesel Engine, the last column of the chart provides a "95% CI" range. These numbers reveal a confidence interval range, with a plus or minus maximum 3% error level. What this means in real terms is this: If you were to ask all of the machine shops in the country what their labor charges were for each particular operation, it is 95% certain that the "true" average labor cost would fall within this range.
As the chart shows, the regional breakdown is based on United States Census regions. The percentage of total respondents returning our survey from each region is as follows: New England (5 states) 4.26%; Middle Atlantic (3 states) 9.69%; South Atlantic (9 states) 13.24%; East North Central (5 states) 21.04%; East South Central (4 states) 4.26%; West North Central (7 states) 15.13%; West South Central (4 states) 9.45%; Mountain (8 states) 5.91%; and Pacific (4 states) 17.02%.
Some regional differences can be noted. Typically, lower labor rates were reported in the East South Central (Kentucky, Tennessee, Alabama and Mississippi) and West North Central (Minnesota, Iowa, Missouri, Kansas, Nebraska, South Dakota and North Dakota) regions; higher rates were evident in the New England (Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and Connecticut), Middle Atlantic (New York, New Jersey and Pennsylvania) and Pacific (California, Oregon, Washington and Hawaii) regions.
One could assume that higher labor costs mean more profit, because parts and equipment costs, in general, should be consistent across the country, but regional costs of doing business must be accounted for as well.
Click here for the specific labor charges on a national and regional basis are provided for rebuilding the 1989-’93 Navistar 7.3L IDI diesel engine.
We would like to thank Dave Hagen, Technical Director for the Engine Rebuilders Association, for his assistance in helping to compile the labor charge categories found in this study. This survey and its results were performed by Babcox research, the market research division of Babcox. Babcox Research specializes in custom research in all areas of the automotive aftermarket, offfering complete research capabilities, including questionnaire design, database creation, and report preparation. Surveys are conducted via mail, phone, fax, e-mail or the Internet.
With the broad coverage of Babcox publications, an in-depth knowledge of the $200 billion auto and light truck aftermarket, and access to the decision-makers that drive the aftermarket, Babcox Research is uniquely qualified to provide accurate research within the automotive aftermarket. Existing research includes: Automotive Rebuilder's Machine Shop Market Profile, the Automotive Jobber Industry Profile, Internet Usage Study, Technician's Tool Cabinet and Tool Survey, Automotive Lift Study, and Import, Tire and Underhood Industry Profile. For more information about this or other studies, or to have a custom study done for your company or industry, contract Bob Roberts at Babcox Research: broberts@babcox.com; 330-670-1234, ext. 252.
If you have suggestions for other engine costing studies, contact us at dwooldridge@automotiverebuilder.com or dkaufman@automotiverebuilder.com.